Sept 1. Spring is sprung (a leak?)

Spring is sprung, the grass is riz. And if you listen to the agents, there’s about to be a re-play of last year’s Spring boom.

Reality check:

  • Unique AAA properties are still being bought, with some very competitive bidding.
  • Anything less is anybody’s guess, but the trend is down, down, down.

Mid-range, too many vendors are still holding out for too much (the Fairy Godmother has left the stage) and down among the C-graders the silence is mostly broken only by vendor bids.

And people who are holding out for too much really aren’t in the market at all.

In spite of what’s happening globally and even in Sydney, Melbourne’s top end is still firm. This may be partly explained by capital gains tax laws exempting the principal residence (which doesn’t explain SYD) or, maybe, Melburnians’ more conservative approach to investment and being prepared to take the long-term view providing the fundamentals (position, position, position, etc) are right.

And so to the weekend …

A couple of vendors kicked goals and patience has paid at 8 Denham Place in Toorak: offered for a third time by the third agent in a row and sold quickly for $4,150,000.

The highlight: 32 Grange Road, Toorak 10,000 square feet. Multiple bidders, including some of the first developers we have seen for a long time. Sold for $4,150,000

The lowlight: 8 Avoca Street, South Yarra Quoted at $3.3 million plus. An opening bid of $2.75 million was knocked back. Another bid of $3.3 million was also knocked back (pardon? that was right on the quote). And then came an inspired knock-out bid: $3.7 million. Whose bid? The vendor’s! Excellent tactic. Your subscription to Timewasters Anonymous is in the mail.

1A Nareeb Court, Toorak Another vendor bid: $3,025,000 A reserve of $3.5 million. Twain don’t meet. Vendor in pain.

20 Jolimont Terrace, East Melbourne Vendor bid: $2,150,000 Reserve: $2.5 million. More ouch.

38 Heyington Place, Toorak Nil result.

One of the most inspected houses in months, 55 Kinkora Road, Hawthorn, quoted at $4 million+ was passed in at $3.85 million to a lone bidder who went on to pay $4.3 million. He must have really, really wanted it. If he had waited a week that could have been a different story.

131 Chomley Street, Prahran A blast from the past (last year). Seven bidders. 20% over the odds. There’s not a lot of that around any more.

And some signs of some common sense:

207A Kooyong Road, Toorak sold before auction for $3,650,000
21 Brookville Road, Toorak sold prior for $1,270,000 against a $1 million quote.

    Reading between the lines suggests there was only one prospect for each, the agents knew it and chose to deal privately rather than go to a disappointing auction.

    Next weekend? The real estate Grand Final.

    There will be a lot running onto the ground, but the feeling we get from the agents is that there will be post-match tears in the dressing rooms.


    Bayside makes dizzying leap from abysmal to averageVisit the Morrell and Koren website

    At least it’s an improvement.

    Following last week’s dismal auction clearance rate, Bayside bounced back to somewhere near the metropolitan average of a tad under 60%.

    Buyers and sellers may well be asking themselves if there is there a dead cat bouncing or whether this “recovery” is the real deal.

    Listen to the agents and you’ll hear only about the world having turned and our joyous entry into the land of buying opportunities. Nary a cloud in that sky.

    For vendors wanting or needing to cash in, the next few weeks will be a testing time for the nail-biters while savvy buyers will find some gems (we know they’re there); providing they stick to their principles and buy value.

    Last week we spoke of the difficulties many buyers have in making sense of the mixed messages being sent by some agents regarding price expectations. This provoked a not-unexpected response from wounded agents who pleaded “acting under instructions”. Their vendors would probably claim they were acting under advice. In most cases, we’re inclined to believe the vendors.

    Brighton was considerably busier this week: 17 auctions scheduled, 10 sold.

    10 Campbell Street, a 5 room brick house on 635 square metres sold for $1,445,000 (about $210/ft in the old language) whereas 8 Kilrush Street, a 7 room brick house on 669 square metres was passed in on a solitary (genuine!) bid of $1,510,000 (also $210/sq ft) but with a reserve of $1,750,000. Both properties were generally regarded as land value only. Oddly, the reported result for Kilrush Street stated it was passed in on a vendor bid of $1,550,000 with  later offer of $1,600,000. With land and property prices having come off last year’s high by 10-15%, the offer at auction of $1,510,000 may not be that far away and the reported later offer of $1.6 million should seal it.

    The cost of building new one-off houses in Brighton has spiked by more than 30% in the last year. Something has to give and that has to be quality or the prices paid for land.

    On the private sale front, in an apartment complex under construction by Wave Properties on the corner of Outer Crescent and Cochrane Street, four presales ranging from $886,500 to $1,669,000 were reported.

    Hampton was busy: 11 auctions, 6 sold. 16 Crisp Street for $1.2 million.

    16 Ocean Street passed in with no bids and a reserve of $1.53 million. 34 Mills Street was passed in at $1.8 million against a reserve of $2.2 million. Bridging that gap will take a lot of work.

    Bentleigh had a quieter week by its recent standards with four sales from six auctions and less than a handful of private sales. However a very busy Spring is anticipated with agents reporting healthy forward stock lists.

    Next weekend brings the first of the Spring auction offerings and the first week of AFL finals. It will be interesting to see which takes top billing.

    Stay tuned.

    Visit the Morrell and Koren website


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