Party like it’s 2008!

Along with, at last count, 384 cities around the world, Melbourne claims to be the one which can offer four seasons in a day.

That’s nothing. Look at our real estate. Changeable? We define it.

In two months the clock has been wound back two years*. It’s buyers’ time again.

What’s going on?

  • We have been predicting this change since April. The speed of its arrival is the real surprise.
  • Some agents have at last caught up with the reality. They’re adjusting prices accordingly.
  • Saturday’s Financial Review headline: “Melbourne mansions passed up” caused significant palpitations among some vendors, but those who offer quality, position and price have no reason to panic. Buyers are still there.

What’s not?

  • Enzo Raimondo of the REIV scores the Ninny of The Week Award for his observation that the weekend’s results were “good”. This is the bloke who represents the vendors. The vendors are those people you see reeling, bleeding, after watching their expensive marketing campaigns going up in smoke and their properties passed in. Nearly half of those valued at $1 million plus failed to sell. That’s good?
  • Too many agents are still living in 2010. They’re asking too much and they’re not getting it.

What’s bizarre?

  • The Weekly Review. A consortium of estate agents taking on the Melbourne Weekly so they can make the profit instead of Fairfax. They’re suggesting giddily optimistic results in the face of reality. They would, they need the advertisers. Thoughts of conflict of interest? None. Awareness of the elephant in the room that’s now dominating real estate, the internet? Apparently that can be wished away.
  • Expressions of Interest. The agents’ attempt to claw back control – especially in a declining market. “Show us your wallet and we’ll tell you … what we feel like telling you.” You won’t know who else is interested, whether there is any other interest, whether others you are told are interested are real or the products of the agent’s imagination. Don’t play. Demand to know a price, then work down. No price? Walk away.Boardroom auctions which follow EOI’s can bring real buyers face-to-face with real vendors. That’s a paddock we will happily play in. In the meantime, EOI’s are sorely in need of rules which guarantee transparency and place a time limit on vendor decisions. Are they real sellers, or just testing the market in the hope that fools will rush in?

What sold?

These had the essentials. Quality, priced fairly:

  • 23 Ferncroft Avenue, Malvern East. A modern house with a tennis court. Five bidders (five! count them!) took it to $3,560,000
  • 50 Hawthorn Grove, Hawthorn. Double fronted Victorian – they’re always in demand – four bidders. On the market at $3,030,000, sold for $3,510,000
  • 2 Carmyle Avenue, Toorak. Land value (the ultimate litmus test). Deceased estate. Two bidders. Sold for $335/sq ft. A couple of months ago, it could have raised $360/sq ft.

What didn’t?

  • 9 Kenley Court, Toorak. Contemporary 4-bedroom house with pool. AAA address. Passed in on a vendor bid $4 million. Weird, given its position.
  • 10 Moonga Road, Toorak. Passed in on a vendor bid of $3 million. No real surprise. Quality was the issue.

Whatever happened to dummy bidding?

It’s still with us. At two auctions over the weekend we saw stooges bidding against vendor bids up to just short of the reserve. Goodness. What a coincidence. If they didn’t have “dummy” stamped all over their foreheads, you might have believed they were genuine. And then an agent phones: “Our other bidder has dropped out. You can have it for less than his bid.” Really and truly.

* The wheel has turned. Here’s some advice we were offering two years ago. It’s again valid.

David Morrell

Something to say? Your comments are welcome. Click on “Comments” below.

Visit the Morrell and Koren website

Bayside: A change in the weather

The first weekend of Winter sent a chill through an already cooling Bayside market. Real bids were a rarity and vendors took centre stage.

  • Brighton and Brighton East clearance rates plunged to a blood numbing 31%. 16 auctions, 5 sales
  • Hampton and Sandringham: 35%. 14 auctions, 5 sales
  • Beaumaris and Black Rock: 50%. 10 auctions, 5 sales
  • On the brighter side of Nepean Highway, Bentleigh and its boutique neighbour McKinnon defied the odds: 76%. 21 auctions, 16 sales

How bad is it? When auctioneers are tetchy, sales agents in shock and vendors wander the their unsold halls bewildered, you can bet something is up; and it’s not sales.

The expectations of a couple of months ago are history. Sellers will need patience and then acceptance to deal sensibly when the right buyer presents. There is no point in looking back to what might have been (ask Lot’s wife).

What bucked the receeding tide?

What didn’t?

  • 103 Bay Street, Brighton. Vacant land of approx 1800 sq m. Passed in $4.5 million followed by a real bid of $4.5 million followed by disclosure of a real reserve of $5.4 million (this not a misprint!)
  • 3 Wellington Street, Brighton. Passed in at $4 million on a vendor bid after an opening real bid of $3.675 million was at first accepted and then ignored. Reserve is set at $4.1 million
  • 190 Church Street, Brighton. Passed in on a vendor bid of $3.7 million. Reserve is undisclosed but believed to be around $4 million
  • 68 Were Street, Brighton. Passed in on a vendor bid of $2.25 million. Reserve is undisclosed but mid $2 millions is the word.
  • 295 St Kilda Street, Brighton. Passed in on a vendor bid of $2.05 million. Reserve is disclosed at $2.3 million
  • 15 Kirkwood Avenue, Sandringham. Vendor bid: $2.4 million. Later offer: $2.425 million. Reserve: $2.6 million.

The price fall that started at the top end now appears to be filtering down to the mid-level in a number of suburbs where passed-in results have been common at around and even under the median price for those areas.

You’re an agent?

Break out the woollies. It will surely be a very cool winter ahead.

Damian Taylor

Something to say? Your comments are welcome. Click on “Comments” below.

Visit the Morrell and Koren website

Scroll to Top