That shrieking klaxon you can’t hear? That’s a submarine making a crash dive and keeping it very quiet.
It’s a very nice, very expensive submarine. All the bells and whistles. A top end submarine. It’s Melbourne’s top end real estate market. And now it’s diving.
Then why can’t you hear the alarm?
[pullquote]…everyone is staying quiet-as-mice lest the word gets out and there’s a rush to abandon ship.”[/pullquote]Because it’s ringing in the ears of certain agents and some hapless vendors and everyone is staying quiet-as-mice lest the word gets out and there’s a rush to abandon ship.
At risk of our loose lips sinking a few ships, we’re here to shed a little light where agents would much prefer the dark.
So what’s really happening?
In rising markets – as Melbourne experienced through much of last year – agents will shout results from the rooftops. To listen to them, you’d think they had invented money. But when the market turns? Silence.
Suddenly the prices properties sell for become state secrets. Suddenly even reserves on passed-in properties are nobody’s for the asking (which is also frequently a symptom of an agent who has promised a vendor too much; or an agent who really doesn’t have a handle on where the market might be going).
The sense we’re getting now is that some of the fundamentals are changing. We’re hearing that, other than the mining sector, it is very, very quiet out there. Banks have been tightening the screws on business lending while some businesses have been looking for emergency capital. Those are not the signs of confidence needed among buyers or sellers.
Yes, as always, top end properties which are well priced will attract attention and some will sell well (and some we’ll buy). But even the “good” news demands a close inspection.
41-43 Marne Street, South Yarra (land, which has always been our litmus test). Sold before auction for a rumoured $13 million plus. But it’s 17,500 square feet, which means it probably went for under $750 per square foot, well short of the $1000 per foot they were paying around the corner only 12 months ago.
In leafy Hawthorn, 51 Berkeley Street sold for over $7 million. Last year its asking price was $8.5 million.
25 Mary Street, St Kilda finally sold for $4.3 million; which probably about paid for all the advertising it received over the very long period it took to sell.
Next weekend? Big for the broader market but likely to offer little news at the top end. Bunnies may rule. Some could be chocolate.
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Bayside: The return of the Damian
It is good to be back at the coal face after an unexpected enforced absence (no, not as a guest of Her Majesty), and that all is well.
What is in less than rude health is a somewhwat unsteady Bayside market. More vendor bidders than hands being raised in earnest; and when the hands do go up, frequent pass-ins with sales negotiated later.
But this is 2011; on many fronts a more than interesting year with considerable challenges to confidence.
Yes, properties are selling, but frequently not at auction.
Expressions of Interest, usually reserved for only the very, very top end, are now being used for properties that in different times would be auctioned; and the number of very quiet off market sales is also increasing.
There is still a divide between vendors’ expectations and the buyers’ commit points; and it is interesting that many sellers in the upper end are holding the line on price (or at least the published price if you can get their agent to ‘fess up to it).
There’s something of a Mexican standoff between vendors who don’t have to sell and buyers who won’t lift a pen if the price isn’t right or the property is less than A-grade (and that’s also having some trickle-down effect in mid-level properties). In the words of one of the localities’ leading agents: “…a number of Brighton vendors have a seriously optimistic opinion of their property’s real worth in the current market and need a reality check or they will continue to stay as owners…”
The weekend’s auctions continued in the same vein: mainly less than enthusiastic – although sales were made but often after the event and mostly with a solitary buyer.
Brighton’s appetite for secrecy and exclusivity reach a puzzling apogee at 40 Drake Street. The marketing was the usual, the auction was not. Invitation only. Behind closed doors. Word is that one of the admitted six was interested at a whisker over $3 million and it sold later for a little more. Were there, among the uninvited, others who would have taken it higher? The vendor will never know.
At the same time, 767 sq m of the Golden Mile, 7a Dawson Avenue, was offered and passed in to the vendor’s $2.55 million bid in just five minutes. Not a lot later, a real bidder found $2.5 million was enough.
Elsewhere in the Golden Mile 29 Bay Street – a rambling but dated family house on 1174 sq m – was offered at land value. It went from being passed in at $3.55 million to a later offer of $3.7 million to an eventual sale just shy of the $4 million expected.
Across the road 32 Bay Street, on the corner of busy Street Kilda Street, 764 sq m with a residential development permit was sold before auction for a very solid $2,875,000, no doubt reflecting some added value in the permit.
Another significant development site, but without permits, was sold in recent weeks at 174 Church Street. Formerly a nursing home, the property is 2600 sq m, has rear access to Black Street and is one of the highest points in Brighton – with possible Bay and City views from future upper levels. The local whisper is that it achieved between $6.3 and $6.5 million. Expect to see a planning application board up before too long.
A sound result was achieved in well regarded Were Street where a clinker brick 1930’s dwelling on 621 sq m at Number 25 was sold at $1,545,000. At first glance this looks a modest outcome but it was somewhat effected by the immediate proximity of the railway culvert.
Elsewhere in Bayside, Hampton had a busy day with several upper-end sales.
7 Raynes Park Road saw a stunningly renovated and extended weatherboard California bungalow exceed all expectations and sell for $2,204,000, well above the quoted range of $1.8-1.95 million.
A similar quote at 29 Margarita Street, acknowledged as a superior address, was not able to produce quite the same result for a renovated 4 bedroom brick veneer home. Passed in to a lone bidder at $1.85 million, the agents managed to cover their selling fee by extracting another $25,000 from the buyer before agreement was reached.
Beaumaris and Black Rock had a quiet day with little action. 275 Beach Road was passed in on the the auctioneer’s bid of $2.1 million. That was matched by a later offer, but the vendor is waiting for $2.25 million.
Sandringham was active at the modest end, but pass-ins ruled further up the scale:
- 164 Beach Road $1.81 million, reserve undisclosed
- 1 Edward Street $1.55 million, reserve $1.65 million.
- 6 Kirkwood Avenue $1.60 million, reserve undisclosed
And then came ever-reliable Bentleigh and district. Although its clearance rate has slipped, it was still a respectable 10 from 17 offered.
Next weekend will be a severe test. Over 1000 properties are listed to be auctioned prior to the Easter break.
Along with school holidays, we suspect buyers may be taking an early break.
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