What’s the latest? What’s really happening?
Depends on who’s doing the reporting. Any historian in years hence, trying to make sense of what happened in this real estate market (OK, an unlikely field for any historian, but stranger things, etc…), will spend considerable time rolling on the floor laughing at all the self-interested opinion found in what then survives in media archives.
The REIV, for instance, apparently sees a “consistent” market, so all is rosy.
Not from where we stand. It looks like it’s stalled on the runway. Now the excuses of Easter and school holidays are behind us, there’s still no take-off.
[pullquote]…little more than half the volume you would normally expect.”[/pullquote]Last month? The quietest April in 10 years. At the top end little more than half the volume you would normally expect. In the inner-city, properties have been open for inspection and near-empty when last year there were queues.
Hate to say we told you so, but …
Reality has teeth and, from the chorus of howls we’re hearing, is now biting the agents, the vendors, the media analysts. Everyone but the REIV.
But should this have been so surprising? Does Melbourne real estate function in its own little vacuum? Are we unaffected by a soaring dollar and its impact on exporters and manufacturing and the concurrent departure of the Chinese to currency-friendlier shores? Are we immune to banks little-reported tightening? Is our bubble ever-expanding?
And how is a stalling market playing out where people live – or wanted to live?
There are some walking away from their 10% deposits, realising they have overpaid or finance has become unavailable. We have inspected mansions in Toorak which have been on the market for months – under-furnished, not a lamp to plug in and no funds for advertising.
So, are we about to be embraced in the clammy arms of disaster? In volume terms, it looks like it. In prices paid, less so.
Yes, overpriced vendors face disappointment and those who have paid too much may take years to recover; but for most it looks like stagnant is a flavour we’ll have to learn to love. The AAA and the truly “wow!” will continue to be exceptions (like one on a certain cliff at Portsea over Easter), but they have been and will always be exceptional.
That way madness lies. It’s when people start throwing themselves overboard.
- Mr Bennison and Mr Mackinnon? No longer at Bennison Mackinnon. They have both washed up, up the street. Try phoning Marshall White.
- Scott Paterson of Jellis Craig? Try Kay & Burton.
The new auction? Commission bidding.
The agents are desperate for listings and will do the unthinkable to get them (OK, many do the unthinkable every day, but this is unthinkable even for them – this is them playing with their own money). They’re discounting fees! They’re competing! With each other!
You’re a vendor? Start comparing what you can get at what price from different agents.
… to all the old stagers who we thought had retired and who are now picking up the phone and trying to find out where the action has gone. And we thought your future was golf.
Got a spare $30 million?
Have we got the house for you …
3 Towers Road, Toorak has come on the market with a $30 million sticker price. Please join the queue.
“The expressions of interest closes at 5pm and we’re expecting two or more parties to commit.”
Yup. Heard that. Again. And again.
Funny how the same properties are still up for sale a month or more later. Paltry offers? No offers? Oh, the joys of EOIs – all the cards are the croupiers; even when nothing is trumps.
That said, if all boxes are ticked, we’ll be there.
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Bayside: Struggletown re-defined?
No prizes for observing that the auction scene is struggling. Buyers are taking some delight in frustrating auctioneers by refusing to dance to the agents’ tunes unless there is genuine competition and the property’s price reflects the current environment.
[pullquote]… the majority of “successful” auctions have one bidder.”[/pullquote]Although a clearance rate hovering around 60% is now being put about as a balanced market by those wishing to push the auction line at all costs (REIV, anyone?), the truth is that the majority of “successful” auctions have one bidder, are passed in shy of expectations and are then the subject of protracted post-auction negotiations. This is where fun and games can and do happen and buyers must have their radar keenly tuned to prevent being worked over.
The typical auction program allows for “time on market” of a month. Now the stats are indicating that average time on market for all properties is two to three times that.
As always there are exceptions, so it is incumbent on responsible selling agents to accurately assess the suitability of their client’s property for an auction program. One size does not fit all.
[pullquote]Bayside is obviously still lamenting…”[/pullquote]Bayside is obviously still lamenting the summer it never had. With autumn quickly morphing into winter, it has been very tough on the auction front.
