The big weekend!
The Melbourne Cup of auctions!
The biggest of the year!
The bidders are at the barriers!
The lights are flashing!
They’re off! Or not!
It was a weekend with plenty of !s.
Big bets from both buyers and sellers, but not every one a winner.
Especially at the top end, and even over a weekend where bidders were five and eight deep, there were those who completely missed the start.
Buyers crowded little gems – it was very property-specific and in some cases postcode-specific – and contrasted with a heap of vendors who had been imbibing something euphoric in the lead-up to this “can’t fail” weekend and then had to deal with some vicious hangovers.
Toorak: five out of the twelve properties offered were passed in.
Hawthorn and Malvern: practically everything sold (five at over $2 million).
Malvern East: disaster; many high-profile properties still waiting for a bid.
Kew: little quality, little interest.
There is a trend, and it’s a healthy one. Buyers are becoming more discerning and more patient. That was well ilustrated during the week when 2a Como Avenue sold for $3,990,000 (over $500/sq ft) against $3,350,000 reserve. While $600,000 will come in handy for Christmas presents, what is most notable is that there were five people who were all making serious bids – and three of those were under-bidders 12 months ago for similar land in the same street.
Why are they waiting? Why land? It is frustration mainly. We spoke to each of the under-bidders and their reasons for chasing the block was they could not find anything of quality to buy and they believe it will be easier to start with a plain envelope than to try to retrieve a troubled floor plan. That’s a trend that we have noticed over the last three months; particularly among segments of the Chinese community in the Boroondara area.
The other end of that scale is equally weighted. When a property is all ready – everything done and all that’s needed is to move the furniture in – people will pay a premium to save the 18 months of angst of building or significant renovation. To them that’s worth an additional 10 to 20%. (And a lot of builders must now be kicking themselves that their crystal balls didn’t show that 12 months ago.)
Super Saturday’s standout result was 20 Callantina Road, Hawthorn which sold for an impressive $6,125,000 against an early $5 million expectation. Five bidders went hammer and tongs for this classic Scotch Hill home. It’s a house we know well: we bought it for the current vendor only a few years ago for … $2,350,000.
So much for the hits. As notable were some notable misses:
- 6 Cross Street, Toorak passed in at $4,020,000 reserve $4,500,000
- 36 Heyington Place, Toorak received a vendor bid of $2,800,000, reserve $3,000,000, and offered a demonstration that deceased estates don’t always sell.
- 29 Washington Street, Toorak vendor bid $2,750,000 reserve $3,000,000 – pricing euphoric, hangover persistant (see above).
- 30 Park Place, South Yarra passed in at $3,220,000, reserve is $3,500,000. Feel the pain.
East Malvern. At the top end a bomb could have gone off and no-one would have noticed.
- 61 Kerferd Street, big, big advertising budget, lots of bells, lots of whistles but not a lot of bedroom accommodation. Scraped up a vendor bid of $2.9 million. Reserve? $3.5 million. Yes. Right.
- 74 Central Park Road. Nice address. The vendor bids $2.6 million and the reserve is $3.1 million? We’ll have what they’re having.
There’s a great divide widening between the top end and the rest. The top end, increasingly, is being driven by quality real estate. The hype isn’t working any more. People are prepared to say thanks but no thanks when, at the other end of the market, there’s simple desperation to buy something, anything, before prices take another leap.
Yes, Super Saturday demonstrated that this is as strong as market as it has been for 30 years; but that does not mean it has become completely irrational.
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Bayside: Hit, miss, hit, miss, hit…
With the now-to-be-expected exception of the Bentleigh area, the sheer volume of property offered over weekend has at least temporarily overwhelmed the market, leaving many bruised vendors still waiting for buyers – yet those who did sell generally attracted several bidders and a number of sound to outstanding results ensued.
Brighton and Brighton East were awash with auction flags and boards (37 auctions were scheduled), but the clearance rate was down, down down at 58%.
The majority of those passed in did so on vendor bids and only one or two attracted limp later offers. Even so, the mail is that some of those reported later offers were a trifle fanciful. Figmants. Imagination. Little hopes given wings. Gosh, how unexpected.
19 Chatsworth Avenue, the highest price on the day was a side-by-side townhouse near the beach. Last sold in December, 2008 for a price close to $2.5 million, renewed buyer confidence saw bidding rise to $2.95 million before the hammer was dropped.
