Up here at the top end, interest rate rises or falls typically have only muted effect. Over the weekend, that effect was not only muted, it wasn’t heard at all; drowned in a deafening chorus of bidding. Anything AAA had four or five bidders prepared to pay premiums for the keys to the door.
Given that this market has only weeks to run before entering a hiatus which will last ’til March, some anxiety was to be expected. Apparently outrageous prices paid now may look like value then.
When supply is limited and quality is as rare as chooks’ dentures, even lemons can fly. (Mangled metaphores? We can do those.)
We can also take you to see five or six houses priced at $15 million and over … which are worth every cent of $10 million. They have vendors happy to do nothing but wait for those people Mr Barnum may have suggested were born every minute. Punters in town for the horses who may pick up a property in an idle moment?
That’s a hope which may be misplaced; we’re sensing dismay among some of our overseas clients: they’re not affected by interest rates – what’s concerning them is exchange rates.
All this is despite the large number of houses listed for sale. It’s the quality, people, the quality. There’s just not enough of it around.
Only Melbourne? No longer. Following the precedent of swine flu, the virus has now spread to SYD. Look, for example, at a single-fronted house in Bondi. Eleven (!) bidders took it to 20% above reserve. A quick scoot over to Double Bay found five people prepared to pay 10% over.
2007, anyone?
And then there’s a paradox: in the sub-$1 million market there are people praying for interest rate rises to bring prices down somewhere closer to the stratosphere.
Last week? Notable amid the heady aroma of lemons was the persistence award won by Kay & Burton: after an 8-month campaign, Gordon Grove, South Yarra (advertised at around $6 million) sold at last. $5.3 million. Commission hard-earned.
How fast has this market moved? You could look no further than 2 Beaver Street, Malvern. A Year ago, it sold for just over $2 million. Last weekend it was quoted at $2.1 million and two bidders pushed it to $2,420,000. Has the market really risen 20% in 12 months? We don’t think so. Ouch.
9 Millicent Avenue, Toorak, a double-fronted Victorian which lacks good bedroom accommodation sold before auction for $4,250,000, which is a healthy price for a 3-bedroom house.
In the Cinderella belt, 51 McGregor Street, Albert Park did not lack invitations to the ball: three bidders took it to $2,227,000.
All the auctions we attended had solid bidding and only one passed in. While there are still more people ready to raise their hands than there are properties available, this looks like a market which still has a way to run. If that continues to the huge weekend of October 24/25, you’ll be seeing estate agents’ whitened teeth all agrin ’til Christmas.
Shudder.
David Morrell
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Bayside: Brighton. And more Brighton.
Most of the week?s action in Bayside centred on … Brighton. Over 20 sales were made.
While auction numbers are building towards the mega weekend of October 24/25, it was the strong number of private sales that bolstered the numbers – particularly apartment sales.
Long regarded as an area largely devoid of apartment developments, the landscape in Brighton is undergoing a quiet change as buyers slowly embrace the notion of stacked living.
Of the 13 sales recorded in Brighton proper, more than half were new or as-new apartments; ranging in price from $600,000 for 4/10 Warleigh Grove to $2,240,000 for 1/11 Well Street in the new Avignon development.
Nearer to Bay Street, a yet to be built apartment development at 30 Willansby Avenue has, since the end of August, recorded nine sales off the plan; all at prices at or over $10,000/sq m. The latest sale this week was for apartment 8. Even at a modest 129 sq m, it still sold for $1,300,000 – around $10,000/sq m. It?s smaller cousin, apartment 22, an even more modest 77 sq m, sold for $840,000 or $11,000/sq m.
The sale during the week of 15 Well Street for $3.7 million will see more apartment construction activity in the Church Street precinct. As reported last week, this vacant site has plans and permits for another 10 apartments in what is becoming a somewhat crowded part of Well Street.
17 Albert Street, Brighton sold 18 months ago for a price in the vicinity of $4.3 million, just before the meltdown occasioned by the GFC. Just how far the market has recovered was illustrated at its auction on Saturday: two bidders gently took the price back up to exactly $4.3 million before it was passed in. Discussions continue.
4 Orchard Street was listed for auction last weekend, but a Godfather offer of $2.95 million was made during the week and a sold sticker appeared on the board. Agent and vendor no doubt both pleased and relieved.
East Brighton had strong results across the board.
The standout was 29 Glencairn Avenue, an 8 room brick veneer on 716 sq m land which sold for $1.95 million, just pipping 2 Canberra Grove for top honours; it sold for $1.83 million.
5 Curley Street changed hands for $1.18 million, 18 Lubrano Street, on the other side of the highway, reached a respectable $1.3 million.
19 Ward Street attracted a prior offer of $1.25 million. Contracts were exchanged on the spot.
10 Milliara Grove is still looking for a new owner. With all the right accommodation and overlooking a park, with a reserve $1.4 million, someone will surely fall in love with it.
Elsewhere in Bayside, 70 Holyrood Street, Hampton, a weatherboard house requiring the works, on 800 sq m, sold for $1,510,000. Nearby, 13 Avelin Street, on much smaller land but done up to the nines, passed in at $1.45 million. An offer of another $20,000 was not enough to entice the vendor and it is back on the market; asking $1.55 million.
As ever, Bentleigh buzzed and recorded another (yawn) 100% clearance: 9 from 9. This high turnover suburb is suffering Spring stock shortage; demand unaffecetd by the interest rate increase.
Until next week …
Damian Taylor
M&K in the news:
Lemons Struggle, but the rest ignore the rate rise. The Australian Financial Review (subscription required) … buyer’s agent David Morrell noticed no difference. ?Not even a blip on the radar.?
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