End of the day. A gargle of estate agents around a bar:
“Mate, it’s a wonderful market!”
“It’s never been stronger mate!”
“Look at the clearance rates mate!”
“Mate, I gotta tell you …”
All true. All true. Depending on where you look.
But we’re seeing some cracks, some signs of a market that has talked itself up to heights which cannot be sustained. And we’re still seeing a lot of long-term unsold mansions; and more joining them each week.
The top-end choice, encouragingly, is wider now than it has been for months. There is quality to be found; and in this faltering market we have recently bought several properties for significantly less than written offers would suggest they would sell for as little as three weeks ago.
OK. Put that down to our fabulous negotiating skills or (more realistically) put it down to our recognition of vendors who are ready to, and need to, meet the market and hear some persuasive arguments for reality checks.
Other signs? Significantly fewer bidders and more top end properties being passed in. You may have read today of a boom in the expensive suburbs. Not at the very top. And since those stats were compiled, it’s looking more fragile.
And, as always, there was the exception.
32 Grandview Grove, Prahran, a two storey Victorian requiring a money-pit renovation went for $4,410,000 and confirmed that period houses are often exceptional.
Elsewhere? Train crashes. More anxious vendors and fewer nervous buyers. Vendor bids were heard across South Yarra; and often stopped auctions in their tracks.
- 7 Kensington Road, 2-storey Victorian, normally something highly sought after, killed by a vendor bid of $4 million.
- 76 Caroline Street, another 2-storey Victorian. Another death by vendor bid ($3,200,000).
- 22 Davis Avenue. The record is stuck: Dead. Vendor bid ($2,500,000).
- 76 Mason Street. Totalled. Vendor bid ($1,750,000).
Meanwhile, in Toorak, 5 Hopetoun Road went up for auction for the second time in six months. And was passed in with (hallelujah!) a real bid of $6 million. It sold later for a cigarette paper more to the one person who was interested; which is a fair pocket full of change from the $7-8 million they were chasing previously.
Look a little further, to Hawthorn and Malvern, and everything sold, sold, sold. Look in the AAA areas and it’s soft, soft, soft. It’s the flip side of 12 months ago.
Citizens, if nothing else, you can’t argue that volatility is dull.
The Henry report.
The government appears to have left the property market alone – no great surprise – but its move on the miners may see an investors’ retreat from the stock market (BHP and Rio are being battered on the ASX as we write) and back to the comfort of property. It won’t happen overnight and it’s likely to underpin the lower end.
More auction fun.
There are too many blokes with big voices who love nothing more than standing outside houses bellowing their audiences into submission. It’s a bully’s approach to auctioneering. A good lie? They’ll tell it. They’ll yell it.
The latest doing the rounds is the threat that a property will either be sold or passed in on the third call; that there will be no referral to the vendor (what their terrified vendors think of this hasn’t been recorded – are they expected to withdraw their houses from sale?).
So it’s passed in. And then the auctioneer starts the auction again.
Pardon? Didn’t you just say …?
We think it’s deceptive and we’re ready to go to court (again). Our advice is that this practice is in breach of the Trade Practices Act and is misleading and deceptive. Bellowers, you have been warned.
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Bayside: Champagne to sav blanc.
… still white, still alcoholic, but no fizz.
Thus was the sense of the auction scene in Bayside over the weekend: no sparkle and definitely flatter. The frenetic activity that had been evident since January was noticeably absent.
Brighton’s clearance rate slipped to 61%, East Brighton was 75% and there was often only one bidder and then an arm struggle later a pass-in and no cigar.
For the first time in many months, buyers have something to smile about: choice.
May looks like being Melbourne’s busiest month, ever: 2,500 auctions. Are vendors choosing to go to market before winter? Is there a fear that the good times cannot continue: that it’s now or never?
Truth is, some of the passed-in properties were not A grade and were treated accordingly. If this is an early sign of a wind-shift, there will be a move to quality. The best will sail merrily on and leave the pretenders and the over-priced in their wake.
Highest price on the day was 3 Keith Court, a tightly held cul-de-sac off The Esplanade. It’s 560 sq m and has a view over the Bay and to Green Point. It sold for land value: a serious $2.9 million or $5200/sq m. Only six weeks ago, its near neighbour at number 9 – on 582 sq m – sold under the hammer for a relatively modest $2.3 million (less than $4,000sq m). Either someone paid way too much or a bargain was had. We never claimed it was easy to call this market; particularly when you see two very different results for two very similar properties.
The standout pass-in of the day was at 7 Kilrush Street. Originally listed (in 2009, it’s had a birthday on the market) in the mid-$3 millions, it was passed on Saturday on a vendor bid of $2.85 million and now they’re asking $3.1 million. That train, we suspect, has left the platform.
5 Cairnes Crescent limped to $1.95 million with one bidder and an agent deserves a glass of chardonnay for extracting another $175,000 in post-auction discussions. In our book this was land value only: $3,160/sq m.
On (excluding Nepean Highway) Bayside’s busiest road, 399 St Kilda Street sold for $2,210,000 while, in quiet Young Street, number 12 failed to excite and was passed in at $2 million. They’re now asking $2.25 million.
Brighton East was more affordable, more saleable:
Nothing showy, still solid.
Two recent private sales worthy of comment:
A potential development site at 10-12 St Andrews Street; across the laneway from The Pantry, opposite Brighton Grammar. 1040 sq m with a rambling brick home included, it has been available for sale for close to two years at about $4 million. Patience was rewarded with a sale negotiated recently at $3.8 million. Expect to see apartments arise in the near future.
46 Sussex Street, a rare single-level purpose-built townhouse with a basement garage has been sold for $2,825,000. We believe that sale is linked to another in the new apartment development, Avignon, at 11 Well Street.
Well Street apartment sales are as strong as they have ever been.
- Another three were sold in Avignon in the past week; all at prices over $13,000/sq m.
- The still-newer development at 15 Well Street has hit the pre-sales cash register at $14,000/sq m
Eclipsing them all, the boutique development of 4 apartments at 2-4 Sandown Street in the Golden Mile has also racked up a presale to the tune of $3.5 million with unit 2 being negotiated recently.
Elsewhere in Bayside, leafy Beaumaris and its smaller twin Black Rock had a dirty day with the eight auctions scheduled resulting in one prior to sale at 1/1 Rene Street at $720,000 and apart from 2 Stawell Street realising $1.266 million, the most exciting thing to happen was the auction of a bathing box on Beaumaris Beach which achieved $115,000. The remaining five offerings all passed in giving Black Rock the dunce’s cap: clearance rate zero.
Hampton did better with adjacent properties at 9 Myrtle Road and 11 Myrtle Road selling for $1.62 million and $1.453 million respectively and 10 Villeroy Street (sorry, no link) selling prior at $1.175 million.
We have been recommending Parkdale in the lower Bayside for some time: village atomosphere, train service, proximity to the Bay. Six of seven auctions conducted there all found buyers over the weekend so perhaps the message is getting through.
Finally, Bentleigh. Probably the most consistent performer in all of Bayside. Plenty of fizz here: 13 sold out of 14 auctions. A 92 % clearance rate and nothing much decent under $900,000 these days with regular results topping the million mark.
22 Loranne Street is a case in point, its price soaring past seven figures to reach $1.32 million.
Not so 588 Centre Road, a 10 room brick house on 585 sq m. Passed in at $1.8 million with a reserve apparently too frightening to disclose – the only blemish in almost another perfect day in downtown Bentleigh.
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