With school holidays rapidly approaching, the market was geared up for a record number of houses for sale in May. Mixed messages still permeate through the market and with conferences at Federation Square on underquoting*, times are … interesting.
What is clear is that, after talking with dozens of estate agents, the common expression is that the market has gone back to “normal”, whatever that means. Over the weekend, clearance rates were below 75% and crowd numbers continue to be less than they were 12 months ago; but that is not unexpected.
Underquoting, in a “normal” market, will still come into play but it seems this time ’round that vendors have modified their price expectations a lot more quickly than they have in the past. They want to sell.
When vendor fear starts to rule, prices start to fall as vendors anticipate what waiting could cost them. We would like to take credit for predicting all this months ago, but credit for predicting the inevitable?
And so to the top end’s weekend …
Before a nicely dressed crowd of about 100, 81 Clendon Road, Toorak, was quietly passed in on an opening bid of $7.35 million. Within the hour it sold for, we believe, over $7.5 million.
Land, lots of land:
- 27 Harcourt Street, Hawthorn East, with an historical covenant, sold for $2.3 million.
- 39 Mt Ida Avenue, Hawthorn East, sold for $2.08 million
- 24 Henman Street, Hawthorn East, sold for around $2m.
Well situated land will always find buyers.
- On the Grace Park Estate, 40 Kinkora Road, Hawthorn, was passed in then sold for a whisker over $2.6 million.
- 71 The Broadway, Camberwell, sold for over $3.6 million.
- On the top of “Mount Eagle”, three people went to war over 5a Albert Jones Court, Eaglemont. It sold for $1.76 million. The adjoining block, subdivided for separate sale, was passed in and has a reserve of $1.19 million.
- 12 Chesterfield Avenue, Malvern, was passed in at $3.175 and two interested parties are currently negotiating with a sale expected to be closer to $3.25m.
Come down a notch and things became more boisterous:
- 9 Aintree Road, Glen Iris started at $1 million, had five hands waving in the air, continued past its $1.25 million reserve and sold for $1.42 million.
- 24 Evandale Road, Malvern had three bidders who pushed it to $1.21 million. It was passed in and sold shortly afterwards.
So this is “normal”. The argy bargy and to-ing and fro-ing are back, with agents now having to draw on sometimes rusted skills to negotiate conclusions.
The rest of the year? Expect more “normal”; although if suggestions that the SYD top end has eased by 10% or more, hurry up and wait may be a useful strategy.
However and but: if it’s quality, well priced, it will always sell.
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Bayside: Timing, or time in?
Wait long enough and the value of your house or investment property will increase (and, no, we’re not claiming any prizes for stating the obvious).
But timing your sale or purchase to maximise its value? That’s an exercise which can consume an ocean of your time and you can still be wide of the mark. Could you have predicted the current cycle? Would you have bought in April ’09 and sold in March ’10?
For some there’s a temptation to treat houses like investments on the stock market. Problem is, they’re not commodities which can be traded at will. While there are all kinds of signs that this is becoming a buyers’ market (interest rate rises, foreign debt crises, China’s threatened hiccups, insert next crisis here), leaping in for that reason threatens both the baby and the bathwater.
The obsession with timing too-often transcends much more important matters involving lifestyle issues of shelter, security, accommodation, family … the very reasons why a purchase or sale is being contemplated.
In the long term, your investment will be OK. In the short, stop worrying about corrections or missing the market and concentrate on buying the right property, in the right area, for the right reasons.
End of editorial.
And so to the past week.
Beaumaris and Black Rock were well and truly on Bayside’s leader board: two strong upper-end sales against the tide:
- 24-25 Beach Road, Beaumaris, a 6-bedroom multi-level house on 1255 sq m and over the road from the Bay, sold for $3.15 million.
- 26 Ebden Avenue, Black Rock, a comfortable clinker brick on a double corner site totalling 1226 sq m, sold for $2.5 million.
Hampton sold all but four out of fifteen, but mostly below $1 million. Well above that, 22 Margarita Street fell at the first fence: a vendor bid of $2.25 million and a reserve we believe to be around $2.5 million. Might have done it a couple of months ago, but … (did someone mention timing?).
Until a couple of weeks ago, 100% clearance rates were looking like a given in Bentleigh. Now, at 73%, it looks merely mortal. The weekend’s extremes:
Brighton and Brighton East had fatter choice and a thinning number of buyers. 14 sold out of 24 offered at auction, a clearance rate of 58%
The trend for upper end properties being passed in and then sold later continued, with the exception of 18 Sussex Street, a single-level thirty-something house taking up most of a generous allotment of 920 sq m in Brighton’s heartland. It sold for $3.185 million – about $3462/sq m (321/sq ft).
37 Normanby Street, a classic old Brightonian built around 1919, on over 10,000 sq ft, was passed in then sold soon after for $2.83 million.
After an EOI campaign with other agents failed to achieve a mooted $8 million, 323 St Kilda Street, on the corner of Bay Street and on the cliff’s edge of the Golden Mile, was auctioned last Saturday. Best bid was (no surprise) the auctioneer’s $5.5 million. An auctioneer’s bid placed prior to a pass-in is usually not far from what their vendor expects. Here there was a later offer of $5.7 million, which is probably not far off the achievable if the vendor really wants to sell.
“Struan” a landmark Victorian at 7 Grosvenor Street was also passed in after a real offer of $3.31 million. Discussions continue. Expect an eventual sale at around $3.5 million.
An elaborately built and finished house at 7 Maysbury Avenue – including a a lift to the third level and Bay views – was not enough to coax a bid beyond $3.2 million. The vendor’s is asking $3.35 million, surely a small gap to bridge.
91 Dendy Street also failed to excite. The excitable and energetic auctioneer’s $2.375 million was unmet. The word is that the asking price is closer to $2.6 million.
Winner of the week:
31 Middle Crescent, Brighton, a single level Victorian in comfortable condition but requiring the full rebuild/extend. It’s on 1137 sq m opposite Firbank and was bought in October last year for what the selling agents regarded as a full price: $3.2 million. Since then, the market has bounced and then hit a pot-hole, It sold last week for almost $3.7 million. That’s almost half a million dollars in seven months. Previous seller? Last seen choking on his Weeties.
*John Keating, well known real estate maverick, organised a conference at Federation Square with various agents who are for and against what we believe to be inexcusable: underquoting. Sundry media and press were there for the two hour program. Recommendations included a more pro-active REIV, publishing all auction and private sale results and trying to organise a system of quoting properties that is fair to all. Don’t hold your breath. Forums are a good idea as long as they achieve something or give the public a voice and this one was the first.
- Paul Wheeler, Former Chairman Urbis, and Life Fellow Australian Property Institute (API)
- John Keating, Keatings Real Estate
- Barry Plant, Barry Plant Real Estate
- Christopher Koren, Morrell & Koren Buyers’ Advocates
- Mark Armstrong, Property Planning Australia
- Chris Plant, President API 2008-2009
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