Aug 17: Is a bubble, is not a bubble, is a bubble …

The stock market has got up off its knees and is bolting Usainly. Melbourne house prices are taking off after them.

Which raises an ugly question: are we bubbling again? Are we heading toward another almighty pop?

Look at the fundamentals (does anyone still pay any attention to incomes, jobs, profits?) and there seems no reason to be breaking out the champagne, yet we’re near drowning in oceans of the stuff.

This lifetime sailor has learned the wet way to keep an eye on the weather. Same with the markets.

In the meantime …


There’s precious little. At the top end stock levels are as low as we have seen in more than 25 years.


Over the past two weeks AAA-area (and not only 3141 to 3142) properties have been changing hands almost every day for more than $5 million. You haven’t read about it? Most have been off-market.


Those who foretold falls of 30% and more have fallen silent.


They’re still not making enough of it.

  • 44 Berkeley Street, Hawthorn sold off-market for $5,950,000. That’s nearly $280 per foot for a large (21,400 sq ft) block. Prior to this we would have expected more like $250/260.
  • 19 and 21 Vista Grove, Toorak sold at auction for close to $6 million for 13,500 sq ft. That’s C-grade Toorak at over $450 a foot; which is starting to seem like real money. (In fact it’s becoming hard to find any land in Toorak that starts with a 3.)
  • 35 Avoca Street, South Yarra had a house on it which didn?t add any value and sold for land-value: $5.3 million. No surprise. It sold only a year ago for $5,060,000


Houses with everything done and ready to move into. Still in demand:

  • 20 Viva Street, Glen Iris sold for $2,344,000. A weatherboard with the lot; although most people believed its price wouldn’t start with a 2.
  • 26 Lambeth Avenue, Armadale A double-fronted Edwardian brick with a couple of issues; it sold for over $2.5 million after being passed in. About right.

Stubbed toes.

Even in the face of 80%+ “clearance” (see last week for a little more on that) rates, houses are still being passed in.

  • 53 Hunter Street, Malvern A double-fronted weatherboard close to Malvern Primary (normally a huge driver) was passed in at $1,910,000.

Health report.

The pulse may be faltering. We’re not seeing as many bidders as we saw four weeks ago. In part that’s explained by the lack of to-die-for choice that’s available, but it’s also unrealistic to expect Melbourne to continue to soar when almost nowhere else can even rise to the mark.

There you go. This is Melbourne. Maybe football can explain our market.

David Morrell.

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Bayside: some bubbles runneth over

That distant popping you can hear is the sound of corks being launched at 9 Heathfield Road, Brighton East. A very large near-new weatherboard period style home with a basement garage. It sold prior to auction last February for $2.3 million and again over the weekend for just $530,000 more. That’s a 23% hike in six months.

Contrast that with 18 Walstab Street: the same agent had to place a vendor bid of $2.55 million and a later offer of $2.6 million was rejected. The vendor’s reserve is $2.79 million.

Still in Brighton East, 83 Baird Street, a brick veneer home of 8 main rooms on 680 sq m, sold for $1,680,000.

Brighton Proper had a quieter day following the big result achieved the week before at 2 Cole Street (and that’s a story which is not yet over).

91 South Road – at $1,240,000 – was the highest Saturday could manage.

Meanwhile, in Edgar Street, a puzzle is being set:

  • 6 Edgar Street sold at auction last weekend for $1,355,000 and that bought a 4-bedroom, 2-bathroom single level home with a pool.
  • 4 Edgar Street next door, same land size but with a pushover old weatherboard, sold for almost $200,000 more at $1,540,000.
  • On the other side of the street a contemporary attached townhouse on half the land sold privately for $1,510,000, making number 6 look relatively cheap; no small feat in this market.

Beaumaris and Black Rock had quieter days; no auctions but 20 Reserve Road, Beaumaris sold privately for $1,225,000 and 10 McKay Avenue, Black Rock for $1,250,000.

Hampton was also quiet: only five on offer. 38 Ludstone Street sold for $1,197,000 and 5 Nicol Street sold prior to auction for $1,024,000.

Elwood had mixed results: four passed in, six sold on the day and two sold before. While auctions still dominate in Elwood, there were also two private sales:

8 Dryden Street was passed in at $860,000. A later offer of $900,000 was insufficient and a probably optimistic reserve has been set at $1,065,000.

More work is also required at 2/19-21 Ormond Esplanade (sorry, no link). The highest bid was the vendor’s: $1,200,000 and from there it’s daylight to the reserve of $1,500,000. Good luck.

And a little praise is due …

It seems our pleas for greater accuracy in the price estimates of sellers’ agents is gaining traction.

Several major real estate firms in Melbourne have made serious efforts to tighten up the way they quote expected prices to buyers; and that’s a welcome change.

But, as always, there are still the clever kids who are trying to get away with blaming the messenger: “… the grandstanding and self promoting buyers’ advocates”.

Goodness gracious! Could they mean us?

Their reasoning is as flawed as their ethics: if there was no problem, why would we be raising it? And who do they think is on the other side of every transaction: it’s the buyers, people, the buyers who are expressing their frustration and anger at the time and expense you’re causing them to waste, those buyers who are keeping you in business.

If you have something to say, we’d welcome (and publish) your comments.

Damian Taylor

Something to say? Your comments are welcome. Click on ?Comments? below.

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