… the times they are a changin’.
Along with all the other terms we import from the U.S., “gazundering” is a recent arrival – and it signals a market in turnaround. Gazumping occurs in rising markets – gazundering is its evil twin (OK, they’re both evil). The gazunderer makes an offer which, when accepted, is then lowered – and if that’s accepted it’s a clear sign of a faltering market.
We, too, have supped from that cup; but in more ethical ways than some. Recent auction, passed in, we were the highest bidder. Post-auction negotiation revealed an outrageous reserve and away we walked. Three hours later we paid $50,000 less than our previous bid. Walking away can pay.
Over the weekend, 90 Canterbury Place, Middle Park. Passed in at $1.6 million and sold later for $1.59 million. Gazundered?
What a difference a year makes. This time last year Tiger Woods was in town and couldn’t put a foot wrong (well, not that we knew about), the clearance rate was around 80% and agents were looking wistfully toward winters on the slopes in Switzerland and new cars from Germany.
This year? You know about Tiger, agents are nervous and the value of sales at auction over the weekend – while auction numbers were not far from last year – dropped from over $260 million to $115 million and that, fellow travellers, is a significantly large ouch.
Melbourne’s clearance rate is hovering around 60% (Sydney’s is even lower) which suggests that there is a very large number of vendors who are yet to lower their sights; but for most that must be just a matter of time. If frailty has a recipe, those numbers suggest it’s on the menu.
Our sense is that, with a very large number of auctions over the next three weeks, the market will struggle until Christmas and then agents will be praying for re-invigoration during the break. In the mean-time, buyers should not be in any hurry. The choice is yours.
And then, as expected, along come the unexpected. There are still good properties being found, and sold. More and more it’s happening behind closed doors, but…
- 32 Linlithgow Road, Toorak. Passed in, then sold for $3.9 million
- 16 Millicent Avenue, Toorak. Expected $2.2 million, three bidders took it to $2.290 million
But they were the exceptions. More and more, vendors are rejecting agents’ suggestions of multiple bidders soaring way above and beyond reserves and are choosing low-key, low-cost alternatives. If a buyer emerges, they will sell, but they’re not prepared to punt $30,000 or more on a failed auction.
Case-in-point:
- 50 Hotham Street, East Melbourne. Seriously grand Victorian, arguably one of the best houses in the area. Zip. Nada. Zilch. Nope. Passed in on a vendor bid of $7 million, well short of what they paid for it some time ago.
As for the open for inspections on the weekend, given the weather you had to be a real estate junkie to attend them. Crowds? Not there.
David Morrell
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Bayside. Locusts descend
Wet Saturdays and poor results are a common theme this Spring but the inclement weather can no longer be blamed for the market’s malaise.
The prospect of further interest rate rises over and above the Reserve and persistent chat about the high level of Australian property prices vs the rest of the world are making some buyers nervous; and they are becoming increasingly conscious of what is and is not fair value.
The best quality properties are still keenly sought and are being priced accordingly while the rest are being marked down. The problem is that many of the “rest” are still above where buyers are prepared to move – they’re just not biting.
The outlook for the next 12 months or so suggests minimal price growth. It’s understandable that buyers baulk at paying even 5% over their perception of current value.
Party ends in Brighton.
Last week saw a rarely seen 90% clearance rate in Brighton, this week the party came to a sudden end: only 9 of the 22 offerings finding buyers. The highest result reported to us was 35 Cole Street in the Golden Mile. A stately Edwardian that appears to have a past including a number of flats, it’s on almost 1000sq m. While still in need of a pile of money, it sold for $3.45 million.
1/188 the Esplanade, a new ground floor apartment(one of two) was the priciest pass-in for the day. The highest bid was the auctioneer’s $3.5 million. The reserve is undisclosed but believed to be close to $3.8 million.
93A Martin Street provided the most notable gap between buyer and seller. Passed in to the auctioneer at $1.3 million, it then attracted a genuine offer of $1.4 million. The reserve is still almost a quarter of a million dollars away at $1.625 million. The cigars remain in the humidor.
Even the bargain basement offerings failed to excite: 7/16 Warriston Street. Vendor bid $370,000, reserve $405,000.
A private off-market sale of note was transacted for a new house on 800 sq m at 1 Holmwood Avenue: a more than respectable $4,325,000 (the link will take you to an old listing for land).
Beaumaris and Black Rock recorded a modest three sales from nine offerings (including one sold before) with Black Rock failing to trouble the scorer.
Highest under the hammer was 440 Beach Road, Beaumaris: $1,635,000. Highest priced pass-in was a 6-room weatherboard house on 1026 sq m at 19 Ebden Avenue. The only bid was the vendor’s $1.75 million, the reserve is an optimistic $1.995 million.
Hampton and Sandringham sold two from eight. 25%. Fail.
Bentleigh again battled: six sales from 13 auctioned. A victim of its recent success as more and more properties have expectations close to and above the million dollar mark.
Although buyers are cautious, there are opportunities provided they know where to look and understand the circumstances of the sale. A bit like seeing the locust in the swarm.
And then a locust was found on a car in Brighton.
Damian Taylor
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