Toorak Tennis Court Index vs The Pundits

Morrell and Koren, the 1st buyer's advocates

Soothsayers? Oracles? Statisticians?

We’re surounded by industry experts who know exactly where the market is going. They say. Those persuaded by voodoo are reading the entrails of chickens, those around us are more likely to be pondering the droppings of neighbours’ spoodles.

And now allow us to introduce some real numbers into the equations.

Toorak has around 120 tennis courts. Ten of those are now for sale. And we know of another ten if the offer is compelling.

Does this speak to you of a market which has bottomed? Should you be reaching for your cheque book any time soon?

Didn’t think so.

So whyohwhyohwhy has there been a rush of properties to market? And why are so many of them so optimistically over-priced?

Could there be an agent or three who is over-promising? Perish the thought.

[pullquote]…  next three or four weeks will be egg-on-face time.”[/pullquote]The next three or four weeks will be egg-on-face time. That face could be ours, but we suspect those heading for the shower will be the agents and their vendors. If so, we’ll be there with some smiling buyers to hand out the face-cloths.

Why do we believe this is so? Over the past couple of weeks we have seen properties purchased at a 25% discount to the original “realistic” offers made to this office. One even went for 20% under its Council valuation. Really.

20%. Under. Its. Council. Valuation.

Kids, that just doesn’t happen in a stable or rising market.

We’re also now able to dictate terms in ways that aren’t possible when there’s a queue of buyers for a property. There are no queues; or they’re very short.

And while we’re prognosticating, here’s another: Half of the currently advertised properties at the top end will have trouble finding a buyer before Santa hurtles down the chimney.

A current concern: advertising.

There’s an axiom in adland which suggests that half the money spent is wasted, but no-one knows which half. Then why blow tens or hundreds of thousands to promote a pile in Toorak when you (you agents, that is) already know that most will not be needed because you know, or should know, who the buyers are? Just send them a bunch of flowers and an invitation and save the squillions that video cost. Yes, that video they’ll never look at.

Will there be a Wall Street protest rally on the doorsteps of agents who have over-promised and over-spent? Unlikely. But there may be some who choose not to pay for money ill-spent; and that would be educational.

Another concern? Mushrooms.

Expressions of interest campaigns. Springing up in the dark all over. Even in suburbs you’d never expect them. Significant traps for the unwary and the inexperienced. “You show me your wallet and I’ll tell you whether there’s enough in there.” There rarely is. You’re competing against the unknown, represented by an agent’s word. An agent obliged by law to extract as much as possible (and who may be among the over-promisers, so is also bound to extract the unreasonable). You’ve been bitten? You’re not alone. There are captains of industry among the walking wounded.

Time flees. Worries all

In eight weeks the lights go out and all goes quiet for summer; which means that those hoping to buy or sell must put their plans on ice until, at least, February.

Vendors, agents, buyers. They all feel it. Vendors and agents for obvious reasons, but most buyers also have reasons why they’re moving and they also frequently have time constraints.

Worry, worry, worry.

David Morrell

Fun in Bayside.

A funny thing happened last Saturday.

Your scribe arrived at 48 Cochrane Street, Brighton, a handsome double-fronted Victorian brick house with a pedigree. Comfortable as is, but with potential and on a generous corner allotment of 850 sq m.

There were (can you believe this?) a number of spectators, an audience, even … a crowd!

Then followed real bidding.

Real bidding. Just like the old days.

From 1, 2, 3, 4, 5, 6, 7 bidders! Count them!

And then the truly remarkable happened: It sold!

Above the reserve! (OK, it was under-quoted at $1.65-1.8 million and they’d already knocked back $1.85 million prior to the auction without seeing the need to change the quote, but…)

Yup. Sold for $2,015,000, suggesting that auctions may still work when the property is quality and the price is realistic.

And there the fun ended. Most other auctions in Bayside were predictably dull and even the Bentleighs only saw seven sales from its sixteen side-shows.

As noted further north, the Expressions of Interest are creeping, creeping, creeping like cane toads across the land. And should be about as welcome.

Do buyers understand this process? Most likely not.

Do buyers trust this approach? Almost definitely not.

At least an auction has a degree of transparency whereas an EOI can be like wading through murky water, never sure what might or might not be under the surface.

And then …

Some results quietly recorded over the past month or so – worthy of note and in no particular order but price.

And in the midst of the gloom we overlooked reporting that shy little Highett (next to Sandringham as you reach for the Melways) achieved its highest-ever price for a residential property: 4 Fuge Street sold for $1.45 million.

So now you know.

Back with (we live in hope) much more next week.

Damian Taylor

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Golden opportunity on the Golden Mile
Melbourne Weekly Bayside
… a price that would blow the Brighton sales record of $15.5 million out of
the water, according to Damian Taylor from buyers’ advocates Morrell and
Koren. …

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