What a difference a couple of weeks can make! Yes, the worm is showing signs of turning and, no, that can’t be put down to the Head of the River, the Grand Prix, Easter and school hols around the corner or increased levels of stock.
We sense a change. To paraphrase an old ad: the market’s get up and go may have got up and gone. It’s zing no more.
How can we tell? Yes, sales results (see below) but even more than that, it’s the games agents start to play when they sense a slipping sale. When enough of them do it, that starts to look like a faltering market. Mistruths, fallacies and vivid imaginations that all add up to lies when, for example, we’re told a property has an offer and weeks later it’s still unsold. Truth will out.
Any faltering wasn’t helped by a lack of top-end properties on offer over the weekend (and let’s not forget the half a dozen or so unsold mansions that have been hanging out in the breeze like old shirts on the line for the last 3-4 months).
While most in the media (it is their job to sell papers), the REIV (we are not quite sure what their job is but they don’t seem to be helping anybody) and the agents (we all know what their job is even if some of them don’t know how to do it) are claiming buoyant, record times with high clearance rates and lots of chest thumping about what a wonderful time we’re having, if you delve a little deeper you’ll see tension and the stresses increasing.
Take a closer look at what happened at the top end over the weekend. Note the number of properties that passed in without bids. Raise an eyebrow at those that did sell while having only one bidder.
20 Montalto Avenue, Toorak, no sign of the Easter Bunny. Passed in at $3.8 million.
26 Monaro Road, Kooyong, ditto: passed in at $5.5 million (and too ambitious even in this market).
9 Fraser Street, Malvern, still no Bunny: passed in at $2.2 million.
263 Domain Road, South Yarra (unreported to REIV). Passed in.
Is there a pattern here?
Even some reported as sold did not sell at auction: 50 Avoca Street, South Yarra, was passed in at $3,050,000 and only later sold for $3,150,000.
And there’s always an exception: 7 Teringa Place, Toorak, sold for $4,105,000 to, we believe, the people next door.
Could a little logic be creeping back? Could there be cause to question the REIV’s clearance rates?
Well, yes. And well questioned they were in Marika Dobbin’s piece in this morning’s Age. One quote saysquite a lot: “… the REIV’s September quarter median for Melbourne was $470,000, compared with the Valuer-General’s at $360,000.” We don’t hear from the Valuer General until months after the event; but the VG figures include every property sold and not only those selectively reported to and published without question by the REIV.
More on this in Damian’s Bayside report below.
A helicopter view of the top end over the last nine months suggests there has been an overall rise of 20-25% In other words, serious money. But even a Year 9 economics student (we have one in-house) could tell you that can’t continue forever. The Melbourne market has been on steroids while the rest of Oz has been drifting along. We go along with the analysts who predict that will re-balance over the next six to twelve months.
Looking at what the tea leaves promise between now and Easter?
Next weekend is probably is the last chance to buy good property before the end of April as Easter, school holidays and Anzac Day loom.
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Bayside: Bubble, bubble, toil, no trouble
Accurate and timely information is readily available to buyers of a huge range of products and services in Victoria ranging from a loaf of bread to a share in The Big Australian to the price of a Holden.
But not, it seems, to the biggest and most important purchase buyers will ever make in the form of their family home or an investment property.
With buyers desperately trying to make sense of this volcanic market, this lack of transparency and ready availability of property sales data continues to frustrate and even infuriate those most in need of it.
While some agents are diligent and report their private sales and auctions, a large number of sales are either not available at the time of the sale or the report is made months later if made at all.
There is no mandatory reporting requirement and although REIV agents are encouraged to log their sales on a weekly or monthly basis by their Institute, this does not always happen. To make matters worse, agents can elect to register sale results with the REIV’s sales data collection arm but declare the result is “undisclosed” (to the public), which means potential buyers are again deprived of vital sales evidence. While all agents must be licenced, not all are REIV members. Non-members are free to do as they please.
Public auctions are public events. Their results should be reported. “Private sale” is an oxymoron. Private sales involve members of the public and in the interest of consumers being able to make accurate judgements on what they should pay for a property, the results of these sales should be reported. Not months later but on a weekly basis.
And so to this week’s events.
First a clarification of a report in this column last week. We were advised that the EOI for 14 North Road, Brighton, resulted in a sale “very close to the vendor’s price of $6 million” according to a first-hand report from the selling agent. Upon checking the actual result logged with PDOL (the REIV sales data agency), it appears the real price was $5,510,000. Almost $500,000 is a significant variance and is misleading to buyers using that sales information to assess the value of similar properties in this locale. Now we are not into naming and shaming, but a little respect for us and our clients wouldn’t go astray. NB. See above.
A sale was reported last week for 208 The Esplanade (sorry, no link) which, according to PDOL, sold for $6.6 million. It seems, however, the property transaction was dated late last year, perhaps in October. Why the delay? Timely reporting should also be mandatory. NB. See above.
Another stellar week in Bayside with 16 from 18 positive auction results reported in Bentleigh with (no surprise) prices at or over expectation.
The highest on the day was 34 Vickery Street, a six room weatherboard house on about 657 sq m. It was knocked down at $1,055,000 following a $920k-$1m price range.
Brighton had its biggest auction day of the year thus far with 26 results from a total of 29 scheduled for the day, of which 4 were sold prior.
Of those only 77 South Road was undisclosed. (OK, it went for $2.85 million.)
It appears the $5m+ market is still tough. 34 Dawson Avenue in the Golden Mile. An as-new house with all the bells and whistles, it was passed in on Sunday on a vendor bid of $7 million with a reserve of $7.4 million.
The market up to $3 million was very active:
4 Dawson Avenue, an older single level brick house on 700 sq m went for fair land value in the Golden Mile: $2.64 million; or $3770 sq m.
30 South Road, on the corner of Hoyt Street, was one of the few passed in on the day. There was only a vendor bid, however subsequent discussion led to a respectable $2.62 million sale shortly thereafter.
6 Menzies Avenue. On a corner allotment of 725 sq m, a period style house requiring serious renovation surprised all: $2.58 million.
19 and 21 Martin Street were owned by the same family but auctioned separately within 15 minutes of each other. 21 was offered first and sold for $2.375 million after brief post-auction discussions. Its neighbour, at land-value only, sold for not much less: $2.22 million.
Again illustrating the demand for house sites was the auction of 9 Keith Court. A tightly held cul de sac off The Esplanade, it’s a small site (582 sq m) with bay views but without the traffic and noise of The Esplanade. It sold for $2.3 million.
Back to the Golden Mile: 10 Kent Avenue, on just 500 sq m, sold privately only 10 months ago and struggled to reach $1.85 million. A builder will now demolish the existing house and start again, having parted with $2.15 million for the privilege.
A rare pass-in occurred at 75 Roslyn Street, a repeat performance of when it was last auctioned in 2008. Then it finally sold for $2.58 million. This time it was passed in at $2.75 million on a vendor bid. The reserve is $2.95 million.
A big family house sold at 3 Comer Street in East Brighton following determined competition from three bidders before the hammer fell at exactly $2 million.
The desire for house sites exceeded supply with four bidders bidding for 7 Letchworth Avenue, adjacent to Dendy Park, before it sold for $1,065,000.
Next weekend will be even bigger and then Easter and school holidays are upon us.
Forward estimates from agents indicate not much in the way of new stock after that, but that’s what they always say.
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