Nov 9: Weather report.

Hot: Birdcage, Flemington.

Not: The top end.

While the REIV trumpets 80% + clearance rates, up here at the top end it is, as usual, a different story. The weekend at the top had all the thrill of a Britney Spears concert, complete with auctioneers struggling to lip-sync against a considerable number of walk-outs.

Looking for sales above $4 million? You’d have as much luck as David Hayes did in the Cup. But then the field was hardly inspiring.

However …

Over the next couple of weeks, the quality on offer undergoes a radical change. In over 30 years, we have never seen as many six-star properties (today above $10 million) being offered publicly. In Toorak alone, there are 40 houses for sale this week.

But …

Are there 40 buyers waiting in the wings? We suspect not. We also have reason to believe that there are more than a few vendors who have baited some very expensive hooks in the hope of cashing in on interest from mainland China. They could be waiting a long time; when the dollar moved over 90¢, the Chinese desire to buy moved the other way. For how long remains a question, there’s still strong interest in Hawthorn and Kew, but their needs are very specific and don’t spread to the market as a whole.

There’s also some misalignment of vendor expectations and people’s willingness to meet them. All the “good” news about clearance rates has persuaded some to add 20% or more to what we think is realistic; in the increasingly forlorn hope that anything is possible.

Sorry kids, with few exceptions, the top end is more astute than that. Read these tea leaves:

And then …

Suddenly farms and discretionary weekenders are popping up like mushrooms. We have never seen such exotica. Truth is, many buy the dream and then discover the maintenance is endless and the time spent there is less than expected. There always seems to be one reason or another to spend the weekend in the city.

And a wise client said …

“Yes, there is more confidence in the economy than there was four or five months ago, but confidence comes in different forms. Take a look at the cranes on the horizon and that will give you a fair idea of what to expect over the next six months.”

So we did. Quite a lot of cranes about; especially around Hawthorn.

David Morrell

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Bayside: Bewildered by choice?

With, effectively, only six weeks before the Christmas break, it was apparent from the size of The Age?s Domain property section that late-season sellers finally have their skates on.

However, on the back of a lift in listing numbers and another rise in official interest rates, there are some early signs of caution on the part of buyers.

The “sold before” auction numbers are up, suggesting that some savvy vendors can recognise a sensible offer when they see one. This against background of recent experience of properties passed in without a bid, some with later bids that still did not meet vendors’ expectation. (A vendor who is ahead of a market which is showing signs of reaching a plateau can find it very lonely up there.)

But still (this is real estate) there’s the odd result that continues to surprise: 138 Bay Street, Brighton. The agents expected around $1 million for this one-of-a-pair on a busy part of Bay Street. Strong bidding from some heavy hitters pushed it to $1.31 million before the bemused auctioneer finally dropped the hammer.

An hour or so later, that same auctioneer was left scratching his head at 32 Cosham Street. It’s a typical 1930?s-style Brighton house in a top Brighton street on a generous (1038 sq m) site. The request for an opening bid was met with stony silence and the property was passed in on the auctioneer?s bid of $2.8 million; with the vendor expecting a hefty $3.2 million.

A very similar property at 31 Middle Crescent, but on 1145 sq m, was sold at auction over the previous long weekend for $3.2 million, so lack of interest in Cosham Street suggests that market may have been satisfied.

Also no action at 7 Haileybury Street, a 1930?s attic-style house on about 600 sq m and only a five iron to Hampton beach. It was passed in on the auctioneer’s one and only bid of $1.6 million. The reserve, although undisclosed, is believed to be closer to $1.8 million and at that level you can expect this to be for sale for a while yet.

6 Grosvenor Street, a single level house in reasonable order and on 960 sq m, sold prior to auction at land value only: $2.8 million. In neighbouring Young Street, number 4 – on 830 sq m – also sold (privately) at land value: exactly $2 million.

41 Martin Street, a near-new architect-designed house close to the foreshore and Head Street park, sold privately for $3 million. The expectation was $3.3 million+

The most noteworthy sale of the past week was an expressions of interest transaction at 15 St Ninians Road in The Golden Mile. Recently extensively refurbished and extended – and on 1300 sq m – the property was sold to a neighbour for a price believed to be just over $8 million.

Due to be auctioned over the weekend and in fact sold the week before was a brand new Tuscan (with not-very-Tuscan basemant parking and theatre) at 13 Plunkett Street, Brighton East. It was snapped up on a very short settlement for a price believed to be close to $2.725 million.

Not so successful was Sunday’s auction held in the very next street: 13 Curzon Street – again a brand new house but without the added appeal of basement parking – struggled to attract much interest and was passed in on the auctioneer?s bid of $2.65 million. This was matched later by a real offer of the same amount but was rejected in favour of the vendor?s reserve of a lofty $2.8 million.

Expressions-of-interest racked up a couple of Brighton East sales: 122 Dendy Street: $2.25 million. 53B Glencairn Avenue, a stylish new town house: $1.85 million.

Beaumaris saw the auction of a prime corner allotment at 29 Beach Road. While 1045 sq m presents a lot of possibilities, it had no bidders on the day and is now being offered at $2.5 million

Bentleigh continues to be a litmus test for the mood of the Bayside market just back from the Bay. After months of 100% auction clearances, buyers are now showing some restraint: the weekend clearance rate dipped to a more modest 75%. Interest rate rises are starting to be felt and with the prospect of several more in the next six to twelve months, expect to see Bentleigh?s star somewhat dimmer.

The highest price paid during the week in Bentleigh was the prior-to-auction sale of 29 Wright Street: $1.2 million.

Damian Taylor

M&K in the news:

Footy rivals join forces to sell mansion – WAtoday – South Yarra buyers’ advocate David Morrell said the original asking price of $26 million for Avon Court was now reduced to about $17-18 million. …

Hawthorn home yours for just $16 million – Leader News – Buyers advocate David Morrell, of Morrell and Koren, said five Hawthorn properties sold for more than $2 million in the last weekend of October…

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