Archive for May 2015

With nearly 1000 auctions on the weekend the results for good family homes, good land buys and those appealing to the downsizer market, were good all round.

Some highlights –

Land was contested heavily again:

As we approach winter and the upcoming school holidays, off-markets properties (i.e. those not publicly advertised) are alive and well.

Some examples:

As stock levels start to slow down for winter, buyers may wish to consider whether they want to wait until spring before they buy their new home.

There will be buyers willing to sell quietly during this time, particularly if they have already purchased.

Now is the time to work out how you can best access the properties available for transaction quietly.

We have found the best way is ‘coffee’ catch ups with key agents to find the properties and then the appropriate supporting data to help buyers understand ‘values’ when there is no opportunity for ‘social proof’ (such as other buyers inspecting the home, or bidding at auction) around pricing.

Architecturally Speaking

Island benches

This is high on the wish list of most of most clients we talk to (buying and designing homes), and the homes that tend to sell well often have a great kitchen. The ‘Island bench’ is really important, as it is often the central “communication and social hub” of the home and it helps with the functionality of the working kitchen. Main points to consider:

There was a great island bench in the home we visited this week at 15 Rowell Avenue Camberwell (Nikki McCartky/Glen Coutinho, RT REdgar). (see pic below)

Large, facing north facing windows and acting in part as informal dining area, this works really well and you are really drawn to it’s presence.

Auction Highlights:

1 Russell Street, Toorak (Rob Vickers-Willis, Abercromby’s), under hammer, $3.96m, 5-6 bidders

Pretty as a picture, this well-built brick original home in a quiet Toorak location saw a good crowd gathering for it’s auction. Auctioneer Rob Vickers-Willis and listing agent Jeff Gole conducted proceedings in the private backyard, and around 40 were in attendance. Opening with a genuine offer of $3.1m, the auction clipped along nicely with a string of bids and before too long with at least four bidders pushed the action along to $3.325m, when the property was announced “on the market”. No half-time break was needed, with Rob and Jeff taking bids very quickly and in the end it was a battle of two Chinese families that really upped the ante over the $3.7mark, with one of them winning the day (and the property) at $3.96m. Land was the really key to the success of this property; just over 600m2 and a corner block with no heritage overlay works out to be just under $6,600/m2 – very healthy indeed.

34 Marchant St, Highett (Adam Gillon, Buxton), under hammer $1.435m, 3 bidders

The crowd started gathering long before Adam Gillon took centre stage. First it looked like around 70 people had come to watch the auction but that number quickly grew to 100 and then 150 in the minutes prior to the start of proceedings. The coffee van was a huge hit too and the line only dispersed as Adam started his preliminaries. Calling for an opening bid, a baby wailed:  “Don’t cry,” Adam soothed. “Mum and dad still have a chance to buy it!” Bidder 1 offered $1.1m and we were away. Bidder 2 gave a strong $1.2m and before long, Bidder 3 was in at $1.35m. There was a slight pause and, as if on cue, an elderly cyclist broke the silence, announcing his arrival with the loud ringing of his bell. And as he sped through the middle of the crowd, he gave Adam a high five much to the amusement of the spectators. At $1.41m the home was on the market. More laughs as a metre reader entered the property for sale, “life goes on,” laughed agent Paul Sibley. And with a couple more bids, the home was sold to a young family, the hammer coming down to a massive round of applause at $1.435m.

17 Willansby St, Brighton (David Hart, Buxton), under hammer, $1.67m, 10 bidders

With 17 Willansby Street selling last week with 5 bidders for $1,230,000, there was much anticipation around 6 Willansby which offered approximately 200sqm more land and a larger, original cream brick home.
Starting with a fairly low initial bid of $1,100,000, auctioneer David Hart quickly placed a vendor bid of an extra $100,000, and moments later a second bidder entered the competition with another rise of $100,000 to $1,300,000. From here, the bids continued in quick succession – 10 bidders in total – and a final price of $1,670,000.

Agent Opinion: Tips for selling and buying in the winter months

David Gillham (Noel Jones, Camberwell): “Winter is statistically the best time to sell,of course avoiding the June /July school holidays when buyers tend to chase the warmer climates in North Queensland and onto farther destinations.We find the lack of good property around seems to pump the prices of any property placed on the market at this time, simply the supply and demand  imbalance comes to the fore. Don’t be frightened of the weather, buyers will bid in the snow if they love a property enough,it is the economic climate that prevails and we all know how strong that is at the moment.”

The Melbourne property market doesn’t appear to be showing any signs of slowing down. With the number of new properties hitting the internet set to slow down as the market heads into the mid-year ‘hibernation’ around school holidays, bidder numbers have intensified, particularly for certain properties such as single level homes, larger family homes and new home sites.

