Thermometer drops! Arctic blast rips through market! And it’s not just weather!
Yes, the auctions ran inside, but even there it wasn’t a whole lot warmer. We are not used to this in sunny MEL. Forlorn groups of near-neighbours who have only shown up for the entertainment (too cold for footy?) while auctioneers work to get some theatre happening. Tough audience. Buyers with hands in pockets. The loudest noises the chatterings of teeth.
And what’s happened to Toorak? Only one auction (a little maisonette which sold for $1,570,000).
What’s happening is that many sales are being taken off-market. Vendors of AAA piles don’t want to see them passed in then have to start dealing from disadvantage. You may have noticed that there were auctions scheduled for last weekend that suddenly became “expressions of interest” campaigns. Now you know why.
(But, and it can be a big but, even if you have $8-10 million to spend around Toorak or South Yarra at the moment, there simply is not – at least this week – any AAA property available.)
Further afield it wasn’t a lot warmer.
1 Mary Street, Malvern saw not even a seal on an iceberg ? a vendor bid of $2.4 million with a vendor’s expectations at $2.8 million. Who is kidding whom?
14 Avoca Street, South Yarra, sold at a very secret price. The near-identical terrace next-door has been on the market for six months. You have to wonder how low they had to go; and how much of a hurry they were in.
4 Crimea Street, St Kilda. Up for auction again after selling last year for $1.85 million. It was passed in then sold later for $2.1 million. A relieved owner is likely to have recouped costs and avoided a loss. Not all will be so lucky.
There were still a few places where vendors glimpsed the sun.
25 Barry Street, Kew. Un-renovated Victorian on a little under 20,000 square feet sold for $4,510,000 against a $4 million expectation and there were multiple bidders. Large blocks of land will always be sought.
4A Haverbrack Avenue, Malvern, a modern home on 10,000 square feet sold for $4,430,000. A house down the road on 7,500 square feet sold six weeks ago for $3,950,000, so that’s about where it should be; but no cause for breaking out the champagne.
8 Fairview Grove, Glen Iris, a wonderful renovation, had a reserve of $3.1 million, five bidders, and sold for $3.55 million. When all is said and done, when it’s all done well, it will sell.
And then ?
One very hot spot was the off-market sale of 22 Berkeley Street, Hawthorn. Rumour has it that just under $6.5 million changed hands and it still needs a bucket spent on it. The vendor knocked back $5.9 million last year and that ? gutsy ? call was vindicated.
So here we are. The market has hit its first real speed bump in 18 years and a lot of agents who don’t have the ability or experience to close a deal are struggling to keep their BMW’s on the road.
Expect to see a needed clean-out in the real estate agency world over the next six months.
Expect to see more experience shining through; while we’ll expect still more calls from agency principals chasing us with off-market proposals (the local latte business faces ruin).
And expect to see some very good deals on pre-loved BMWs.
Overcoats and umbrellas were the order of the day while bidders kept their hands and cheque books firmly in their pockets at auctions down by the Bay.
But those who blame the weather are missing the message.
It’s the market, stupid. It’s changed.
Quoted prices are too high. Over-the-top vendor bids which are meant to get balls rolling are instead seeing them flying out of bounds on the full (at which point many auctions are descending from theatre to farce – the feigned surprise and frustration on auctioneers’ faces are expressions to behold).
Enjoy stony silence? You should have been at:
6 Orchard Street, Brighton, quoted privately at $3.1-3.3 million before auction. Passed in on one vendor bid at $3.05 million with a published reserve of $3.4 million. Prediction? $3 million should do it.
38A Drake Street, Brighton. Quoted at $1.4-1.6 million. No takers at any level. Passed in on a single vendor bid of $1.4 million. Prediction? If offered $1.4 million they should grab it.
While the “on day” clearance rate shivered at 40%, there is better news for buyers. Over a dozen private sales were recorded for the week, a number of them the residue of properties passed in at auctions going back as far as March 1.
8-10 Lewis Street Brighton, passed in at $2.3 million against a reserve of $2.6 million sold this week for ? (drum roll, please) $2.3 million.
54 Sussex Street, Brighton was also finally cleaned up at a get-out-of-jail price around $4 million.
All proving again that, for astute buyers, there is the occasional gold mine in among the land mines.
And now a cautionary tale:
36 Crisp Street, Hampton. An ambitious and somewhat apologetic quote of $1.8-1.9 million. The auctioneer’s opening vendor bid of $1.7 million is greeted with silence by the attending throng (three men, two wet dogs).
More silence. Then a solitary and ill-timed bid of $1,710,000 is made by someone who really, truly, needed to know better. Gleeful, the auctioneer strikes and reels the hapless bidder inside for some serious negotiation.
Have you ever seen a fish filetted?
$1.8 million later, the fish had found a home.
The moral of this story is that it is better not to swim alone in unfriendly waters. Modesty should prevent us from claiming that we could have saved that poor buyer $100,000 or more, but we’re not very good at modesty.
While lower pre-winter stock levels are reducing lower Bayside auction and sales activities, Bentleigh and East Bentleigh remain solid: a total of 17 sales and only 2 passed-in auctions for the week.
And while agents are starting to grumble about lower forward auction listings, keep your radar tuned for quieter “sleeve street” listings that all agents have from time to time. You just need to know how to shake them out and (blatant plug warning) ? that’s that we do.
The Snout from the South. DNT