The day the market stood still. It was buyers’ advocate Nirvana!
It was arguably the worst Saturday for auction clearances at the top end since the late 80s. The spring market failed its litmus test. Dismally.
Yes, many did sell afterwards; some near vendor?s expectations, others well short, but the clearest (and unreported) message of the day was the faltering of the auction system itself. They got the crowds, they got the buyers, but virtually all of those buyers’ hands remained firmly cemented to their pockets.
Many of the crowds were huge – 250 people and up (so it wasn’t just the friends and neighbours). It felt like a gathering of the throng ? would-be buyers and would-be sellers ? looking for some direction. Trying to decide whether this was a market they should be in.
The stark message for vendors? If you don’t have to sell, don’t.
For buyers? With extraordinary times come extraordinary opportunities; but livability should still be your deciding factor. If you’re not buying for the long term (and living long-term with that decision) you may find yourself selling into an unstable market.
Are there signs of distress selling? Yes. 12 Huntingfield Road, Toorak. While it wasn’t advertised as a mortgagee auction, the vendor was the mortgagor. Here, in one of Toorak’s better streets, there wasn’t even a cheeky bid to be had. It sold on Saturday night for the reserve of $4.1 million (a mortgagee auction with a reserve? ? don’t we live in interesting times?). And there were, inevitably, some interested parties who blamed the agent for selling without referring back to them. May we suggest that there are some who have a little to learn about negotiation.
More cause for vendor alarm?
? 3a Irving Road, Toorak no bids.
? 17 Dunraven Avenue, Toorak no bids
? 31 Grandview Grove, Prahran no bids
? 1 Fairlie Court, South Yarra no bids
? 14 Horsburgh Grove, Armadale no bids
? 85 St Vincent Place, Albert Park no bids
All done, all finished, all silent, all despair.
And then …
Three bidders! 28 Thanet Street, Malvern was passed in at $2.6 million with a reserve of $3 million. The vendors may still be dreaming of last year’s prices, but at least they have bids to consider.
Sold! 29 Rose Street Armadale passed in at $2.2 million and sold later for over $2.5 million. The buyer prepared to go $300,000 over the next bid is an almost extinct species. This one is museum quality.
Watching the few that did sell was like watching dentists at work. This was pulling teeth stuff. Some auctioneers ready and able to work to earn their fees, others demonstrating that their true calling is in some other field. Any other field.
Saturday’s bright spot …
18 Dunraven Avenue, Toorak Land which sold for $2.515 million against a $2.2 million reserve with three developers competing. Developers … develop. If they’re not doing that, what can they do? Even then, these three must believe the tide will turn by the time they’re ready to come to market. It’s an expensive punt if they haven’t got it right.
Where to from here?
This is, perhaps, the first sign of the auction system going through its death throes. It only works if you have bidders. Faced with the tens of thousands of dollars it costs to take top end properties to auction, we believe there will be a lot more private sales between now and Christmas.
For buyers, there will be some wonderful opportunities over the next month or two. Forced sales are becoming a factor; and that will affect the whole market. That said, if it is a triple-A property you will have competition.
And, forgive the repetition, but if you are buying, you have to like the home, not just the price. If it doesn?t work as a home, regardless of how much of a bargain it appears to be, wait for the right one to come up. If you don’t, it will almost certainly come back to bite you. Not only will you not enjoy where you are living, there’s a more than even chance that your exit strategy will be compromised in years to come.
Brighton. Bewitched, bothered and bruised.
One can almost feel sorry for Brighton’s once proud coterie of alpha auctioneers as they struggled to extract real bids from an increasingly reluctant market on the weekend.
On the back of a major lift in the number of offerings, there were few takers in sight; the clearance rate in Brighton and Brighton East plunged to a navel gazing 20%. Brighton East was particularly savaged with a solitary sale from a total of thirteen offered. The absence of an auction sale in excess of $1 million anywhere in Brighton is significant in a suburb that boasts a median price in the vicinity of $1.7 million.
It is obvious to buyers that a number of properties are still being quoted at overly optimistic levels. Reports abound of sellers refusing solid offers before auction only to be greeted by an ominous silence on the day.
So much wailing and gnashing of teeth by sellers, hyperventilation by agents anxious about when their next sale will be while buyers are biding their time ready to move in at the first sign that the rot has stopped.
The release of the September quarter sales data and median prices is much anticipated; although it will merely confirm what we already know. Extrapolating those figures through the current quarter will only help potential buyers sleep better at night, knowing their patience is about to be rewarded.
It is satisfying to know that Top End Trends has a broad reader base and it seems the local agents are also clicking on.
How do we know?
Because of the number of phone calls and comments made to us by sellers’ agents bemoaning our “negativity” and “talking the market down”.
While it is flattering that agents believe we have such influence, in reality we do not make the market but have attempted to interpret the changes over the course of 2008 and to offer an alternative and more realistic view than that often put by agents representing sellers.
In fairness, we do applaud a sale result of note in the current market but in reality those results are few and far between.
A staggering 17 properties offered, with a very modest 5 sales.
26 Deauville Street a brand new and well fitted and designed five bedroom family home was quoted at $1.58-1.73 million. Although the agent was coy about the exact sale price, we believe it was in the lower end of the range. That’s below replacement cost and good buying. A gem, but only the buyer is grinning.
In neighbouring Black Rock, one of the largest allotments in the area (3364 sq m) at 10 Iluka Street close to Royal Melbourne Golf Course, was passed in on a vendor bid at $2.75 million with a reserve of $3.15 million.
Hampton and Sandringham fared better with more than half finding new owners.
Typically, Bentleigh and Bentleigh East continued to achieve solid results: 15 sales from 23 on offer. The highest result was 98 Brewer Road at $982,000.
11 Cushing Avenue was not so fortunate: $1,125,000 refused against a reserve of $1.25 million.
Next weekend is for the punters with the Flemington Spring Carnival relegating auctions to a distant second.
It’s fortunate timing: it gives sellers’ agents a chance to clear Black Saturday’s passed-in properties and buyers an opportunity to cherry pick a market that is theirs for the taking.