32 St Andrews Street sold for $2.45 million. A period style front half attached to a challenging 70?s style back half didn?t deter buyers who obviously valued the central location close to Church Street and the large allotment: 1037 sq m.
3 Horton Close was a magnet for new home builders and developers. There’s a comfortable single-level house on 650 sq m (with a 70 ft frontage), just off Head Street and adjacent to Head Street park and reserve. It sold for a record price – almost $300 per sq ft. – a serious $2.055 million, at least $200,000 more than reasonably expected. (Six months ago you couldn?t give land away, now it’s selling like it’s not being made any more.)
5 Manor Street, a good street one back from Dendy beach. A rear single-level 80?s style townhouse, it has unusually large land (650 sq m including the driveway) and redevelopment or rebuilding potential. Several interested parties pushed it to $1,705,000.
A number of substantial Brighton properties failed to fire; which raises the question: in a runaway market, what is true value?
52 Black Street is a well renovated and extended Edwardian house on decent land (10,000 sq ft). Some might say it is positioned at ?the other end? of Black Street, but it is still a fine home. Quoted at $3.3 million+, the auction was a disappointment with only a vendor bid of $3.3 million to be heard. The reserve has not been published but is likely to be around $3.5 million.
127 New Street. A well presented period house on 1175 sq m with plenty of living and bedroom spaces. Its location on the corner of Dendy Street, opposite the railway crossing, was always going to be difficult to overcome and at this stage buyers are keeping their hands in their pockets. It was passed in on a vendor bid of $2.4 million and although the reserve has not yet been made public, the house was originally quoted at up to $2.65 million.
20 Asling Street. Another well renovated and extended Edwardian house – on almost 900 sq m – it also failed to sell on the day. A vendor bid of $2.6 million against a reserve of $2.9 million. Not everyone, it seems, loves a railway line at the bottom of the garden.
Lesson for the day? Positions matter, they can be compromised and their prices should reflect that.
74 Halifax Street – brand new, on 650 sq m – passed in on a vendor bid of $2.35 million against a reserve of $2.6 million.
Two noteworthy sold prior properties were at
41 Wilson Street sold prior for $1.905 million.
784 Hampton Street, a town house on the corner of Camperdown Street, sold prior for a little over $1.25 million.
Brighton East. 12 starters, 7 wins, 5 still to finish.
54 Shasta Avenue, a site of 1200 sq m at a permit for three townhouses was knocked down at $1.7 million.
3 Curzon Street – shades of Tuscany – sold for an expected $1.67 million.
20 Edro Avenue, a site of 708 sq m, sold for $1,305,000 against a quoted range of $950,000-$1,045,000 (more ! – quoting mayhem is still alive and well).
6 Studley Road – quoted at $1.175-1.29 million, sold under the hammer for $1.25 million. Quoting faith restored (!)
21 Primrose Crescent is a substantial 5-bedroom house with ample living areas, but maybe a touch too close to Nepean Highway. It passed in on a vendor bid of $1.5 million with a genuine $1.525 million offered later against a reserve of $1.625 million.
7 Noel Street. With a reserve of $1.29 million, the best it could do on the day was a vendor bid of $1.225 million.
Beaumaris and Black Rock had a mixed day with almost equal numbers sold prior, sold on the day and passed in. Nothing was sold at auction over one million and in fact 15 Iluka Street, Black Rock was passed in at $1.7 million. Its asking price is now set at $1.795 million.
Hampton fared better: all but one of the eight scheduled auctions selling.
16 Tennyson Street, Sandringham, a brick home on generous land of 1022 sq m, reached $1,861,000 after being estimated at $1.6-1.7 million.
Next weekend stretches to four days and not a lot of real estate action. Agents will be taking a breather or trying to tie up their swags of passed-in properties. We, as usual, will be ready to take your calls.
M&K in the News:
Plenty of stock for Melbourne auctions – The Australian Financial Review Oct 26 (subscription required) There were aspects of Melbourne’s market “which made it as active as any time in the past 25 years”, buyers’ agent David Morrell said…
Depth of demand at biggest auction weekend – The Age Businessday, Oct 26 – ”It’s not as heady as it seems,” said buyer’s advocate David Morrell, of Morrell and Koren. ”It’s very property-specific and even some deceased estates are being passed in.”
Rate rise tipped after ‘hot’ auctions – The Age – Oct 25 – ”It was as hot and determined a market as I’ve seen in my 28 years in real estate,” said Christopher Koren, director of buyers’ advocacy group Morrell …
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