The world real estate market is dying a death. From LA to Leningrad (with stopovers in Ireland, UK, Europe – and Asia if you’re going the long way) there’s little to be heard but wailings and gnashings of teeth. Forced sales and more up-facing bellies than can be found on the beaches of San Tropez.
Yet here the Sat sport of auctions is still a sell-out. Over the last couple of weeks it’s been standing room only: crowds of 80-200 and forests of hands held up for the right properties.
Then why are the real estate agents being found sobbing in the corners?
Nothing to sell. Or very little.
An eastern suburbs stalwart, director of a large agency, tears pouring down his face told us that last year they had over 100 properties to sell in March. This year? An almost inaudible 27. Sob.
And most agencies are in the same boat.
But, encouragingly, some reality is creeping in. Sales are being made more often within the quoted range (gosh! It’s been possible all along!) and vendors’ price expectations have fallen back toward the real.
The weekend’s sporting highlights?
35 Mary Street, Hawthorn sold for $2,200,000 with two advocates, a next door neighbour and an agent fighting it out.
30 Bonview Road, Malvern sold with three bidders at $1.36 million.
An Art Deco apartment at 109 Nimmo Street, Middle Park, quoted at $450,000 plus, on the market at $515,000 and sold for $635,000
Four bidders went head-to-head in a mortgagee sale at 29 St Edmonds Road, Prahran with the property eventually being bought at $1,662,500.
There’s certain (reasonable) buyer anxiety that with so little on offer, anything is better than nothing. It’s something we try to persuade clients not to act on. Repenting at real estate leisure is an exquisitely painful form of repent.
And there’s quite a lot happening behind closed doors; and certainly more to this market than meets the eye.
Our bet is that after this flurry of activity, the market will go back to the grind with a lot more wheeling and dealing and trading going on behind the scenes, with prices still subdued, agents keen to do deals and vendors, at long last, meeting the market.
CK
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Bayside: Are we right or are we right?
You may recall that last week we said:
[pullquote]Yet buyers are returning in the upper ranges. They’re poised with cheque books at the ready. So what’s stopping them? Three things: Quality, Choice and Value.[/pullquote]
Lordy, we’re good. The weekend brought examples of all three and Brighton duly recorded its busiest week in living memory (well, months, but it seems like lifetimes) in both auctions and private sales.
Better choices, decent properties and sellers who were ready to meet the market. Bingo.
The standout was “Blair Athol” at 5 Leslie Grove, Brighton Beach. An estate of over 3,000 sq m with pool and tennis court, it’s a two-storey Victorian which marries the best of many eras. Marketed over six months with expressions of interest invited at around $10 million, it has finally sold to a local buyer for a price believed to be around $8 million.
24 Sussex Street, Brighton, sold after a short private sale campaign which anticipated $3-3.5 million. On 971 sq m, the 20 year old single-level residence with an indoor pool sold for $3.15 million and is now destined for a major renovation.
8 Young Street has finally resold for $1.8 million. A 20 year old reproduction Edwardian on 850 sq m, it sold early last year for $2.3 million. Its price “correction” precisely mirrors the official fall in Brighton prices of 21.7% over the past 12 months.
At least some auctioneers were smiling after seeing some real bidding activity for once and no more so than at 17 Shasta Avenue, Brighton East. Always a popular street, the single level solid brick four bedroom home has good bones and a northerly rear facing allotment of 820 sq m. Seeing at least five bidders having a red hot go was reminiscent of the heady days of 2007, with increments ranging from $100 to $5,000 before an exhausted auctioneer finally dropped the hammer at $1,476,000.
Another strong result was the sale before auction of a new timber period-style home with a basement garage at 9 Heathfield Road, Brighton East. Complete with a pool, the well designed and finished home was snapped up for $2.3 million; the highest price paid in the area for 12 months.
35 Drake Street, Brighton, sold post-auction to the highest bidder for $2,075,000 (less than a price offered at a private sale last year – reality bites). It’s a good house: four bedrooms, well renovated, a large block and handy to the Head Street park.
A contemporary two-storey home at 35 Hanby Street, Brighton sold for $2.1 million. It last changed hands in August 2006 for $2,080,000 at an auction in which the current purchaser was the underbidder. Good things come to those who wait?
Hampton had an outbreak of grinners: 100% sold.
60 Service Street, a typical “Cal Bung” on modest land sold for $1,225,000.
73 Thomas Street, a brand new spec home sold at a builders realisation auction for $1,595,000.
But all is not sweetness and light. The Beaumaris top end remains parked.
422 Balcombe Road couldn’t raise even a vendor bid. Its reserve is $1,525,000.
An enthused auctioneer bid $1,350,000 at 426A Beach Road before passing the property in with a reserve of $1,550,000. The drawing board beckons.
The lower-to-mid spectrum of the Bayside market continues to tick over: most property in the $500,000 to $800,000 range attracted multiple bidders and buyers.
Bentleigh, Ormond and McKinnon are performing well. Lower interest rates, the first home buyer grant and investors are all driving demand, but anything over $1 million is harder work; as evidenced by the result at 24 Paschal Street, Bentleigh. Passed in at $990,000 (presumably genuine), a later offer of a whopping $1,240,000 was apparently rejected with the vendor wanting $1,350,000. Wish them luck.
The Labour Day long weekend means auction offerings will slow to a trickle. The focus will shift to private sales.
The lesson of the week?
If potential sellers have quality properties which are priced to reflect current values, they shouldn’t hold back: the buyers will come.
We know that. We talk to them every day.
DT
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