Mice. Men. Best laid plans. Etc. Etc. Etc.

Melbourne’s temperature did not get out of the teens over the weekend.

It was hot!

The upper end defied belief and continues to befuddle the so-called experts (and there’s nothing so-called about us), but …

But it is very selective. You have a unique period home to sell? Yours is renovated and ready for new owners? Name your price.

That’s not the property you’re offering? Go back to bed.

There we were, back again in 2007, with half a dozen deep pockets at these rare auctions.

The Melbourne market continues to defy the gravity which rules practically everywhere else on the planet. The sense we’re getting is that there’s still a lot of old money around which is well insulated from minor irritants such as margin calls, recessions and global financial crises.

The great restriction remains: lack of choice. It’s why much of the market is stagnant.

Saturday’s surprise package was 67 Avoca Street, South Yarra; a double fronted 2 storey Victorian next to the school and in need of work. Its reserve was $5.75 million. Four bidders. Knocked down for $6,470,000. What’s an extra $720,000 between friends?

If that was a virus, it spread in a hurry.

40 Lambeth Avenue, Armadale is a small, well renovated, double-fronted Victorian. It should have sold for $2 million. Four bidders pushed it to the reserve of $2,010,000 and then someone paid … (drumroll, please) $2,850,000!

$840,000 over the reserve.

Yes. $840,000. Over the reserve. Pardon?

5 Howitt Street, South Yarra is a single fronted Victorian which had four bidders and sold for $1,405,000. Again, well over the reserve.

And there the heatwave ended.

Not period? Not unique? Not interested.

13 Murray Street, Armadale is a good Wayne Gillespie, but probably 20 years old and in need of work. It sold after being passed in for $3,775,000. Good buying, but against little competition.

Still less joy at the auctions of 23 Canberra Road, Toorak (modern ugly duckling with few swan prospects, passed in well short of its reserve at $2,750,000) and the townhouse in 57 Washington Street, Toorak (not one bid).

Elsewhere? Queues of investors at property inspections suggesting … it’s a Connex thing: too many passengers, too few trains. That said, we are beginning to see some small improvement in what’s on offer; especially off-market.

And then there’s the Budget. Any surprises in store?

One position we would not like to be in is foetal: waking up on Mother’s Day morn to the realisation that you were now the proud owner of a property that you paid seven or eight hundred thousand more than was even in an estate agent’s dreams.


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Bayside bounces?

In recent times as the general auction clearance rate has remained steadily in the mid 70% range, we have made the observation that this high rate has predominantly been diven by properties up to $800,000 or thereabouts.

The past couple of weeks has seen that move. We are now seeing properties in the $1-1.5 million range regularly attracting multiple bidders and as momentum and confidence builds, properties in the $1.5-2.5 million range should feel the ripple effect over the next three to six months.

Buyers, increasingly, feel that we are now at the bottom of the property cycle. While few expect a sharp rebound in prices, they sense that now is a good time to get a move on with their lives and downsize, upsize, invest, get married, get divorced or  do whatever they may wish which involves a property transaction.

The lessons of history are not infallible, but if there’s to be a pattern similar to the 1990 recession, you could expect only a very gradual recovery in residential property prices. Then there were almost five years in which there was little growth before the market gathered momentum which began in 1995 and then grew for 12 years.

The message? Property is now about as cheap as it is going to get, but do not expect great capital gains in the short term. Let lifestyle, not capital gain, rule your decision.
The proviso is always to buy the right location, orientation, style, functionality and potential. It is properties possessing some or all of these attributes that will provide the best capital appreciation when the market next begins to grow.

The here and now?

Hampton and (no surprise) Bentleigh were the most active suburbs in Bayside this week: 7 from 8 and 10 from 12 respectively.

61 Orlando Street, Hampton finally sold. It went for $1.695 million, having spent months on the market at around $1.8 million.

22 Bridge Street, Hampton sold under the hammer for $1.22 million.

17 Smith Street, Hampton: $1.081 million.

7 St Kilian Street, Hampton sold privately for $1.4 million (they were asking for $1.45-1.55 million

71 Thomas Street, Hampton also sold privately, for $1.2 million.

Black Rock recorded a rare result with the auction of a three level town house, 3/366 Beach Road for $1.6 million.

Brighton was also active with 5 from 6, the standout being the auction of ?Otley? at 1 Clive Street, East Brighton. A meticulously restored grand tower Victorian on 1648 sq m, it was passed in at $2.72 million before selling later for $2.95 million.

Another Victorian, in a lesser state of refurbishment, at 130 Were Street, Brighton was about to be passed in on a vendor bid of $1.75 million when, to the auctioneer?s great relief, a hand went up at $1.8 million. The bidder had seen the property for the first time that morning and liked it enough to pay another $75,000, eventually securing the property for $1.875 million. Surprised expressions all ’round.

62 South Road, Brighton on the corner of The Avenue was described as from the “Arts and Crafts” architectural school. This quaint (and no doubt accurate) description certainly attracted the curious and several bidders moved the bidding quickly above the estimated quote of $1.15 million to a drop the hammer bid of $1.35 million.

The only auction blemish on the day was 2/5 Tennyson, Street Brighton. Passed in on a vendor bid of $1.4 million with an expectation of $1.65 million. Is there a dentist in the house?

Elsewhere in Bayside, the seldom-reported Elsternwick recorded two strong results above $1 million: 27 Oswald Street at $1.15 million, and 12 Regent Street, where several contenders pushed the bidding to an unanticipated $1.715 million.

Overseas buyers were noticeably absent in Bayside this week , but were apparently active in Toorak and Armadale. Stay tuned.

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