17 November 2018
It was another mixed round of results on the weekend. Vendors with sold stickers were likely to be feeling relief after the clearance rate statistics (47%) were posted on Saturday evening.
More than ever, buyers need to be aware that an auction has three parts to it: pre-auction, at auction and post-auction. A property can be bought in any of these timeframes. At the moment, of the properties that are being bought, it feels like they are falling equally into these sections. When the market was at its highest a few years back, this breakdown was more like about 15% pre-auction, 70% at auction and 15% post-auction. Why is this? We think predominantly because there are less ‘eligible’ buyers right now, mainly due to recent APRA loan crackdowns and money becoming less available. The media has also done its share of scare-mongering and buyers are more wary now and uncertain as to acceptable buyer behaviour.
Scarcity is still providing solid results for quality, well located properties, although offerings were pretty slim on the weekend, particularly in Stonnington.
For buyers, there are some good opportunities to buy if the offering meets your needs. While media reports of doom and gloom are influencing buyers, many of whom are missing out on buying suitable homes because they think they should wait, there are opportunities available that we haven’t seen before.
Interestingly, we have been involved in a number of transactions this year where vendors are selling their investment properties, often to reduce their land tax commitments. As property valuations have increased, so have the taxes payable. This has opened up a number of opportunities for buyers to purchase homes that have been otherwise tightly held. For a number of these vendors, the properties have seen large gains over many decades and they’re more prepared to sell in the current market at the market price.
For buyers, opportunities are opening up in areas where they may have been outpriced 12 months ago, such as Albert Park, South Yarra and Hawthorn, where many smaller homes are now available at slightly lower prices. The trade-off for the position and opportunity is that many of the homes have seen little change since purchase, therefore buyers will need to be prepared to undertake renovations, some extensive and costly. Due diligence regarding overlays, setbacks, costs etc. is very important to ensure you buy a home that can be what you want it to be.
The plus, if you’re prepared to do the work (perhaps over time), is the ability to buy in some of Melbourne’s premium suburbs, where last year buyers may have been outpriced.
22 Sussex Street Brighton – Stefan Whiting / Gary Yue, Buxton. Large, yet original home on 970sqm, located between Church Street shops/station and the beach sold for $5m or $5,154sqm.
19 Sunnyside Avenue Camberwell – Michael Hingston/Chris Hingston, Jellis Craig. Fairly original brick Californian Bungalow, 900m2 approx. north rear, blue-chip Camberwell property. Sold for $3.46m.
159 Prospect Hill Road Canterbury – Doug McLauchlan/Stephen Gough, Marshall White. Well built and designed 20-year-old single-level three-bedroom townhouse, perfect for a downsizer. Sold for $2.520m.
Some of the better properties scheduled for Auction on 1 December; an architect’s view
20 Ryeburne Avenue Hawthorn East – James Tostevin/Michael Wood, Marshall White
11 Wheatland Road Malvern – Iain Carmichael/Tim Bennison, Jellis Craig
23 Albert Street Brighton – Kate Strickland / Andrew Campbell, Marshall White
14b Dunraven Avenue Toorak – Robyn Feigen / Robert Fletcher, Kay & Burton
4 Leopold Street Glen Iris
Plenty of activity in this street, with three properties currently on the market.
We were at the auction of No. 4 – a modern semi-detached townhouse that appeals to a wide buyer group and has been tastefully designed and built. Smart to have a master bedroom suite upstairs and downstairs so that stairs are somewhat eliminated. Such a consideration would not have been taken in to account 10 to 20 years ago.
In front of around 40 people, auctioneer John Morrisby opened with a vendor bid of $1.850m and it didn’t take too long for this to be advanced by a young couple.
Enter bidder 2 (another young couple) not long after and the auction wasunderway. Original bidder looked weak and pulled out, then entered bidder 3 (probably the parent of bidder 1) to do the heavy lifting. Not an uncommon strategy these days. The property was announced on the market at $1.970m and sold not long after for $2.009m to the original bidder.
Quick-fire auction, all over in about five minutes. As a point of interest, the original full block last sold in 2000 for $450K.
8 Talbot Street Hampton
It was the perfect spring day for an auction in this well positioned part of Hampton. On offer was a period home extended some time ago, on a well sized 860sqm block. The home sits within a neighbourhood zone without a heritage overlay. Sold only 18 months ago for $2.926m under spirited competition for well over its then reserve, the current market was going to be a test for such a swift turnaround. Jack Johnstone headed up the Marshall White team, asking for $2.65m opening offers. A cheeky $2.2m was instead called out and reluctantly accepted. Another family entered proceedings with a $2.3m counteroffer. When the first bidder tried to reduce bids to $20k at this point, Jack rejected the offer, instead placing a vendor bid of $2.65m to move towards the quoted range. Bidder two offered $2.67m, at which pointed activity stalled, a discussion with the vendors followed, but no further bids could be extracted. While the family went inside for post-auction negotiations, it seems agreement could not be reached and the home remains on the market at time of writing, with an advertised price of $2.95m.