We’d love to say that the market has changed a gear and has entered a predictable new normal, but…
We’ve seen bubbles before and the operative word is Pop (or, a few years ago when the banks got real: pffffft).
What we’re seeing now is not agent hype or media gullibility. Prices really have jumped 5-10% in just a couple of weeks. If that keeps up, by June’s end we’ll all be living in the $30m houses one agency says they have buyers for (really? a queue of people wanting to pay more than has ever been paid in Melbourne?).
A block of land we bought pre-Christmas for $5m has just gone again for $5.4. Other clients are being offered outrageous sums for homes we bought for them just last year.
What does a bubble look like? Consider Claremont Avenue, Malvern It’s a Victorian desperately in need of a total renovation and it went up for auction on Saturday with a reserve of $2m. And it went for … $2.51.
Really. $2.51. Why?
We’ve seen arms a’waving frantic at auctions — attached to people who only saw the place the night before. Due diligence, anyone?
Our view? These kinds of rises are not sustainable. They have to level off soon.
Private? For whom?
Then there’s the rise of the “private” auction — a particularly unpleasant development you wouldn’t see in a market that had not gone a little mad. To take your place at the table you must first make a bid which the selling agent deems to be acceptable — so your cards are on that table before you have any idea about who or what you are up against.
It’s then that the under-the-table antics can get started, well out of the sight of the ACCC and Consumer Affairs Victoria (who?).
You can find yourself trading blows with … a fly on the wall? a bird out the window? an anonymous phone bidder?
Or you could be bidding against yourself.
Yes, there are rules. They’re the ones the agents make. And break.
Is it Asia?
There’s certainly an impact. One possible explanation we heard last week was that the current upturn is at least in part being driven by refugees. Refugees, that is, from pollution, from unbreathable air.
Have we become the healthy choice?
A pre-election glimmer of hope from NSW: an agent pinged for under-quoting.
Hello, CAV. Is there anybody home?