Speaking to Jack Bongiorno in our travels over the weekend, he pointed out that Marshall White has had almost identical auction numbers (754/755) this year compared to last. The big difference between the two – increased buyer interest which has resulted in:

However, we attended 15 auctions over the weekend with only six selling under the hammer.   Of the nine that passed in, only 4 have sold.  This may be an indication that vendor expectations are starting to increase.

While prices overall are strong and bidding depth solid, there are still some good buying opportunities out there;

The two markets which have been attracting great interest for many months are the downsizing market and those looking for good land to develop (featuring mainly Chinese buyers particuarly in Boroondara).

New home sites:

Single-fronters:

Downsizers :

We are hearing of many younger buyers (looking for larger homes for their growing families) starting to lose confidence in this climbing market.

There are still good opportunities for younger families.  Understanding what to look for is the best way to start:

The second is to stick with the brief.   Often young families will ‘spread their wings ‘ to include many suburbs, rather than focusing on the one or two that suit best. This can lead to “not seeing the forest for the trees” stress levels increase, and good opportunities can be missed.

Auction Highlights:

76 Tivoli Road, South Yarra (Jeremy Fox, RT Edgar), bought after for an undisclosed amount, 2 bidders

The sun was shining and the crisp Autumn leaves were fluttering in the breeze as Jeremy Fox stepped out into Tivoli Rd in front of around 50 people. With the imposing Victorian as the impressive backdrop, Jeremy praised both the home and its location before asking for an opening bid. Initially looking for $4m, Jeremy then suggested $3.8m. Bidder 1 was quick to jump in at this level, as was Bidder 2 (a prominent agent on behalf of his client) who offered strong counter bids each time Bidder 1 raised the bar. At $4.35m, Jeremy headed inside to talk to his vendor. Upon his return, he told the crowd we were close to the reserve, but with no more bidding, the property was passed in for further negotiations. Bought after auction for an undisclosed amount.

76 Wattle Rd, Hawthorn (Nick Franzmann, Marshall White), under hammer, $4.75m

One of the last auctions of the day (3.30pm), and this was always going to be a big one. Where in inner Melbourne can you buy just under 1800m2 of regular-shaped land with a good period home? The answer: 76 wattle Rd Hawthorn. And sad is this is to say, this property had no Heritage Overlay, so it could be possibly be pulled down. Nicholas Franzmann is the listing agent and is well supported by his team – he continues his 2015 run of listing and selling good-sized properties in Boroondara. Auctioneer Antony Woodley has the perfect setting for this auction in the tranquil front yard, and about 80 onlookers are keen to see what transpires. Opening with a “cheeky” crowd bid of $2m, Antony was keen to counter that with a vendor bid of $3.8m and take bids from there. Several minutes passes by then bidder one comes to the fore with a $50,000 rise. At a slow pace, the auction rambles on and is announced on the market at $4.386m about 25 minutes later, with two other bidders patiently taking part. The auction is strung along with lengthy pauses and minimal $1K bids at times, and finally it sells for $4.75m, almost $400K over reserve with two chinese parties in the end fighting it out. I look down at my watch and the time is 4.20pm – what a marathon! Good result though for the vendors, they should be pleased with their agent’s efforts here today and throughout the campaign.

33 Elm Grove, Brighton (Steve Smith, Marshall White), under hammer, $2.3m, 6 bidders

Even before the auction began you could feel the depth of interest, with large numbers gathering inside the front garden around the driveway and spilling into the street. No sooner had auctioneer, Peter Kakos, completed his spiel an opening bid of $1.615m was heard. The low start was just that – a start. From here the bidding started, with 2, 3, 4 and 5 bidders increasing the bids, sometimes by $20k, sometimes by $50k or more. At many stages the buyers were so keen, amounts were being offered by multiple bidders at the same time. The property was announced on the market at $2.060m and bidders bid strongly to around $2.2m where things started to slow down. Here Bidder 6 entered the competition, walking away the new owner for $2.3m.

Agent Opinion: Are people waiting until Spring to sell, or are vendors preferring to sell quietly now?

Stefan Whiting (Buxton, Brighton): “Vendors have traditionally waited until the popular Spring period to sell, however they have become more educated and realised that selling during Winter can give them an advantage as there is less selection available for buyers. During the cooler months there is limited supply but buyers continue to look, therefore we see a similar dollar value in Winter as we do in Spring.”

The strong results continued again this week, with bidder numbers in force at most auctions, and, in the main, well exceeding vendor expectations.

The two markets we see as particularly strong are:

1. those looking for land to knock-down and re-build; and
2. downsizers looking for single-level, updated homes close to local shops.

