Kids, the market has turned.
OK, you know that, we know that, but somebody really should tell the estate agents. They‘re still acting as if the boom rolls on.
Their hope, it seems, is that if they don’t publish their poor results, reality will just go away, the Spring market will bounce back and all will proceed as last year. Problem is, a lot of them seem to believe their own hype.
We?re seeing real pain out there, particularly in the $3-4 million bracket, which has copped a belting. (That said, after the September school holidays – when the market typically takes a 3rd quarter break as well – their prospects should look up.)
That?s the real news, but only the better agents are telling it.
Then how is the top end?
AAA is still flying but very thin and becoming thinner. Most below it are stalling badly.
23 Irving Road, Toorak. A block of land in a great street with a reserve of $3.8 million. Six bidders pushed it to $4,805,000. Even by last year?s standards, that one is out there.
Then (for the agents) the bad news. Good homes which attracted no bids. Over the weekend, even houses right in the Scotch mafia catchment area had no joy.
3 Fairview Street, Hawthorn a good family home on 13,000 square feet. A vendor bid of $3,575,000 and not a finger raised. Now offered privately at $3,495,000
51 Lansell Road, Toorak attracted only a vendor bid (and wasn’t reported).
1 Dunraven Avenue, Toorak was killed by a vendor bid of $3.8 million. Pardon? Are you serious? We might have believed a vendor bid of $3 million, but clearly the owner is not listening to the market. (Maybe they were influenced by another buyers’ advocate suggesting that $4 million was “about right”.)
Those who did sell generally sold well below vendors‘ and agents‘ expectations; but proved the point that a market is still there if the price is attractive.
63 Kensington Road, South Yarra sold for $4,525,000. It was bought last year for $4.3 million. Deduct Stamp Duty and selling costs and you’ll find a vendor crying all the way to the bank.
3 Woodmason Street, Malvern sold for $2.3 million against a quote of $2.5 million.
6 Hampden Road, Armadale passed in at $2,420,000 and sold later for $2.5 million; well short of the $2.8 million the owners were expecting.
And then …
79 Addison Street, Elwood. Multiple bidders and still passed in, but the owner was prepared to back his judgement and the property sold a little later for $2.62 million. One of the gutsiest calls by an owner this year. (It’s been reported as sold at auction for an undisclosed price – underlining again the accuracy you can expect to find in auction results.)
Bayside. Reality Kicks In … ?
With 10 sales from 15 scheduled in Brighton for the weekend, at first glance a 66% clearance rate looks considerably better than the poor results of only a few weeks ago.
But then consider that 6 auctions scheduled were sold before and the actual clearance rate on the day falls to 4 from 9 offered, giving a more modest 44% success rate.
Apparently vendors prepared to deal with realistic offers pre-auction have got the message that 2008 values are not what they were in 2007.
The healthy number (10) of private sales negotiated in Brighton and Brighton East during the week further indicates that buyers will commit when the right property is offered at today’s (not last year’s) price levels.
And any property that is essentially a land sale is being marked down by 10% to 15% on last year’s price and that reflects the considerable jump in the cost of building and the extended approval and build time required.
155 Were Street, Brighton and 9 Dudley Street, Brighton fall into this category. The former sold in better times for over $1.7 million and was passed at $1.56 million in over the weekend. The latter, in the heart of The Golden Mile, didn’t get a real bid.
There was a happier vendor at a smart new town house on only 510 sq m at 112 Male Street. $2,050,000 bought it.
1A Wellington Street, Brighton, a 1930’s style home on about 800 sq m, sold before auction for $3 million.
A private sale was negotiated at 14 Chatsworth Avenue in The Golden Mile for $3.25 million.
On the other side of Nepean Highway, in Brighton East, 4 Lockwood Avenue sold for $1.79 million
Elwood had a mixed day.
A sold sticker finally found its way onto 33 Ormond Esplanade a two storey unrenovated house on a double allotment of 1500 sq m. $4.6 million was the result.
17 Beach Avenue is a well renovated 8 room house on 758 sq m. The auctioneer was the sole bidder and passed the property in at $2.6 million but was coy about the reserve. Maybe he didn’t like what he heard.
The final notable result was the auction of 13 Le Fevre Street, Sandringham a rendered 6 bedroom modern house on about 700 sq m. Sold for $2.23 million.
Lesson for today? (and yesterday, and tomorrow, and next week, etc): well located homes with the right accommodation and in near new or well renovated condition will sell provided the vendor expectations are not over the top.
Rocket science? Not exactly.