June. The solstice descends and, along with the shortest day, we usually have the least active market. Not this year. Clearance rates are off the Richter scale.
In fact it’s not just one market but three and – at least for the time being – they all appear to be working in unison. But one question hovers over them all: how long can this go on?
- The bottom end. Buoyed by the governments’ first home-buyers’ incentives. If, and more likely when, the incentives are removed or reduced, that ship will sink.
- The middle. Mostly riding on the back of the bottom end. When things are busy down there, there’s a trickle-up effect. There’s also relatively little on offer and investors are now becoming more active, particularly between $500-800,000.
- The top end. Clearance rates are as high as those at the other end of the ladder, but the volume is nowhere. $5 million plus sales in the last quarter were the lowest they have been in a decade. With so little quality and so little choice on offer, when the right property comes along, it’s not around for long. When volumes return to more typical levels, it’s likely prices will come under pressure.
Vendors, too, have contributed; reducing their price expectations back toward levels which represent value.
And there are, as always, the exceptions (the unthinkable exception is is a weekend without exceptions). Those swimming against the if-you-list-it-it-will-sell tide have price expectations firmly fixed in the stratosphere – and there’s not a lot of life up there – or they are marketing properties with Issues. That’s with a Capital I.
Meanwhile, back at the coal face …
1097 Malvern Road, Toorak – a period home, but probably not for long – sold for $3,115,000. That’s about $220 a foot and not by any means exceptional.
Some quality offerings which achieved strong results:
- 1/4 St Georges Court, Toorak great address and a good townhouse, sold for $1.5 million against a $1.3 million expectation.
- 8/2-4 Lansell Court sold prior to auction for $2,350,000. A good result given they paid $2 million for it a couple of years ago and this has traditionally been a hard block to sell in.
- 25 Loch Street, Camberwell a good period home, sold for $2,750,000. A vendor who didn’t want to risk a no-sale before the school holidays?
And some wallflowers:
- 19 Oak Street, Hawthorn a period house up for auction for the second time in six months. It was passed in again on a vendor bid of $3,600,000. Issues, anyone?
- 68A Clendon Road, Toorak a modern house on 5,000 square feet. We’re lead to believe they were offered $5.6 million and want more. Reality check required.
Observation of the week ?
The turnaround in the “Cinderella” suburbs of Albert Park and East Melbourne, which were particularly belted over the last six months with margin calls and GFC pressures.
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Multiple buyers, plenty of bids and strong private sale activity marked the second last week of the financial year in Bayside. Have people not realised we are in the middle of Winter?
Only a few months ago, the vast majority of auctions were receiving little interest let alone any real bids. The order of the day was:
- auctioneer’s spiel
- auctioneer passes property in on vendor bid
- auctioneer scratches head.
In only a couple of months, that’s all changed:
- auctioneers spiel
- auctioneer swamped in genuine bids
- auctioneer calculates commission
- auctioneer orders champagne
Several weeks ago, we spoke of the ripple effect: the strength in the sub $1 million market trickling up to the one to two million range and prospects of movement ever upward to the top end.
Some ripple. Saturday was a tidal wave. The big kids came out to play and three auctions in Brighton went close to $3 million and over.
But the real surprise was the number of bidders competing up to those levels.
And so …
7 Cosham Street, Brighton is a tired single level 1980’s house with an indoor pool but it’s in an excellent street and on 980 sq m of northerly rear facing land. Quoted at $2.4 million +, a bellow of seven bidders drove the final price to $2.97 million, at which point it was gleefully knocked down by the auctioneer.
The winning bidder had that very morning achieved a solid result at the auction of her own house at 10 Murphy Street, Brighton. It’s an as-new and very stylish house with 10 main rooms on 845 sq m. The buyer had spotted the place on the internet, flown in from Sydney on Friday, plonked down $3.5 million and bought it. Most of the marketing budget would have disappeared into print media; all to no effect. Time to sell your shares in Fairfax?
2 Lorac Avenue is a 10 room resort on 600 sq m and has a serious outdoor living and entertaining area. It sold immediately after the auction for $3.475 million.
76 Were Street, Brighton was, befitting the style of the house and the dignity of the industry, a less frenetic auction. Not. It was conducted around a large in-ground pool and had four bidders on its way to selling under the hammer for $2.25 million. The gavel-banger was so excited at seeing such interest that on several occasions he was perilously close to taking the plunge, but robbed the crowd of just-add-water entertainment by staying out of it.
A vacant allotment of 761 sq m at 63 Lynch Crescent, Brighton sold for $1.75 million. That’s $2,300 per sq m or $214 per sq ft in the old money. If land is the litmus test, this is a result of more than passing interest. Land sales were being ignored only a few months ago. This sale suggests the sector has recovered by at least 10% in the past quarter.
Two sales at the lower end of the Brighton market demonstrate its continuing strength. Each is on a compact allotment and each was quoted in the early to mid $900’s.
86 Cochrane Street a classic “ugly duckling” with little to love other than its position had nine bidders fighting over it before the exhausted auctioneer dropped the hammer at $1,153,000. Myer’s Boxing Day sale had nothing on this.
9 Byron Street achieved almost as much with the successful buyer putting down $1,145,000 for the privilege.
Only one no-sale on the day: 373-375 New Street a former service station and automotive workshop, was passed in at $1.725 million. There was a later offer of $1.85 million. The reserve is $1.95 million.
A smartly turned out town house at 3/1 Thomson Street sold privately for $1.5 million.
2 William Street on 545 sq m, sold at land value only for $1,220,000.
East Brighton? Busy.
A land-value (836 sq m) sale under the hammer at 6 Baird Street realised $1.225 million
8 Sunlight Crescent a single-level 7 room brick house on 847 sq m which backs onto Dendy Park sold for $1.26 million.
16 Camperdown Street a land-value property of 850 sq m., was marketed as having a “floor price” of $1.2 million and that offers at that level or better would be considered. We think “floor price” and “reserve” are synonymous and would welcome suggestions for any other coined terms which may assist the industry in further confusing its customers. In any event, it sold for $1,266,500, which is exactly in line with the sales in Baird Street and Sunlight Crescent.
181 Dendy Street opposite Brighton Golf Course, is a cleverly renovated and extended 1950’s home on a triangular corner block. It sold for $1.525 million and everyone was very happy.
Hampton through to Beaumaris? Busy.
2 Olinda Avenue, Beaumaris sold for $1.225 million.
10 Hutchison Avenue, Beaumaris was passed in on a vendor bid of $1.3 million, there was a later offer of $1.4 million but still a fair gap to the reserve of $1.525 million.
6 O’Connor Street, Black Rock was knocked down for $1,170,000.
63 Bridge Street, Hampton on a compact 452 sq m allotment, just tickled over the seven figures to sell for $1,015,000.
15 Alicia Street, Hampton was auctioned on Saturday. No result was reported, but discussions are continuing with two potential buyers.
Several other private sales were negotiated during the week around the $1 million mark.
15 sales from 15 auctions plus a serious handful of private sales. Auctions continue to be the marketing method of choice in Bentleigh and for good reason.
Elwood? Busy. For Elwood.
The standout result was 32 Vautier Street. On a modest 450 sq m allotment, it sold for an impressive $2,625,000.
The week ahead? Busy. Very busy.
We expect a scramble among home buyers and investors for the little stock remaining between now and June 30 and the extended mid-year school break. Following that, pickings will be thinner until Spring.
For many, Spring can’t come quickly enough.
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