Kew was particularly strong:

Some other big land results – both with the same land size (613sqm) in two of Melbourne’s best postcodes.

Two downsizer properties (well presented, single level, close to shops) that sold at auction:

Some Bayside sales of note:

Not all properties are making it to auction day – some sold beforehand (mid-week) for very solid prices.

Many people we talk to can’t believe that in this market the vendor would sell before auction. Selling before doesn’t mean that the results are not strong or that the buyer does not have to fight it out with other bidders. Such scenarios can present as boardroom auctions, best offers in, one offer only, or last man standing, to name a few. In this market (as in any), your best chance to be the buyer is in the preparation, research and planning.

Architecturally Speaking – Brick v Timber

Brick vs timber wall construction is a common discussion point with buyers………At the end of the day, it is very much a personal choice.

We don’t think it affects capital growth as such, but definitely some buyers will not look at timber homes (particularly people from Europe), as they consider it inferior and very different from what they used to traditionally.

In nutshell, the pros and cons of the two systems are:

Timber

Brick

Auction Highlights:

26 Goldthorns, Kew (Jellis Craig), under hammer, $2.715 million

Beautifully presented, this original clinker brick two-storey home couldn’t have looked much better for its auction. What a beautiful home this is…….and the features inside are divine if you are lover of the art deco style. Hope others see its beauty too. Yes, it is bit dated for 2015 living but nothing a good architect couldn’t address. A really good crowd of well over 100 people lined the kerb across the road as auctioneer Steve Abbott gave a concise preamble, with listing agent Belinda Anderson on the ready by his side to record the bids. Quoted originally as “over $2m”, this was always going to attract good buyer interest, especially given the huge result a stone’s throw away at 66 Campbell Road of $3.050m only a few weeks ago. Steve looked for an opening bid and a cheeky one of $1.8m was called out. Steve patiently took the bid, yet this was trumped by bidder 2 with a $2.3m call, which is much more in line with the market sentiment. Bidder 3 then joined in and bidding clipped along. At around the $2.5 million mark, the property was announced on the market and, at $2.675 million, it looked to be sold to bidder 2 until a new bidder came in at $2.7 million. Bidder 3 countered this bid at $2.71 million but bidder 4 (a Chinese family with a sharp eye for good land) offered a counter which the agent believed was $2.75 million. Alas, this is not what the bidder meant – they meant $5,000 not $50,000 – so the bidding is taken back to $2.715 million, which, at the end of the day, is enough to buy the property. No heritage overlay to this home seems not quite right, but that was what ultimately got the strong result here -$3100m2 used to be Sackville Ward prices – this part of Kew is really popular at the moment.

15 Bridge St, Hampton (Peter Kakos Marshall White), under hammer, $3.1 million, 3 bidders

With grey clouds threatening, the auction of 15 Bridge St was held in the front yard with around 70 people huddled under the carport or around the perimeter of the garden. Auctioneer Peter Kakos spent a fair amount of time describing the upside for this property, one of only a few visible larger family homes currently for sale in Hampton. After calling for an opening bid, one was received almost immediately at $2.1 million. Peter very quickly increased the price with a vendor bid of $2.5 million and the real auction began. Three parties pushed the price to $3.1 million, where the property was announced on the market. However, to the relief of the successful bidder, there was no further bidding and the property was bought for $3.1 million.

6 Nicholls Road, Ormond (Mark Staples, Hocking Stuart), passed in $1.935 million, 3 bidders

The pretty period facade of this Ormond home gives little indication to the modern transformation within. Set on 920sqm of land, it was always going to be interesting to see what happened at auction on Saturday. Auctioneer Mark Staples stepped out into the street, in front of around 80 people, and didn’t hesitate before jumping into the preliminaries. Calling for an opening bid, he was offered $1.8 million and we were away. A vendor bid at $1.88 million saw Bidder 1 come back at $1.89 million before Bidder 2 entered the fray at $1.9 million. Bidder 3 offered $1.92 million, before the home was eventually passed in at $1.935 million for further negotiations.

Agent Opinion: What is your advice for young families buying into the current market?

Julian Augustini (Hodges): ‘Buy in the best location that you can for your budget. You can always improve a home over time, but location is key for lifestyle and future capital growth.’

The market sizzled this weekend, and the weather (fine and mainly clear) and auction numbers (relatively low compared to the next few weeks) definitely helped.

On Saturday crowds were really healthy and two late afternoon auctions in Boroondara were testament to this – 424 Auburn Road Hawthorn and 57 Broadway Camberwell – both conducted by James Tostevin (Marshall White).

