Sept 14: Statistics? Think of a number

Last weekend, according to the REIV, “… was one of the strongest auction weekends this year…”. They reported 707 auctions and a clearance rate of 83%

Wait a day and Australian Property Monitors reports that the market is losing steam, Melbourne properties sold were down 43% and a clearance rate of 73.7%

No wonder the people we meet can’t tell what’s really happening.

Our view of the top end? Last weekend saw some trees blow over the train tracks. Nothing derailed, but there were some almighty thumps.

Signs of (welcome) caution:

8 Verdant Avenue, Toorak. A good Gillespie townhouse in need of a tidy up, but it still ticked a lot of boxes. Many in the real estate fraternity thought it had the potential to reinvent the Richter scale; a bidders’ bloodbath was forecast. The auction got underway with a vendor bid of $2.8 million and six serious bidders. And then … And then the auctioneer started calling for rises of just $10,000 and sucked the life out of his own show. It stalled at $3 million, then struggled on to sell at $3,305,000. A month ago it would have screamed past $3.5 million. Are we witnessing an outbreak of sense?

6 Kensington Road, South Yarra, a renovated Victorian on 10,000 sq ft and, yes, it has some overlooking issues. But where were the crowds? Where was the energy? It limped to $3,860,000 with bids as painful as tooth extractions, then sold later for a shade over $4 million.

And some OK results. Not the runaways of past weeks, more value buying:

And then there is The China Syndrome. The notion that when a US nuclear reactor melts down, it will burn its way right through the earth and eventually emerge in China.

Our China Syndrome is home-delivered. There is now significant Asian buyer interest in top-end Melbourne houses; both at auctions and in off-market sales. Why? As one client suggested: “Because Australia has become Asia’s Switzerland and Melbourne, not Sydney, is Lake Geneva.” It’s a trend which has been emerging, particularly in Boroondara and Stonnington; with particular interest in new houses or land close to good schools – there’s not much appetite for period homes.

While the enthusiasm is encouraging, it can overlook current prices or comparable sales. We have been known to advise caution.

And now we enter … interesting times.

School holidays loom, there’s the football finals and the Cup Carnival to come and a big (and testing) weekend ahead. Within all that, we expect a lot more properties to be coming to market and a possible cooling effect.

More choice at more reasonable prices? We live in hope.

David Morrell

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Bayside: $1 million +

The return of the Damian is nigh. In the meantime…

79 Cromer Road sold at $1,070,000
4 Powys Drive sold at $1,060,000

Black Rock
13 College Grove sold at $1,310,000

2 Byron Street sold at $1,950,000
25 Orchard Street sold at $1,035,0000
44 New Street passed in, vendor bid $1,600,000, reserve $1,770,000

Brighton East
8 Killeen Avenue sold at $1,150,000
19 Melosa Avenue sold at $1,200,000
13 Primrose Crescent sold at $1,070,000
6 Sunlight Crescent sold prior for $1,410,000

103 Mitford Street sold at $1,300,000

12 Edinburgh Street sold at $1,560,000
83 Linacre Road sold at $1,285,000
50 Service Street sold at $2,200,000

M&K in the news:

Melbourne market loses zing The Australian Financial Review (subscription required) – The total number of properties sold over the weekend in Melbourne was down 43 per cent from the week before. Top-end buyers’ advocate David Morrell said Melbourne’s residential market might have peaked…

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

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