There’s no ‘one’ market; and no single influence that decides it. At times it seems every property writes its own rules. So, herewith some trends we’re seeing:
- it’s taking longer to do the deal – yes, price is still the usual sticking point (some agents are still living 10% and more above reality) and there are continuing hopes of the magical appearance of Chinese buyers who with unlimited money and insatiable desire. The reality is closer to – maybe – the one local with both capital and interest in that specific property.
- agents’ shop windows are often for appearances – the tired old listings they’ve had for up to a year mostly, as far as we can tell, to suggest they have a lot to offer. Stale bread. And ditto cashflow.
- the rise of The Web (cont’d) – web-only marketing is on the rise, rise, rise. Vendors (rightly, in our view) see little value in spending their hard-earned in print media. There’s little to lose by initially testing buyer interest via the web.
- the truth about ex-pats – there’s no Great Rush Home (how do we we know? We spent much of last week in Asia). Some will return for personal or professional reasons, but few are interested in buying before they return – they’re paid in US dollars and they believe the AUD has further to fall.
- you’re my agent/no you’re not – we saw a house last week that ticked every box, including price. We were the first through and it was slaps on backs and handshakes all ’round. 15 minutes after getting back to the office, the phone: “We’ve got a great house for you. Best I’ve seen all year.” Different agent, same house.
- the top is not rising – there may be rises in lower climes, but they’re yet to reach the top. Even at $2.5 million plus, last Saturday’s auctions saw mostly pass-ins. That is not a market which is out of control. We’re still prescribing patience.
Bayside: Not waiting for Spring
The official start of the Spring property sales season is still weeks away, but try telling buyers that. The weekend’s clearance of 75%+ comes on top of a steady climb. Cautious optimism is turning to desire to act, supported by a number of factors:
- interest rates are near the floor
- at lower price points, investors are active
- at lower price points so are first-home buyers (and their parents)
- equities are frustrating
- term deposits are nowhere
- self-managed super funds are gearing into property
- boomers are retiring and downsizing
- ex-boomer family homes are becoming available for upsizers
Villa units seem the flavour of the month and well presented one or two bedroom apartments (AKA flats) in smaller older style blocks are also selling.
The only area that has not yet shown much sign of recovery, at least in Bayside, is the top. Sales over $5 million are very few and far between.
Down a notch – from the high three millions to the mid-fours – the market in Brighton has been underpinned by a number of sales to mainland Chinese buyers.
- 50 William Street, bought quite well at just over $1.9 million
- 9 Dawson Avenue, negotiated post-auction at around $4 million
- 40 North Road, also post-auction, around $4.5 million
Low interest rates and a favourable exchange rate are unlikely to be influencing these sales. It is more likely to be, as one agent put it: “The Rainy Day Syndrome” – somewhere safe to invest.
Locals were more in evidence – albeit quietly – in a couple of off-market sales of high-end apartments at two separate addresses in Glyndon Avenue. Each sold for around $4 million and each had at least one disappointed would-be buyer; which is an indication of the emerging depth of the downsizers at the top end.
Down another notch:
- 9 Lindsay Street sold for $2,725,000
- 42A Cole Street sold for (we heard) about $2,200,000
- 164 Were Street was passed in and had a later offer of $2.02 million which fell well short of the $2.4 million the vendor is chasing. And a good time was wasted by all.
- 40 Lynch Crescent was passed in to the vendor’s bid of $1.6 million, which is a big stretch to the $1.875 million reserve.
Down still more notches:
- 4/176 Church Street, Brighton. Well located, well maintained villa unit group, “well” quoted at high-fives/low-sixes and with potential but needing a heap of work. The quote worked – maybe 150 people came. Bidding broke out after the auctioneer said his last would be at $600,000 and it sold for $792,000. “Good time to sell a villa,” was heard. Good time to hold onto one, too. They don’t make them any more.
Brighton East? Mixed.
21 Letchworth Avenue was the highest on the day. A new family house, it sold for $1.77 million.
It’s in an area immediately South of the vast Dendy Park which was once shunned by buyers and is now experiencing a transformation as home builders are bulldozing old and modest commission houses.
Prices of new and near new properties are regularly in the vicinity of $2 million, with one almost topping $2.5 million a few months ago.
To a lesser degree, something similar is happening immediately over South Road into the edge of Hampton.
So, what to expect in the next few months?
The reputable agents that we talk to regularly tell us that the phones are starting to ring and plans are being laid, however some sellers are holding off pulling the trigger until after the 7th September.
If that is so, then we can expect a very busy three months starting in October.
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