The Broadway auction was one of the biggest we had seen numbers-wise – with well over 400 people in attendance. Thank goodness for the expanses of parkland across the road where the auction was conducted. The result? Solid. Sold under the hammer for $6.35m and on the market at $6.0m.

Some standout results –

The coming weeks look particularly healthy, and picking up the Weekly Review this morning reinforces this as there were 175 pages of advertised properties! How much further can this market go and is there an end in sight?  These are just some of the comments we are hearing out there.

With low interest rates, buyers still out numbering supply and a low Aussie dollar, those who are not prepared to pay a ‘street record’ for a home or a price they think is too much could be ‘searching’  for a little while longer yet.  The key is making sure it is the right property to avoid the need for an early re-sale, which could potentially be quite costly (both emotionally and financially).

Architecturally Speaking – Downsizers

This is a market that is gathering more and more momentum as people are living longer, healthier and retiring earlier. The large family home is too big now the children have left and hard to maintain properly.

We are finding the following points really important to this buyer groups.

On the buying side of things, it can be really hard as a downsizer in this market for the following reasons:

Auctions – it all sounds simple to just turn up at auction and bid to level and stop, but many people don’t do that or they haven’t anticipated what may happen and the best laid plans can turn pear-shaped quickly.

Value – what is the property really worth? Often in this market the vendor’s expectation do line up pretty close with the agent quote but that isn’t necessarily where the market is. It can be helpful to know, in advance, where other buyers see value on the property?

Access to off-market homes can be hard (many are sold at the end of rental periods and do not present overly well, but that can be easily fixed!).

Protection of Privacy – often a much higher property dollar-wise has been sold, therefore your financial position can be exposed.

Emotional support – this often is  a very stressful process, and spending time before the auction undertaking proper due diligence and formulating plans can be invaluable. A trusting relationship with an experienced and independent adviser through the whole process can make all the difference.

Auction Highlights:

57 Broadway, Camberwell (James & Hamish Tostevin, Marshall White), under hammer, $6,350,000, 4 bidders

A late afternoon auction, and there was a serious buzz at this property. Although quietly listed some months back, when we attended the first open there were huge numbers through and this was always going to be big auction, crowd-wise. Parking in Stanhope Grove about a hundred metres away was a clever move, as Broadway was gridlocked with so many cars and people it must have been frustrating for those who tried to park in position that on any other day would have been easy. Auctioneer James Tostevin (Marshall White) decided to conduct the auction in the park across the road – this was a smart move as this was the perfect setting for such a large crowd (well over 400 people). As the sun streamed through the autumn leaves, James opened the auction on vendor bid of $5.2m and it did take a bit to get going. At $5.65m and with the help of some good bidding by a few bidders, the auction stopped and the bid was referred. James and team returned a few minutes later and when the auction recommenced the property was announced on the market at $6.0m. It sold not long after for $6.35m. A result that was solid, but not huge, one has to say with four bidders in all fighting it out.

86 Park St, South Yarra (Andrew Macmillan, Jellis Craig), $3,500,000, 3 bidders

A quiet start, which saw auctioneer Andrew Macmillan table a vendor bid of $2,500,000 to prompt some genuine bidding. However the quiet start wasn’t indicative of the result, as three keen bidders took the price to $3,100,000 when the home was announced on the market. Some more bidding ensued before the hammer came down to a round of applause at $3,500,000.

6 Prentice St, Elsternwick (Bill Stavrakis, Biggin & Scott), under hammer, $1,670,000, 4 bidders

Quite a crowd gathered along Prentice Street to see Bill Stavrakis auction the pretty, renovated home at number 6. After a thorough preamble, to which Bill joked he had practiced all morning, he asked for an opening bid. All was quiet so he tabled a vendor bid of $1,450,000 to kickstart proceedings. And kickstart it he did! Bidder 1 came in at $1,500,000 and bidders 2 and 3 were quick to join the competition. At $1,600,000 Bill said “we are in the selling zone” before Bidder 4 jumped in and Bill headed inside to refer to his vendor. Back outside and the home was on the market at $1,655,000. Some more prompting from Bill, and some more bids from the crowd, and the home was bought for $1,670,000.

Agent Opinion: How is the market going for this time of year (i.e. Post Anzac Day) as opposed to the same time last year?

“Post Anzac Day, the market has continued to show terrific depth of buyers in most segments which is noticeably different from this time a year ago – in fact the dollar volume of property we’ve turned over at our firm is up by around 15% on the corresponding period last year. In particular the top end continues to show enormous strength and the number of substantial family homes we’re transacting both publicly and off-market in our markets of Stonnington, Boorondara and Bayside has been as busy as we’ve seen for some time (and perhaps ever!). Looking ahead we can see really good supply in May and into the first half of June and some great quality amongst those.”