May 4: “REIV? This is Earth calling …”

What planet do they live on?

Median: “Median (mathematics), the value of the middle member of a set of numbers when they are arranged in order …”

That’s clear enough. But it’s nothing but misleading when applied to house prices and it is out-of-date, has little relationship to what is happening now and is not comparing like with like.

And then it leads to you-beaut headlines such as:

“Victorian house prices suffer biggest drop in 40 years.”

Sure did. But so what?

Delve a little deeper into the REIV’s stats and you’ll come across such useful information as Toorak houses dropping 26% in the March quarter and 33% over the last 12 months.

It is high time the REIV and its so-called experts learnt that judging property by median values is useless and they should go back and do a valuation course. Regrettably there is still a lack of real information accessible to the buyer with respect to the property market; and apparently that’s the way the REIV likes it.

It’s not rocket science: start with land value (position, area and outlook), then add improvements and factor in scarcity and desirability (or lack thereof). And ignore misleading medians.

End of rant. Thank you, we feel better now.

Meanwhile, back on earth …

Things are still moving, but at their own more-considered pace. Not a lot of activity, and sales often at the lower end of vendors’ expectations, but sales are being made. They’re just tending to take weeks when days used to be the rule.

Not a lot of auction activity over the weekend, but those that did take place were not falling over a 30% precipice; no matter how much we wish they would.

100 Hope Street, South Yarra. Good townhouse, four car parks, sold above its reserve for over $2 million and had three bidders going hammers and tongs (they hadn’t read the papers?).

Another townhouse: 21 Trinian Street, Prahran sold for $2.5 million. Its twin sold off the plan last year for $1.8 million. Again, three bidders wanted it. No median value in sight.

3/4 Brookville Road, Toorak a two-bedroom plus study apartment sold on Saturday with three bidders It was on the market at about $1.3 million and sold for $1,420,000.

As for the bottom end, that juggernaught still rolls. Bidders, bidders everywhere and not a lot of think (sorry). Our worry, and we’re not alone, is that a lot people are going find themselves owing more they can handle post June 30.

Our tea leaves for the next couple of weeks? The GFC, Swine Flu and lack of stock still haven?t killed the market and there is every reason they could have. But, out there, buyers want homes and they’re not taking a short-term view. It all gets back to the quality of the house and the position.


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Bayside: Invasion of the property snatchers.

Last December, while the rest of us were breaking up for Christmas, our Assistant Treasurer quietly announced proposed changes to the Foreign Investment Review Board regulations governing the purchase of residential property by foreign nationals. The changes were implemented in March and have greatly relaxed the restrictions and reporting requirements on non-Australian citizens buying a home or land.

For the observant, evidence of these changes has become apparent over the past three months; with a marked increase in the numbers of overseas buyers attending open houses and auctions.

Agents seem to have been caught flat-footed and are largely unaware of the amendments – but are obviously grateful for the increased traffic. No doubt some are even taking credit for attracting this new class of buyers claiming it is the result of their fabulous marketing or incredible web presence. Or charisma.


In reality, it’s the buyers who are a step ahead and are taking advantage of the changes to buy into the weakened top end of the Bayside market; Brighton in particular.

Last week we reported the sale of 49 South Road, Brighton for $4.25 million to a Chinese buyer. It seems this is only the beginning.

This week 15 Kent Avenue, Brighton has finally been sold after languishing on the market for almost 12 months. Originally being touted at over $5.25 million, agent number three has found a buyer at last. It sold before last Saturday?s scheduled auction for the sobering price of $4.225 million to another overseas buyer.

The same vendor has also offloaded a vacant allotment at 4 Miller Street, Brighton for $3.85 million. Originally marketed as the site of two luxury new homes with sweeping bay views, development plans were shelved recently due to lack of interest. This buyer is a local, having just sold a landmark residence at 32 Middle Crescent (see our report of the 30th March), for a price now believed to be much closer to $10 million, and intends to build a new family residence on the site.

Over in East Brighton, the agent has done the almost impossible by finally selling 13 Lysander Street. The newish house was not blessed with universally appealing looks, but was spotted on the internet by another overseas buyer and it was love at first sight. The keys changed hands for $1.85 million.

Last week we reported a passed-in result at 328 St Kilda Street, Brighton with a post auction price of $2 million+. The property has now been sold to another overseas buyer for $2.3 million. It’s 1500sq m and a potential development site, we will keep a keen eye out for a planning application sign to appear on the front fence.

Over the road in The Golden Mile, 4 St Ninians Court has been sold for $3.025 million. It’s 690 sq m (7425 sq ft), a level and vacant site carved from a neighbouring property.

The standout sale for the week is the relatively efficient sale of 19 North Road, Brighton. Designed by Charles Webb, the 1886 property sits on 2440 sq m (26,300 sq ft) and has not been touched in many many years. A local admirer has paid a price believed to be in the vicinity of $6.75 million against a private sale offering price of $7.3 million.

Bayside auctions (with the exception of Bentleigh) took a back seat to the number and scope of private sales negotiated throughout the week.

Following the disgraceful performance at 3 Butler Street, Brighton last Sunday, auctioneers and agents were largely on their best behaviour with most properties selling within an acceptable margin of the quote.

However words exchanged between a buyers advocate (no, not us for once, and it’s good to see others taking up the cudgels) and the auctioneer 4 Roseberry Avenue, East Brighton. Quoted at $990,000+, the auctioneer did a dummy spit with the advocate who continually and rightfully inquired if the property was on the market as the price bid was by then well in excess of the initial quote. The advocate then received some unexpected support from other outraged attendees who also pubically voiced their displeasure at the agent’s and auctioneer?s handling of the quote, the lack of transparency and there were references to mushrooms, among other things. Composure was regained and the property was eventually knocked down for $1,260,000 … 25 % above the quote! The locals were certainly entertained but the buyers are getting restless, so guys, let’s work a bit harder at getting the pricing right.

34 Rooding Street, Brighton East went for $1.25 million against a quote of $1,050,000. That additional 20% might pay for a calculator.

More acceptable was the outcome of 5 Roosevelt Court, Brighton East which sold for $1,020,000 a mere $30,000 above the quote.

31 Agnew Street, Brighton East a well-presented double-fronted weatherboard Victorian, sold for $1.1 million after being listed with a cheery selling agent for just five days. Why so cheery? Apparently the opposition had it for sale since July last year.

Elsewhere in Bayside, the standout suburb is again Bentleigh with 100% auction clearance (8/8) plus a handful of private sales.

See you next week.


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