Melbourne. The warning flags were flying, but it passed the test!
The market has certainly taken a Panadol, particularly below $1 million and among B-Grade properties and those with ‘issues’, but the top end passed its Beep Test with purchasers still chasing quality properties. This is, of course, quite contrary to what you read in some of the papers … but they aren’t at the coal-face.
What we did notice on Saturday was that most properties sold at around their expected prices. We did not see the 20%-plus frenetic bidding that was commonplace at so many auctions last year. The number of bidders is thinner and opportunities, as a result, were around.
If you dissect Saturday’s results, 36 Canberra Road, Toorak, a 2-storey maisonette, sold for $2.6 million against a $2.3 million reserve with four bidders (clearly, these people don’t read the papers).
Land has always been the litmus test of where the market is ? 5 Barnard Road, Toorak (13,000 square feet of land) sold for $6.5 million. That is $500 per foot and it was a very sloping block.
In Gahan Court in Toorak, 14,000 square feet sold with two bidders.
Even in Armadale, 9 Adelaide Street sold for $2.760 million, which equated to $383 per foot. Remember this is Armadale, not Toorak and is probably a record for the area. There were two bidders vying for the property.
On the flipside, even an awful (in our view) house can sell. Case in point: 1 Grong Grong Court, Toorak. Passed in but apparently being sold today. There is still a lack of stock of quality properties and we believe this will remain at least for the next month or so.
There were some vendors prior to Saturday who were apparently concerned whether the market would assume a pear shape by the weekend and sold beforehand: 3 Cassell Street, South Yarra sold for $1.6 million with a $1.4 million reserve and still needs $800,000 spent on it.
12 Elm Grove Armadale, sold 24 hours before auction for $2.280 million against a $2 million reserve and in this case, it was the buyers who were concerned with competition on the day and wanted to secure it beforehand. And paid a premium for doing so.
Again, investors were thin on the ground and units were struggling.
All the auctions we attended, with the exception of one, had at least two bidders. There’s a lot of talk around that the market is softening. That may yet happen; but not on last weekend’s evidence.
As with all markets, it’s a game. To win that game, you must have a real understanding about where the ball and your opponents are to be found and then align your expectations with those. If you are persuaded that today’s top-end market is softer than it really is, you’ll be disappointed.
Confidence returning in Sydney?
An army of non financial sector buyers, continuing scarcity of quality stock in all but a few suburbs and vendors spooked by events in the global finance markets all made for an active week at the top end without any noticeable downward pressure on prices – yet.
In scenes reminiscent of late 2007, the contest was again very clearly between the eastern and northern suburbs and selling prior to auction was the way they ran.
Of the six Paddington homes over $1 million sold during the week, five sold prior to auction; led by the attractive offering at 280 Glenmore Road, Paddington – a result no doubt helped by the nearby Five Ways road upgrade at last nearing completion.
Bellevue Hill led the way with the six bedroom pile at 81 Beresford Road, Bellevue Hill selling prior for $4.38 million.
Nearby, 26 Bundarra Road, Bellevue Hill went under the hammer for $2.73 million.
Dover Heights was the next suburb in line with the $4.1 million sale mid-week of 10 Wentworth Street, Dover Heights.
The eastern beach side suburbs continued to surge with the four bedroom home at 35 Yanko Road, Bronte selling prior for $2.88 million.
The inner eastern suburbs penthouse market continues to hint at where the pressure of recent global events is being felt with the Top of the Town (227 Victoria Street, Darlinghurst) and Horizon penthouses being the latest offerings to join the rest of this field. “Didn’t the former just sell?” we hear you ask.
In that bracket it is a case of “Which inner east penthouse isn’t on the market?!”
Vaucluse continues to show signs of weakness with more stock offered during the week.
A similar story of solid sales prior to auction on the north shore led by the highest sale for the weekend of 3 Wallace Street, Greenwich for $3.51 million followed by the 4 bedroom house at 53 Mary Street, Longueville for $3.475 million and 39 Cowdroy Avenue, Cammeray – a beautiful part of the earth – which sold for $3.23 million.
The north shore’s Achilles heels are Palm Beach and Mosman where the supply v demand scales of the past year could be shifting the other way. The volatile Palm Beach is always a good litmus test of the Sydney market and is one of the first to fatigue when economic cycles move from glamour to correction. The same goes for other lifestyle/discretionary-spend markets such as the Southern Highlands where the rush to off-load properties is turning into a stampede.
The inner west also showed signs of life with the waterfront pier apartment with City views at 355/3 Darling Island Road, Pyrmont at last selling for $2.38 million.
Bucking the depressing trend evident from the forest of “For Lease” and “Auction” signs in the main Darling Street drag – thank the council and its rapacious parking meters for that – the unusual north facing offering at 89-91 Grove Street, Balmain sold this week for $3 million. Given the depressing state of the local shopping centre and the worsening traffic snarls getting in and out of the area, it will be an interesting test of this market to see how Sunland fares with its uber luxurious apartment development at 36 Louisa Road, Birchgrove. How does $10.8 million sound for 357 square meters internal space?
Could you get by with 347 square metres? The penthouse at the Gazebo has made a public appearance (at last) and it’s only $8.95 million.
All up, the top end in Sydney this week was a big improvement on last week; with solid although not stellar results over most of the market and some vendor pain at the margins (no pun intended).