June 15: Crisis goes missing.

Those not at the coalface could read in Saturday’s Age “Global Crisis Hits Toorak” and come away with a 180 degree view of what was really in store. The article should probably have been headed “Global Crisis Misses Toorak, Last Seen Heading for Perth” ? because in these parts, over the weekend clearance rates approached the stratosphere.

If you look only at the residential market, you could conclude that Melbourne is leading the world out of the GFC. The graph is taking on a distinct U-shape, at the top end driven in large part by continuing stock shortages (in that, at least, we see no early respite).

So what’s up? Is it sustainable? Should those property analysts who were predicting 20-40% drops be seeking alternative employment?

Oh, the unpredictables. We can only tell you what we are seeing; and that’s a solid market right through the inner-city, the reappearance of investors and the added spice (following the FIRB’s relaxation of rules) of overseas interest.

At times over the weekend, it felt like we were back in 2007. Multiple bidders, reserves left in frenzied wakes, auctioneers with grins from chequebook to chequebook.

A peak in margin-call driven sales? In mortgagee auctions? There are always some, but today’s levels are nothing out of the ordinary. So there go a few more crises whizzing by.

The litmus test is always land. The result? Land is not going out of fashion.

32 Grange Road, Toorak sold not all that long ago at the absolute height of the market for $4,115,000. It sold again on Saturday for $4,116,000 ? only (!) $500,000 over its reserve.

12 Como Avenue, South Yarra made a case that land has actually increased in value ? it sold for $4,050,000, about $460 per foot, and that is on the east side; not AAA South Yarra.

Elsewhere, established housing also had some strong results; 22 Stonnington Place, Toorak was passed in for $4,320,000 then sold after auction.

1010 Malvern Road, Armadale a 2 storey Victorian sold for $3,510,000.

1/50 Hampden Road, Armadale a villa unit, reasonably new but a strong price at $3,010,000.

Off-market? A lot of action. Sorry, can’t tell.

We’re expecting two strong weeks prior to the school holiday hiatus and then the winter-proper hibernation could well set in. The surprised expressions will be on the faces of those agents and vendors who are heading north and finding themselves in business class instead of (where they expected to be) clinging to the wheel of the family wagon.


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Bayside: Bidders are back

An auction clearance rate of 84% for the second week of winter has excited those who get excited by records being broken and, as noted above, this reflects the shortage of good property against the pent-up demand being felt by those who reckon they have survived the GFC intact and see nothing but blue sky ahead.

We share the view that the steepest of the residential property market downturn of 2008 and earlier this year is now behind us. One warning bell: the CBA taking the unprecedented step of increasing mortage rates in the absence of official increases by the Reserve Bank. If the other three pillars and the minnows start to see profit in this, there could be an outbreak of more than swine flu. Gloom (as we have seen over the past 18 months) can be very catching.

Buyers, we suggest, should trim their budgets in the expectation of rates rising. Historical lows do have a habit of becoming history.

Bayside? The mid- to top-end has had a busy fortnight; with Brighton in the lead.

Max Hudgton’s return to St Kilda’s senior side against Carlton last Friday night must have been made easier knowing he had finally sold his latest creation at 28 Cole Street, Brighton. Having languished on the market for many months, Max’s patience was rewarded with a sale price of $5.05 million.

An unrenovated Victorian home on 1570 sq m at 44 St Andrews Street, Brighton has been sold for $3.11 million. A few days later, across the road, 65-67 St Andrews Street was sold for close to $2.925 million by the same agent. It was similiarly original and was on 1154 sq m. Both are restoration projects and neither should expect much change out of $1 million.

Another private sale was negotiated during the week for a single level Victorian home at 49 Bay Street, Brighton. It was on 1115 sq m and had an extension and upgrade some years ago. It realized $2.9 million

10 Hartley Street, Brighton is a smartly built town house overlooking Kostka’s playing fields. It sold for $2.1 million after a short private sale campaign.

A well presented single-level house at 29 Murphy Street, Brighton also sold after a relatively painless private sale campaign for $1.665 million.

4 Ballara Court, Brighton found a new owner for $1.57 million.

26 North Road, Brighton tired and run down but on 925 sq m, sold at land value for $2.15 million.

The standout in Sandringham was 11 Keats Street, on 1000 sq m. A well renovated and extended bungalow, it attracted a fair swag of interest and sold for $2.7 million against a quote of $2.5 million.

The next two weekends are particularly busy as sellers attempt to fairwell their property prior to the mid-year school holidays. Later listings are are likely to be slim until Spring. Prospective buyers are advised to remain calm.


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