Archive for June 2015

As we hit the halfway mark for the year, the Melbourne property mark continues to look healthy for sellers. Buyers are going to need to be on their ‘A’ game to ensure they buy the right home rather than any home.

Vendor expectations have started to creep up, in some cases above buyer expectations, particularly on properties with some concerns, no doubt hoping to capitalise on a good result because buyers are tired and frustrated and ready to buy anything – particularly without competition.

The winter months are traditionally a time of little activity, however, this has certainly not been the case this month, with many big sales taking place both at auction and off-market.

That being said, the next two weeks, (coinciding) with school holidays, will be quiet as most agents take time off to spend with family.

Talking over coffee with Michael Armstrong (Kay & Burton) during the week, he said he has had the busiest June ever which seems to be a general sentiment amongst agents.

There were fewer auctions on the weekend, many areas already quieting down for the holidays.  Boroondara was the exception with a number of big auctions such at 126 Sackville Road Kew, 6a Raven Street Kew and 1A Monomeath Avenue Canterbury all selling over $3million.

Some highlights:

One that faltered:

Off-markets:

Looking ahead, buyers may take comfort knowing that the auctions for mid-late August look to be very healthy ones in terms of numbers with two of the Saturdays potentially offering over 1000 properties to buyers.

Architecturally Speaking: Townhouses

A trend we are seeing in the market is the popularity of townhouses with buyers. This wasn’t really the case a few years back and it does seem that the dream of owning a property with a good-sized backyard to kick the footy around in is fading fast and the position along with a home that it easy to maintain is now an attractive option for families with busy lives.

Some things to look for:

Auction Highlights:

20 Studley Ave, Kew (Jeremy Tyrrell, Ray White), under hammer, $4.58m

I was looking forward to this auction. It last sold early 2014 for just over $3m, and it is landmark local property with fine architectural merit. This would be good gauge of the Kew market, and with at least 7 properties selling in Kew area for around $2.5m and above in June alone.
Auctioneer Jeremy Tyrrell gave a concise, professional spiel in front of around 40 people on the elevated front garden, with the the towering McCutcheom designed home in the background.
Opening with a crowd bid of $3.18m by Bidder 1, Bidder 2 chimed in not long after and literally after about 2 minutes and about 10 bids the property sold for a whopping $4.58m!
The market in Kew is strong right now, and the strategy employed by the buyer (who was was not Asian looking in appearance) was a sound one – bid boldly and confidently, hitting a number with 8 in it each time.
Great result for the vendor, who did not make any major structural changes since they bought the home but was smart in the design of the cosmetic upgrade and the overall internal presentation.

51 Service St, Hampton (Mark Earle, Buxton), passed in $2.1m

Auctioneer, Mark Earle, started the auction by informing the crowd that around 100 contracts had been emailed to potential buyers. We were expecting some excitement!
After the usual slow start, Mark placed a vendor bid of $2m searching for a bidder to present. Eventually one did, offering $50,000, however, once it became apparent that there were not going to be any other bids forthcoming, Mark placed a second vendor bid of $2.1m and passed the property in.

376 & 374 Montague St, Albert Park (John Holdsworth/Shane Siemers, Hocking Holdsworth)

Number 376 went to auction first, a pretty Victorian that has been updated and extended with an architect designed renovation. John Holdsworth was MC in front of a big crowd of nearly 100 people, all keen to see what would happen at this double auction in Albert Park. Unable to secure any genuine bids from the crowd, John was forced to pass the property in on a vendor bid of $2m. Most of the spectators lingered to see what would transpire next door at 374, an un-renovated single-fronted Victorian currently offering three beds and one bathroom. A couple of bidders battled it out to the pass in price of $1.14m, before the property was sold after auction for $1.16m.

Agent Opinion: Do you have an predictions for Spring? With such a strong market in Boroondara, especially Kew, do you see an end in sight for the solid competition?

Peter Vigano (Jellis Craig): “As we are now in winter there are less and less properties coming onto the market, however buyer demand remains constant all year through.  For  any new properties that come onto the market in August in readiness for spring auctions, we expect to see pent up demand and prices continue to rise due to increasing demand due to the shortage of properties available. We are expecting a very busy spring selling season and we cannot foresee the market slowing down anytime soon.”

It appears we are going to leave the first half of the 2015 property market as we entered it in January – low stock levels and a large number of buyers still wanting to buy.

Although holidays are on the minds of many agents, there are still plenty of ‘off-market’ properties transacting quietly.

Late July and August is looking OK in terms of auctions/new properties on the market, yet we don’t think the supply will be enough to satisfy the depth of buyers.

Some highlights:

Off-markets:

Land results:

There were a couple of quiet land sales transacted in Martin Street, Brighton this week (Stefan Whiting, Buxton).

Two inner city double storey properties sold on Saturday, both for $1,710,000.  Comparing the two:

Auction Highlights:

Carlton North, 588 Rathdowne St, (Tom Roberts, Nelson Alexander), passed in $1.62m, 1 bidder

An unusual looking property this one, but it works for this part of inner Melbourne and with Rathdowne Village a short walk away, the offering is very appealing. Internally the home offered a lot of accommodation and was light and bright, yet tired in places. The big plus was the garage at the rear, which is very hard to find in this area. Auctioneer Tom Roberts (Nelson Alexander) gave a good preamble and dodges some passing traffic along the way, with listing agent James Keenan by his side. Opening with a vendor bid of $1.6m, the crowd of 30 or so looked at little disinterested and then a few minutes later a couple offered $1.62m and the property passed in to them. Sold after for $1,750,000, which was a good result for buyer and seller alike.