Beaumaris and Black Rock only managed to clear one from seven and that was down to a sale prior to auction at 6a Ray Street – $1,250,000.
Hampton and Sandringham reversed that ratio: only one passed in among the seven on offer.
- Hampton’s highest sale price on the day went to a vacant allotment at 37 Gordon Street. On 760 sq m, it sold for exactly $2 million. By reversing the address and demolishing the old house on the site, an astute vendor picked up a rather handy $400,000 extra. Nice work if you can get it.
- A townhouse overlooking Hampton Beach at 2/26 Beach Road sold – by private treaty – for $2.2 million.
- Sandringham’s highest auction price was at 7 McLauchlin Avenue where a 10 room brick house on a generous 1044 sq m sold for a more modest $1,752,000.
- 28 Sims Street, Sandringham, sold prior for $1,600,000
That said, two private sales topped Sandringham’s bill:
- A new architect-designed house on a modest 567 sq m at 14 Georgiana Street, a short walk from the Bay, was listed with an asking price of $2.2 million. It sold just shy of that at $2.15 million.
- At the other end of the spectrum, 70 Bamfield Street, a rambling 70’s house with soaring ceilings and lashings of exposed brick and timber and on an expansive 1,561 sq m sold for $2 million on the button.
Bentleigh was back to its active self with a robust clearance of 10 from 13.
- The standout was a pair of new town residences at 1A and 1B Mavho Street which sold for $1,162,500 and $1,190,000 respectively.
- The other million dollar plus transaction was the sale after of 1B Roselyn Crescent, East Bentleigh at $1,150,000.
- No cigar at 20 Carinya Road. Passed in at $1,005,000, a later offer adding $45,000 was rejected and the reserve has been posted at a lofty $1,200,000
The bulk of Brighton activity was away from the auction scene with a number of notable private sales and EOI’S.
- 15 St Ninians Road has sold following an EOI. Originally a 1930’s delight, the property has recently undergone extensive renovations and extensions and sits on just shy of 1400 sq m. Last sold 18 months ago for $8 million, the current selling agent was very tight-lipped about the outcome and would not be drawn on local whispers that the price this time was sub-$8 million and probably closer to $7 million.
- Nearby at 5 Mulgoa Street, two people expressed interest in a potential new house site. On 990 sq m, the selling price was almost $4,750 per sq m – around $4.7 million
- 130 North Road, at the Gardenvale end, has been sold for $3,250,000 following another EOI. Built by the late Bert Kaye in the early 70’s and extensively remodelled recently, the property sits on 1220 sq m. Given the main road location, this is an excellent result for the vendor.
- A related sale was at 1/7 Grantham Court, not 100 metres away. Newly built, one of three luxury townhouses designed by Edgard Pirotta, it has finally changed hands at $2,325,000
- Passed in well before Christmas last year, 54-56 Asling Street is now officially gone. The sale became unconditional recently and is recorded at $2,950,000. On 1700 sq m with two quaint brick houses with some heritage issues and with the railway over the back fence, the agent is entitled to breathe a huge sigh of relief.
In East Brighton a substantial house close to Dendy Park was passed in. The highest bid – $2,010,000 – was knocked back and the reserve is only available by speaking to the selling agent. Hard to understand why you would want to make it difficult in this market.
And, five weeks after auction, 77 Comer Street has sold at $2,380,000. Having been passed in initially at about $2,100,000 this is a sound result.
The top end in Bayside, and in Brighton in particular, is tough to very tough but it is clear that buyers are there – although not in great numbers – and that sales are being made. As noted, time on market has blown out markedly but if sellers accept the new reality and are prepared to shave in the order of 10-15% from previous expectations, we would be seeing a lift in that sector.
With a large number of auctions and private sales to clear before the winter hibernation, expect to see a further easing in prices; particularly among the big ticket items.
Back next week.
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Top end in retreat in Boroondara
Morrell and Koren’s David Morrell said the top-end market was “in a state
of flux”. “There have been no trophy homes changing hands, nothing in
the sevens… Leader News