August 6. A light at the end of the tunnel?

There is a glimmer of light at the end of the tunnel ?

We are at last starting to see some good properties come onto the market. Only a few, but at least there is something to contemplate. Big news this week was the sale of Stonnington Mansion to Rob Menzies for $18 million. Yes, it?s Malvern and not Toorak and it is on a main road and needs millions thrown at it; but what is not so obvious is the amount of land involved and the planning conditions. This clearly is a commercial venture, not just a home.

The real rise in the Toorak market will be tested with the resale of 2 Hopetoun Road (tennis court, pool, good modern home). The property was auctioned 18 months ago and brought $6.6 million with competition from 6 bidders. This time expectations are $9-10 million. This will be the litmus test as to where the market has actually gone rather than generalisations made in percentage terms.

What we did notice over the last week is the fact that some vendors are starting to take a punt on selling their properties – or are becoming just plain greedy – prompted by reading a storm of media releases. Only a few are now looking to sell before auction, despite the fact there is a very good offer on the table which might not be there come auction day. It?s a hard argument to win in the face of clearance rates in excess of 80%. When more properties come onto the market buyers will have more choice and sellers more worried about missing the buyer who got away.

Camberwell, Brighton and Kew all had sales over $2 million with multiple bidders. The highlight was 47 The Broadway, Camberwell ? a period home on 640 square metres which sold for an incredible $3,220,000 (Toorak prices).

Toorak, South Yarra, Malvern and Hawthorn again had nothing prominent on offer. This will be tested on the 18th of the month when several substantial properties will come to auction.

We saw some small signs of sanity at a couple of auctions where reserves were not reached even though there was strong bidding from multiple bidders. A clear indication that the properties were priced ahead of the market.

It?s still our belief that patience will be rewarded, however we feel the competition to secure the premium properties will continue and will not be concerned one iota with the equity market fluctuations.

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