Markets of One…

There is no single market at the top end. No rows of identical mansions, each on its allotted acre with pool, tennis court, six car garage and eight bedrooms.

Here, every home is its own market and every vendor needs to understand that.

But, too often, doesn’t.

Too often, and too often persuaded by agents who should know better (or know anything, in some cases) their expectations are so far from buyers’ realities that never the twain do meet.

Thus the wallflowers are still there as the seasons go by, with little more than the attentions of their gardeners and a succession of agents.

Heyington Place

Haven’t we met before?

There’s a familiar look to 3 Heyington Place Been on the market for 12+ months, two failed EOI campaigns and as many agents. A price cut in eight figures and still no takers? The price? The vibe?

So. What’s up in the real world?

  • Off-market is becoming more fashionable than ever, even down in the lower reaches. Along with Expressions of Interest, they’re agents’ games with agents’ rules. Tread carefully.
  • Good homes are hard to find. (Really?) That’s always been so but since around Derby Day the odds against a win have become ever longer.
  • The also-rans are still running amid cries of “We’ve had an offer!” to which we suggest you respond: “Show me.” Some of those offers have been hanging out to dry for weeks.
  • At the top end, the lesson for the day is that when the word is “The market is…” (booming, tanking, whatever) then it’s time to go looking for your grains of salt.
Stonnington Place.

Market of One, anyone?

Stonnington Place. $1m over reserve. 

Training wheels (please)

Out-of-area agent claiming six buyers and a sale will be made by six that night.

Next morning, sells to the one remaining buyer at $1m under a previous offer.

Bite. Chew. Indigestion.

Career change, anyone?

Learning to dance

Underquoting. The steps.

Armadale agent quotes $2.2-2.4m, then $2.4-2.6m. 

Get off my foot. The land alone is worth $2.7m.

Surprising statistic

8 out of 10 upper end buyers in Trak and SY come from elsewhere.

They’re not us? There goes the neighbourhood.

Office Wars

High profile marketing campaign is done and dusted.

Agent A: “Now it’s mine. I’ll sell it.”

Agent B, down the hall, goes ahead and sells it.

And the commission goes to… ?

The hype! The hype!

The hype has it that the market is up, up, up. Maybe so at the lower reaches, but Market of One still rules at the top.

Yes, offers are being made at market value but they’re not Christmas gifts.

You could wait for the Boxing Day sales or hang on till March and a different agent.

5 Weeks

That’s all that’s left of the real estate year and Santa’s stocking is still full of houses that haven’t sold.

One Sale

(As reported in the Financial Review)

Neighbour protects his sunlight with $1.72m buy

The property: A two-bedroom single-fronted home at 124 Riversdale Road, Hawthorn, VIC. Sold after auction $1.72 million.

Who was the agent/agency? Richard Earle, Jellis Craig. Buyers advocate David Morrell.

How long was this on the market? Four weeks.

Why did this one sell? [Richard] It sold because of its terrific position in the environs of Scotch Hill. [David] It’s a good property.

The two-bedroom single-fronted home at 124 Riversdale Road, Hawthorn, VIC, sold after auction for $1.72 million.  

Was it overpriced? [Richard] No. It was fairly priced. They employed a professional negotiator who did well on their behalf. He’s an expert negotiator and secured that property at an unemotional price. [David] It was less than the vendor’s expectations. I opened the bidding very high so Richard couldn’t pull a vendor bid and discouraged other people from entering the bidding.

What did you think it would go for? [Richard] That sort of money. It was probably spot on. The market indications were it was going to make certainly in the high $1.6s to $1.7s. $1.8 million would have been a terrific price for it. For an on-main road vs off-main road, there’s generally a 10 per cent difference there. The sales evidence makes it around $1.7 million. [David] I thought somewhere between $1.8 million and $1.9 million.

What was surprising about it?

[David] It was a strategic prudent purchase; well thought out and well articulated and – if I may say so – well executed.

Riversdale Road is zoned [for] density. No-one has got their boundaries protected. It has the propensity to devalue things behind or around it.

There’s a line of houses lying south of this house on Riversdale Road. My client owns one of them. If they had allowed a block of apartments to be built it could have devalued their property by up to $1 million.

The buyer, the owner of a neighbouring property in the street behind, plans to put a covenant preventing higher development on the site and then resell it.  

They were protecting their air rights and the ultimate value of their property. The buyer will put a single dwelling covenant on it. It takes time and money, but it’s that simple.

[Richard] We fielded calls from a number of companies looking at it for apartment potential. [The site was 497sq m.] It would have been double that with the [semi-detached] neighbour’s block. That would have been an option to have that sizeable parcel of land, which if he’d purchased, with effectively then three street frontages – where he had the main road, rear access land and side street frontage – that would have been a very good block indeed. The neighbour didn’t end up bidding on the day.

[David] The key to this – neither the vendor nor the agent were aware of who I was buying for. They thought it was just another couple. Had they known they probably would have calibrated their price expectations [up].

Since we’ve bought it the market has kicked on. People are now acknowledging that the market has kicked on. The original plan was to put a covenant on it and flick it out the door, but why wouldn’t you hang on to it for a year? It’s likely to go up 10 per cent or 15 per cent.

Do you reckon we’ll see another result like this: a) next week b) next year c) next cycle d) never?

[Richard] Probably a) or b) We’ve listed another house 10 or 12 doors further up the street, with access to the same laneway. It’ll be interesting to see if history does repeat itself there. This is a great example of someone with the financial ability to secure the future of not only their property but the surrounding properties as well.

I think we will see similar results along any of the main roads that have growth zones effectively over their back fence. You can’t buy natural light let alone a view. This is a situation about natural light.

[David] c) Next development cycle. The next time something that comes up that has the propensity for development, you’ll have the issue. It’s going to happen more and more because of planning issues.

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