What blizzard?

Gales and floods and crowds at auctions. Trembling temperatures and crowds at auctions. Finals footy and crowds at auctions.

Are Melburnians mad?

Our all-season sport is to crowd auctions. Now, with a market heading in all directions, it may be the only way to see who is bidding and whether the scene still has a pulse.

And so to the weather report.

1. The top end has hit the wall. Of course. You only have to look at:

1 Hopetoun Road, Toorak, quoted an ambitious $6 million plus. Opens with a vendor bid of $5.5 million. The only thing heard is the wind howling. 300 people in the crowd and 600 hands in pockets. That’s a lot of marketing money spent on hands in pockets. Passed in, but since sold well short of the original expectations.

2. The top end hasn’t missed a beat. Not one. Take a look at:

49 Harcourt Street, Hawthorn East. The whole enchilada. Opening vendor bid of $6.9 million. Two keen bidders take it to $7.16 million and it sells afterwards for $7.3 million. That is $140,000 more than the other bidder? Passion and emotion still rule.

1 Myamyn Street, Armadale. The caution lights are flashing, there’s no opening bid and a vendor bid of $2.9 million. And then two people raise their hands. It’s on the market at $3.16 million and sells for $3.215 million. All with the grace of that part of dentistry which involves pulling teeth. It went forever. On seven occasions, both bidders declared they’d gone about as far as they would go; they were out, finished. And then went further.

19 Acland Street, South Yarra – the week’s highlight. Reserve of $2.6 million, five bidders, sold for $3.6 million A million dollar bonus in this market. Another demonstration of position, position, position. Again demonstrating that the market is not dead but very property specific.

Interest under $3 million was still reasonably solid but at the very top end even the SES would have struggled to find a pulse. This is in part explained by lack of choice and is contributed to significantly by vendors whose expectations are still well above what people are prepared to pay.

What’s coming? Not a lot. Early Spring listings appear to be very thin and it may be October/November before there’s any real choice. (It is, mostly, lack of choice which appears to be preventing the market from falling off a cliff.)

Agents’ amusements

They never give up; and often it’s fun to watch. Lately we have been entertained by auctioneers making vendor bids while still working through the auction preamble (heard one, heard them all). This avoids the embarrassment of failing to get an opening bid, but doesn’t exactly fool those with $5 million or more to spend.

We have also received a copy of some delightful correspondence from a Mr Iain Carmichael of Bennison MacKinnon. If we understand him correctly, he is suggesting that after an auctioneer declares a property to be on the market the whole going once, going twice rigamarole can take place and then … the auctioneer can ask the vendor whether the property is really on the market. Our associate, Mr Taylor, has referred the practice to the REIV and it’s likely they will take action, or not (the REIV is not famous for taking action). In the meantime, Mr Carmichael has offered some useful advice on how we can improve our practices and bring them into line with his expectations of buyers’ advocates. Interesting concept. A parallel would be the prosecution advising the defence about the approach it should take. We believe the practice is wrong. We will continue to say so. And in case  you haven’t noticed, Iain, we represent buyers, not agents.

David Morrell

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Bayside. Mixed blessings.

The combination of Spring rain and football finals had surprisingly little effect on the weekend’s auction activity in Bayside. Most market segments performed reasonably well nothwithstanding the relative under-supply and mixed quality of properties on offer.

Bentleigh continues to outperform: 11 sales from 12 auctions with multiple bidders at most.

The only miss for the day was – almost as could have been predicted – at the very top end of the suburb’s price point: 3-5 Buckingham Avenue, Bentleigh. A seven room timber house but on exceptional land of 1157 sq m, it was passed in on a vendor bid of $1.5 million with a later offer reported at $1.55 million. Still some work to be done – the reserve is now set at a lofty $1.75 million.

Beaumaris and Black Rock did little – only four auctions between them

In Sandringham and Hampton it was full on – a dozen auctions conducted; seven of which sold.

The highest on the day was at 46 Thomas Street. An Edwardian weatherboard on a generous 955 sq m and an easy stroll to Hampton Street shops and train, it was quoted somewhat conservatively at $1.5-1.65 million. Not unexpected competition easily breached the quoted range and strong bidding resulted in a sale being made at $1.85 million.

Closer to the water but not quite as stunning was 60 Orlando Street. On a more typical 618 sq m, it sold for a more typical $1.355 million.

36 Villeroy Street sold privately for $1.54 million. They had been asking for $1.65 million.

Again $2 million plus is proving hard to achieve. 31 Tennyson Street, Sandringham was reported as passed in on a vendor bid of $2.3 million with a later genuine offer of $2.35 million. The reserve is still some distance away at $2.65 million.

Brighton clearances rose this week: eight sales from fourteen scheduled auctions.

A Nicholas Day designed free standing town house at 52 Martin Street was listed for auction, but a pre auction offer of $2.5 million was sufficient to secure it prior to the day.

68 Head Street, on the corner of Foote Street, and directly opposite Elsternwick Park drew the best crowd and response for the weekend and easily breached the tough $2 million auction barrier. On 713 sq m and with a comfortable 1930’s style home, five bidders competed strongly. It was declared on the market at $2 million, two bidders traded bids for another quarter of a million before it was knocked down at $2.55 million; just a whisker under the magical $300 per square foot mark ($3,162 sq m).

19 Oakwood Avenue, a contemporary house on 991 sq m, fell just shy of the $2 million mark. It sold for $1.9 million.

At first glance the buy of the day appeared to be 3 View Court, Brighton. A considerable 777 sq m in a court off the lower end of prestigious Were Street – with an admittedly unimposing two storey 1960/1970’s house – the sale price of $1.45 million still seems cheap. But it’s an awkward site, opposite the railway culvert and with a view of mostly graffiti; and so the modest price is perhaps understandable. What it really shows is how selective buyers are when you compare the relative merits of this with, say, 68 Head Street.

In this type of market the cream really does rise to the top. The rest get the crumbs.

Damian Taylor

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