Oct 5: It’s no Melbourne Cup

The Spring real estate racing carnival is off and running – the touts and their vendors are out in force and you can feel the excitement in the air.


But where’s the quality? At the top end, it’s as if the Melbourne Cup were being run with a country race field. Out of 10 supposedly top-enders we saw on Saturday, there’s only one we would consider.

It’s not only the expected prices, it’s the lack of good homes that work. At auctions there’s a surfeit of the over-priced ordinary, ordinary, ordinary while a number of languishing expressions of interest endeavours appear closer to gullibility tests: yes, there is some quality on offer, but at prices which suggest only fools will rush in.

Quality, especially at $2-2.5 million, is in high demand; but even in the face of a still-rising market, buyer resistance is growing when all the boxes are not ticked.

Bargains? There are some which appear so, but almost invariably for reasons which will become painfully apparent after moving in – and especially painfully when wishing to move out. Nightmares are made of this.

Meanwhile, up in the stratosphere:

  • A local identity paid $15 million for a penthouse at the Melburnian. We tips our lids. A triumph of marketing over value. (Knowing what else may have been bought for that sort of money does give us a different perspective.)
  • 2-4 Clendon Court, puzzlingly, sold before auction for $4-ish million. At around $550/foot, that’s about right. The puzzle is why, in this market, it was not taken to auction.
  • 57 Union Street, Armadale, a double-fronted Edwardian, sold to a local real estate identity for $2,360,000, suggesting everyone else must have still been on holidays.

School holiday transactions have been, as expected, mostly off-market. A pleasant surprise has been some new agents entering the field with realistic expectations and an understanding of how easy off-market transactions can be for all involved. We hope it continues.

The war. Let us mention the war.

Our victory speech remains in the drawer, but if the war on underquoting is not yet won, there have at least been some encouraging battles fought. Welcome to the fray (at last!) Consumer Affairs Victoria. Penalties are yet to be decided, but agents are at last cleaning up their acts and that’s a welcome change which works for everyone – agents included.

The crystal ball?

There are still many people wanting to buy. They’re about to be met – especially on October 24/25 – by a great many people wanting to sell. If nothing else changes, while those forces remain roughly equal, don’t expect a huge move in prices.

Nothing else may include interest rates, overseas interest, the herd instinct…

Who are you backing in the Cup?

David Morrell

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Bayside: Spring. It’s official.

The official Spring selling season is now off and running. Petty distractions such as school holidays and a football game are now behind us.

Stock levels are still relatively meagre for what is traditionally the strongest time of the year to sell. This can only extend the bull market of the past four or five months; the threat of rising interest rates is being shrugged off by buyers keen to secure a property in what is a very competitive market.

While the focus is on the number of auctions and the high clearance rates (80%+ if you can believe the REIV), the strength of the current market is most clearly demonstrated by the number of private sales taking place: around twice as many properties are sold privately as at auction.

What a difference 12 months can make.

You will not win any popularity contests by suggesting that there is a force such as gravity. The current sentiment is that the roller-coaster has left the station and you should just hold on tight and enjoy the ride.

2010? Interest rates? They’re tunnels we can’t even see. Yet.

But for this Spring, Bayside’s opening innings was … solid:

  • 24 Glenwood Avenue, Beaumaris was the highest reported auction result. A well built and finished 8-room brick veneer on 785 sq m, it sold for $1.824 million.
  • 10 Wells Road, nearby, with similar accommodation and land but not as up to date, was good buying at $1.25 million.
  • 2 Bruce Street sold privately for $1.34 million.
  • 2 Tramway Parade was passed in at auction over two months ago. It sold last week for $2.18 million.
  • 5/333 Beach Road, a stunning apartment with sweeping bay views in quietly conservative Black Rock, sold privately for $1.42 million.
  • In Brighton, a land-value sale at 8 Higinbotham Street brought $1.745 million
  • 4/9 St Ninians Court an apartment in The Golden Mile, has been sold for $2.9 million.
  • 77 Well Street New. Edgy. A townhouse with initial expections in an optimistic high $2 million. A nanosecond after 90 and 90A Male Street sold for $3.05 million each, that was upped to around $3 million. And then came a buyer with up to $5 million to spend who thought it value at $3.3 million; which was eagerly accepted. Is another new Ferrari about to burble along Brighton?s streets?

Brighton offered Bayside’s most expensive property on the day, but the only bid was the auctioneer’s. 15 Well Street is a vacant 1000 sq m allotment with approved plans and permits for 10 apartments in the high density residential precinct immediately behind Church Street. The opening and closing bid on the vendor?s behalf was $3.5 million, with pre-auction expectations closer to $4 million. Common ground will no doubt be found.

Coming up …

October 24/25. Over a thousand auctions are sheduled. Half the town will be buying, selling or watching. Unbelievable.

Damian Taylor

M&K in the News:

What time is it in your state? NEWS.com.au – “Sometimes in a movie the clock spins around 24 hours in a few seconds ? well, that’s Melbourne,” buyer’s advocate Christopher Koren from Morrell and Koren

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