17 March 2018
After a small break, and with only one auction weekend left now until Easter, Saturday saw a similar number of auctions as the same weekend last year. However, a noticeable difference was evident in the clearance rate: 68% this week compared with 79% 12 months ago.
Of note, just over half of the homes that did not sell passed in on a vendor bid, suggesting buyers had no interest in the property at that price level.
We don’t think the market has faulted to that extent. It is more likely the combination of negative media hype, the continuing impact APRA is having on bank lending criteria, some vendors’ belief that their property should just be worth more and the agents’ attempts to accurately quote properties contributing to some of the results we are seeing.
If we look at properties that have been accurately quoted, the changes have probably highlighted how an ‘A’ grade property can achieve even stronger results compared with some that have seen limited inspections and/or no bidding.
It is often said that history repeats itself, so it was interesting to see 56a Dendy Street Brighton, which sold very strongly back in October 2013 with eight bidders for $2,272,000, pass in on a vendor bid. It could be fair to suggest that at certain price points buyer discernment for items such as garaging, privacy, overlays, zoning and road quality impact their decisions to pursue a sale.
At certain price points, particularly within strong demand suburbs, less-than-ideal properties have the potential to attract greater interest as the home provides an entry point opportunity to enter the suburb. However, strong interest at a certain price point doesn’t necessarily suggest that the property will grow at the same rate as other homes in the area and continue to attract the same interest as prices increase.
It is important for buyers to understand all the strengths and weaknesses of the property they are interested in, how it will work for them both financially and emotionally, and take into consideration how many other buyers might be looking for the same thing at certain price levels.
We believe that nearly every property should have a stop level, regardless of a buyer’s financial capacity. Knowing where these points are and why can help avoid surprises down the track if deciding to sell, renovate or re-build, trade-up or trade-down.
- 13 Wilks Avenue Malvern (Jeremy Fox/Holly Gillham, RT Edgar) – large family home on approx. 900sqm, with multiple living zones and five bedrooms – $6.3m
- 7 Keats Street Sandringham (Jenny Dwyer/Stephen Tickell, HockingStuart) – approx. 931sqm with north rear and a large family home with pool, very liveable as is but could also be further improved – undisclosed but over $3.3m
- 6b Henderson Avenue Malvern (Andrew Hayne/Fiona Ansell-Jones, Marshall White) – new townhouse on approx. 465sqm, with pool, although all bedrooms upstairs and no lift – $5,040,000
- 25 Denham Place Toorak (Hugh Hardy/Ada Taylor, Abercromby’s) – approx. 617sqm with west rear – $5.5m or $8914sqm
- 8 Johnston Street Ashburton (Damien Davis/Talia Tomaino, Jellis Craig – approx. 906sqm with west rear – undisclosed but circa $2.5m in the mid-high $2000s/sqm
- 59 Brunel Street Malvern East (Steve Burke/Margot Dawson, Hocking Stuart) – approx. 636sqm with north rear – undisclosed in the early $2millions or closer to $3500sqm
- Modern family home on good land, Ashburton – $2.3m
- Semi-detached home, no heritage, no car park, Prahran – early $1millions
- Dated modern home with garaging, Malvern East – $2.2m
- Large land, good street, Black Rock – early $2millions
- Large home, renovated single, level, Kew – $6m
- Land 800sqm, Kew – circa $3.5m
10 Royal Crescent Armadale
Top position to amenities and a pretty brick period semi-attached home was on offer here. The single-level layout would work well for downsizers and was marketed with a range of $1.75-1.925m. Gowan Stubbings and Julia de Campo from Kay & Burton teamed up for the campaign and auction, facing a crowd of about 30 people. While the weather was hot, the bidding activity was not – the auctioneer was forced to open proceedings with a vendor bid of $1.75m and could not elicit a counteroffer from anyone. The home remains available for sale.
25 Barrington Ave Kew
An interesting offering this one: architect-designed by Peter Staughton, the home had a lovely modernist feel. Small secondary bedrooms, no car access from the street and the lack of a large open plan area didn’t deter interest from four parties here (which was really only three, with one bidding also through a family member). Richard Earle opened with three vendor bids ($3.2m, $3.225m and the $3.25m), then the auction finally got started with a clip of bids. Announced on the market at $3.43m, the property sold under the hammer to the original bidder for $3.621m.