GP fever? Patient goes to bed.

It’s a buzz through the inner suburbs (with many of those who live there attempting to swat it). It’s a fever that’s supposed to spread to the auction scene, but to the untrained eye a lot of not very much was all there was to be seen.

[pullquote]All the real action was under the water.”[/pullquote]Those not deafened by the buzz were watching the swans. All the real action was under the water. Six serious sales over the past two weeks – sales that would have been unlikely even a month ago – and all happening out of sight.

What can be told?

• Kooyongkoot Road, Hawthorn. Sold after an expressions-of-interest campaign slightly on the happy side of $8 million. (But not that happy, the vendors had paid over $9 million.)
• 16 Selbourne Road, Toorak. Another EOI. Quoted up to $5.5 million, motivated vendor prepared to sell at $5.25 million and received $5.62. Happy? Maybe. But the Council valuation was $5.5 million, which doesn’t suggest a speed record. (We’ve had a number of people comment that Council valuations are notorious for wildly under-estiamting real values … that’s the point. Sorry if it wasn’t clearer.)

Capital gains, anyone? Anyone? Only in the history books.

And still there are those who are dreaming there are people out there ready to pay 20% or more above what the market is saying. Those very same dreamers who were waiting for Santa and a big sack are now hoping the Easter Bunny will come hopping in. And if that doesn’t happen, there’s always Anzac Day, the Queen’s Birthday, next Christmas…

To top all that, there are some pot-holes causing great grief among top end agents. One of their newest darlings, the post-EOI boardroom auction, looks like it has just hit the wall. “It’s an auction,” says the new rule. “So what?” say the agents. “Cooling-off period, that’s what.”

Oh.

Not only must the auction be publicised for two weeks prior, the winning bidder in the boardroom has three days for a mind-change. And does. Leaving the agent to scurry back to the under-bidder to save the sale at a somewhat respectable price. Chances? Not good.

The choices are narrowing. An EOI without an auction option is potentially a dead-end. Auction-auctions are the last thing most in the top end want (who wants hordes of strangers traipsing through their mansion?). A “private” auction? How many potential buyers will bid before an auction even begins?

Does anyone remember the private sale?

An agent agrees to sell a property at a certain price and when buyer and seller agree, a sale takes place?

Too simple? Not enough income for agents to make it worth their while?

No big ad spend to keep their names up in lights?

Sorry. Terrible idea. Can’t happen.

David Morrell

Bayside: Spins wheels

More spin than traction?

The momentum that appeared to be developing in Bayside over the last few weeks may be short-lived. The weekend results had a pallid clearance rate and prices were less than stellar. Unless properties were exceptionally located and in exceptional condition, buyers went not 1¢ over the odds.

Take the temperature:

• a leading local agent gets cold feet over committing now on a small investment flat (and how difficult does that make it for him to persuade anyone to go where he won’t?)
• for the first time since the early 90’s, we’re seeing buyers only prepared to buy subject to the unconditional sale of their existing property – and vendors having no other choice
• because banks are tightening lending criteria, there’s talk of sales returning on Vendor Terms (you haven’t been around for 100 years and haven’t seen that before? It’s when the vendor is the lender)
• banks tightening lending criteria

So, for the agents, the road ahead is not as sunny as it may have looked. If you were on your bike you could say you have just crested a little rise and the road ahead is looking flat. With a bit of a headwind. Pedal. Pedal harder.

And yet …

Sales are still happening. They should be. This is, after all, one of the prime selling seasons. In fact there were over 60 sold in Brighton and Brighton East over the last 30 days; but the median was $1.2 million – a long way this side of a record. Most activity is at the lower end with anything over even $3 million countable on your fingers.

And still there’s a happy chappy wandering Hampton and Beaumaris telling all who will listen that he can’t get enough to sell. And telling no-one that it’s all down where you wouldn’t want to know.

The exceptions? The $3 million and over sales in Brighton. In the last fortnight:

• 55 Sussex Street. Passed-in last year after hopes of $4 million plus. Sold for a number which we believe was nearer 3. Ouch.
• 1 Norwood Avenue. A door from the beach and 1050 sq m. Said no to $3.1 million and yes to $3.2. Solid.
• 29 Seymour Avenue. 1100 sq m. Builder’s big house. Listed last year with something over $5 million on the ticket. Marked down, we believe, to closer to $4.5 million.

Straying a little: 241-243 Bay Street, on the corner of Clarkson Avenue, was auctioned during the week and sold at $2.58 million. It last sold for $1.2 million at auction the very day that we remember as 911; where a lone bidder was the only one brave enough to commit when everyone else was contemplating Armageddon.

And then, in Elsternwick: a well renovated and presented Victorian on close to 800 sq m at 29 Orrong Road. Several eager hands took it past $2 million and it sold for $2.1 million; making it the highest published sale price for the weekend.

Take an unaccustomed bow, Elsternwick.

In all: not many new listings that would interest you and still many left dangling from last year.

Damian Taylor

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Price is Right for Trophy Homes

Melbourne’s prestige market isn’t falling off a cliff as everyone thought a
month ago, says buyer’s advocate David Morrell. While the pulse at the top
end … The Australian Financial Review