June 1: Victoria. State of amazement.

Victoria continues to lead the nation: more swine flu, slower trains, more mid-city level crossings and extraordinary real estate clearance rates.

The last few weeks have seen high clearance rates on low volumes. Last weekend volume was up and there was nary a dent in clearance rates. 667 auctions, 82% of which sold.

Even a couple of months ago, would you have believed:

  1. 42 Perth Street, Prahran a single fronted brick Victorian that started at $1 million, was on the market at $1.2 million and selling in front of a crowd of 120 people with three bidders for $1,312,000.
  2. A small original 2 bedroom apartment at 43-49 Clowes Street, South Yarra selling in front of a crowd of 50 people with three bidders. An opening bid of $625,000 leading to an eventual sale at $707,500.
  3. Around the corner, 4/20 St Leonards Court an older style Art Deco apartment 100 metres from the Botanical Gardens, starting slowly at $700,000, on the market at $745,000 and with two investors fighting it out in front of 50 people fascinated by the stalactite pace of the event. It went on and on and on. And on. $500 rises eventually took it to $838,000.
  4. 61-63 Alfred Street, Kew a large Victorian house in between Sackville Street and Cotham Road and in sore need of an update, selling in front of a large crowd for $4,850,000.
  5. In Albert Park a single fronted timber house at 13 Barrett Street on 177 square metres of land sold for $1,061,000.

Toorak was relatively quiet. 90% of the activity was townhouses and apartments. 33 Stonnington Place, which was an original early 1950?s house on a northern block of 1,013 square metres was passed in at $3,250,000, which suggests that developers and home builders are still shy about committing to large projects.


It’s apparent that if properties are well priced and in the right location, there is good competition. Some say that the market will continue to be competitive because of low interest rates and the lack of supply. Others with a more daunting view suggest the economy is still headed for Armageddon and that will flow into real estate.

In the meantime, Melbourne continues to bubble along.

Bubble? Did we say bubble? Surely not.


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Bayside: Tide turns?

The jury has returned.

The verdict is unanamious (well, almost).

Judging by activity across all Bayside suburbs this past week, it appears that sentiment has changed from the fear and uncertainty that gripped both buyers and sellers only a few months ago to guarded optimism that the residential property market has turned and, even as winter approaches, blue sky rather than grey will predominate.

There are a lot of crossed fingers in Bayside.

Why are we not surprised?

Because our pre Christmas 2008 forecast predicted precisely the change we are now experiencing … just that it has arrived a month or two earlier than expected.

For those who delight in mountain and crevasse stats, the peak of the recent boom was clearly Oct/Nov 2007 and it appears the bottom of the cycle may well have been March 2009.

Talk of Recovery is moving from wish to reality; the question is by when and by how much and in that everyone has an opinion but in truth no one really knows.

Our 2¢ suggests the recovery is real, but it won’t be a steep upward curve. Irrational exuberance has left the building.

Meanwhile, in the trenches, there was much activity in Bayside; all the way from Elwood to Mordialloc.

In eclectic Elwood, there were 10 sales from 13 auctions and one lonely private sale. The lower end of the scale was a one bedroom flat at 9/6 Cyril Street which sold for $340,000; and you could have bought four of those for the $1.41 million paid for 90A Ruskin Street.

Around the corner, the sale of 90 Broadway is still a work in progress. The property was passed in at $1.75 million on a vendor bid and a reserve is yet to be revealed. (Why oh why are reserves still secret post-auction? Are agents frightened they may be ambushed by someone with money?)

In neighbouring Elsternwick, the clearance rate was 100% with five auctions and five sold; plus a clutch of private sales during the week.

Brighton performed well: 11 sold from 13 offerings. The top end sale was 4 Manor Street. It’s a 90?s style house with 10 principal rooms and a tennis court on 1251 sq m. $4.025 million bought it.

14B Well Street was a runaway result at $1.87 million. A refurbished 20 year old townhouse, the agent?s initial expectation was around $1.5 million. Smiles all around.

27 Asling Street sold post-auction for $1.415 million. It was previously touted 18 months ago at $1.6-$1.7 million but an outbreak of common sense eventually prevailed.

9 Dudley Street sold privately for $2.426 million. This property was auctioned in December with little interest and the perseverance of the vendor (and a change of agent) has paid dividends. The price is really land value only.

Cheltenham continued to attract a large proportion of first home buyers: eight sales recorded for the week, including two auctions, all of them in the broad range of $300,000 to $600,000.

Beaumaris was overshadowed this week by its sister suburb, Black Rock:
261 Beach Road on 1086 sq m, sold for $2.025 million in a well contested auction.
28 Second Street an 8 room house on 1189 sq m sold under the hammer for $1.59 million.
27C Bayview Crescent sold privately for $1.47 million.

The Beaumaris highlight was 21A Beach Road selling for $1.8 million following an advertisement headlined ?Must Be Sold?. Sighs of relief all around.

Hampton was much quieter but still recorded three from three auctions, including 45 Linacre Road selling for $1.28 million.

And Bentleigh continues to shine. 100% clearance. 10 from 10 plus another half dozen private sales for the week while slightly further upmarket, neighbouring McKinnon recorded a strong result at 9 Crozier Court selling for $1.381 million.

TET overlooked a major auction result conducted last week at 10 Iluka Street. It finally sold, for $2,886,000, at its second mortgagee auction in seven months. It’s on a high point in Black Rock, only a wedge from Royal Melbourne Golf Course, a vast vacant allotment of 3364 sq m with a rich recent sales history. It was sold four years ago by the long encumbant family at $2.4 million. It was rapidly resold for $2.7 million, then again for $3.1 million and yet again in May 2007 for $3.5 million. When things went pearshape thanks to the GFC, the mortgagee in possession auctioned it at the end of October 2008 with the best bid being the auctioneer’s at $2.75 million. The only real winner (agent?s fees aside) is Mr Brumby. Stamp duty, by our calculations, have benefitted to the tune of some $800,000 over the past four years; all from one property!

Our Queen is having her birthday next weekend, so everyone’s taking a holiday.

Well, some. There will still be some slim pickings that we’ll be picking over.

Until then.


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