Dec 15: And goodbye to all that …

The real estate industry has now turned out the lights and toddled off to bed; hoping and praying that the last six months were just a nightmare. Faint hope. Reality still looms like a wolf at the door.

What are we hearing?

“The banks have their feet on the throats of hundreds of clients whose affairs are out of order; if they’re not cleaned up, their houses will be on the market in the new year.”

And a happy Christmas to you, too.

But even if only half true, amid job losses, diminished bonuses, margin calls and profit downgrades, things look like being more than a mite interesting in the new year. There could well be new blood on the wall-to-wall come February and March.

In the meantime, expect not a lot in the holiday house market over the next six weeks. If you are a forced vendor, ’tis not the season to be jolly.

But vendor’s famine can be buyer’s feast; and there are those who are poised to take advantage of the new reality.

And there are also those who are not feeling any stress at all. In AAA land, more than you may suspect have no mortgages hanging over them.

So … what influences can you expect to come into play heading into the new year?

  • Those who are not over-exposed or over-committed will help moderate the market by doing … nothing.
  • There are still buyers who are actively or passively looking at the top end.
  • There’s a wave of returning cashed-up ex-pats looking for quality housing and excellent schools.
  • Exceptional AAA properties will always find buyers.
  • Job losses and financial stress will continue to depress the top end.
  • Lack-of-confidence is catching; and there’s a lot of it around.

But even among all the vendor gloom the sun still shone in brief patches over the weekend. 

4 Deepdene Place, Balwyn (Balwyn!) Sold for $4,750,000 after an expression of interest campaign that had four parties in the queue. That’s a very strong result, east of Burke Road.

We were also surprised by the number of bidders at some auctions. We had hoped they would all be safely inside packing for the holidays, but despite weather that had penguins staying home by the fire warming their happy feet, the Scotts and Amudsens were out in droves, probably because waiting for the real estate world to wake again in March means not moving before mid year, and that’s too long for some.

While there are signs that many vendors are moving to meet the market, there are still properties that just won’t move.

5 Anderson Street, Malvern has been on the market so long that its For Sale sign is due for classification by the Heritage Commission. Again it failed at auction. Not even a cheeky bid; although sharks may be circling.

52 Millswyn Street, South Yarra An address many would die for died at auction after one lonely vendor bid. Issues, anyone?

Same can be said for 2 Devorgilla Avenue and 17a Clendon Road, Toorak. Problems, problems, problems.

So, as in the poetry of the film biz: flush the talent, kill the brutes, that’s a wrap.

See you next year. Hope your hols are safe and your year rewarding.


Visit the Morrell and Koren website


Bayside: A lot of angst, a little cheer.

With the exception of one or two late auctions scheduled for next week, the Bayside auction scene for 2008 limped to a damp conclusion this weekend; lashings of rain being about the best thing auctioneers have seen for some time.

Over the next four to six weeks vendors who have yet to find buyers will be considering their limited options. Those thinking of going to market early in the new year will have to give hard thought to what prices they can realistically expect; and the virtues of private sales vs. auctions.

In the current market, as has been observed elsewhere, prices for properties up to and around $800,000 appear to have stabilised somewhat; at least they haven’t suffered the hard knocks experienced in the million plus band. Up to 12km from the CBD, lower interest rates, first home buyer grants, investors, mum and dad assistance and 30-something returning expats have all been instrumental. The better choices are even seeing more than one bidder.

If you’re looking at this level, we think there are opportunities that may not last beyond mid 2009.

And then there’s the middle and top end.

The forecast is pain, pain and more pain followed by stability and then the first signs of price growth. (That’s the easy part done. All we need now is the timing.)

What does seem sure is that stressed sellers at these levels will not be able to hold out for more than a month or two against some very insistent banks. The decks should be considerably clearer by mid-year, but in the meantime those who are not ” forced” sellers ? people who are selling for all the traditional reasons such as wanting to leave houses that are too big or small, who have been transferred or divorced or any of a myriad other good reasons ? are having the values of their properties shredded by neighbours who have made the wrong calls on the bourse and now have to take whatever they can get.

Silver-lining time: if you’re cashed up and looking for value between $1.3 and $4 million, depending on where you are looking, the first half of 2009 is the best it’s been in over a decade.

And there have been a few (very few) Brighton auctioneers with somewhat brighter faces following several results over the week.

5 Brandon Close, a gracious old Brighton dame on some 12,000 sq ft/1115 sq m, sold prior for $4 million to a buyer who will probably demolish and rebuild.

76 South Road is a new spec house on 650 sq m; reasonable buying at $1.85 million

10 Rooding Street is a recently and extensively renovated single level timber house on a modest 604 sq m. It sold immediately after auction at a very solid price in the vicinity of $1.45 million

Beaumaris saw 3 Pacific Boulevard sell for $1.25 million.

Close but no cigar at Black Rock: 14 Second Street passed in at $1.6 million. Later offer of $1.625 million and the vendor holding out for $1.68 million.

Hampton and Sandringham had a mixed day: equal numbers selling and being passed in.

We are seeing more and more sales being passed in and reported as undisclosed in Bayside; which is passing strange. Are the bids so embarrassingly low that auctioneers cannot bear to see them in print? And what’s in it for a vendor who, having spent serious money on a marketing campaign, cannot realise even the residual value of having a known price on a property that may attract (at last!) a buyer?

So farewell, 2008. If nothing else, you provided a memorable ride. In years to come, when real estate agents meet, you’ll be hearing “I was there in ’08”. And the young-uns will fall respectfully silent.

Well, we live in hope. And here’s hoping your ’09 is a good one.


Scroll to Top