Middle Park, 273 Richardson St (David Lack, Biggin & Scott), under hammer, $1.71, 4 bidders

With dark clouds looming overhead and rain threatening the early morning auction, a small crowd gathered around auctioneer, David Lack. An opening bid of $1.4million started proceedings, and although the crowd was lacking in numbers, 4 bidders pushed past the reserve of $1.64m, where David announced that the property was selling. The hammer finally falling at $1.71m.

Malvern East, 23 Finch Street (John Bongiorno, Marshall White), under hammer, $4.53m, 2 bidders

A large crowd gathered in the pretty front yard of this brick period home in the Gascoigne Estate, while children frolicked in the last remaining autumn leaves on the ground. John Bongiorno gave a thorough preamble and tabled a vendor bid of $4m straight out of the gate. Bidder 1 offered $4.12m and Bidder 2 came in shortly after. At $4.42m, Bidder 1 said he would bid again if the home was on the market. With that, Jack headed inside to speak with his vendor. Back outside, Jack announced the home was indeed on the market and Bidder 1 quipped “are you ready for that bid yet?” which brought some chuckles from the crowd.  A battle between the two bidders ensued before the home sold to Bidder 1 for $4.53m.

Agent Opinion: Are buyers paying a premium price for land purchases that come with approved plans?

Kate Strickland (Marshall White): ‘Broadly purchasers will see plans in different levels of desirability based on their objective when buying the land. If there are plans for townhouses and they are wishing to build a family home then they are not going to add any value to the time, effort and dollars that have been outlayed to secure the plans and often permits. If the plans and permits are approved for what the prospective buyer is wanting to create, then they will definitely see the value and often push the price higher based on the ease and comfort of the process ahead. International buyers are falling into this category as they are wishing to begin demolition and build immediately at settlement.’

At the risk of sounding like we are repeating ourselves, this weekend was another strong auction weekend in the $1m+ Melbourne property market. This trend should continue for good properties, attracting multiple bidders and strong prices before things quieten down for the June/July school holidays and the usual winter hiatus.

The Melbourne property market saw an almost 80% clearance rate for the nearly 800 homes auctioned.

Three years ago, in 2012, the same weekend had a clearance rate of only 55%, with just 550 homes to choose from.

The frustration for many buyers is continuing and this is now coupled with the downturn in stock.

For vendors wanting to sell their homes, around half prefer to sell first, ensuring they know exactly how much money they can spend on their next purchase.  The other half prefer to buy first so they have something they can move straight into, avoiding the concerns of renting or multiple moves.

Whilst the market is strong, which should encourage vendors to sell, the lack of stock and continued increasing prices (which is starting to feel like a weekly phenomenon) does not provide the encouragement that their next home will be found easily and a period of time ‘out of the market’ may mean they can no longer afford what they thought they could.

Standout auction results this weekend included:

Some of the better off-markets this week include:

Architecturally Speaking: Kitchen Design

We were asked during the week how important the kitchen is within the home. Our response was simple: it is very important, perhaps the most important room, as it is the social ‘hub’ of the home. No longer regarded as ‘just a place to cook and prepare meals’. More than ever it is a conversation place for friends and family where quality time is spent. Can you overcapitalise?   In the areas we buy for clients, we think it is hard to, but of course you need to be clever how you go about the design and material selection.

Trends:

Auction Highlights:

33 Hastings Rd, Hawthorn East (Dave Oster, Kay & Burton), under hammer, $3.55m, 3 bidders

Selling for just over $2.4m back in 2011, this was always going to be an interesting auction.
Auctioneer Scott Patterson didn’t need to wait too long for a crowd bid – it came at $2.8m and pretty quickly the auction gathered pace. Bidder 1 didn’t look too strong and petered in the $3ms with bidders 2 and 3 fighting it out. Property was announced in the market at $3.3m and then sold strongly at $3.55m.  Great result for listing agent Dave Oster, vendor should be very pleased!

9 Margarita St, Hampton (Nick Johnstone), under $2.45m, 2 bidders

The auction of the Californian bungalow on good sized land in coveted Margarita St, drew quite a good sized crowd when it went to auction on Saturday. Nick Johnstone gave a thorough preamble highlighting both the home and the location’s many assets before calling for an opening bid. Bidder 1 gave a strong $2.2m followed by $2.225m from Bidder 2 – both buyer advocates. Nick said there would be no half-time break and at $2.35m he announced that ‘by the way we are selling!’ Interestingly, there were a couple more sizeable bids after the home was announced on the market, before the hammer came down to Bidder 1 at $2.45m.

28 Vickery St, Bentleigh (Craig Williamson, Buxton), under hammer, $2m, 3 bidders

Coffee machine, big crowd, big five bedroom family home in the McKinnon Secondary College zone – all signs pointed to a good auction at 28 Vickery St on Saturday. And we weren’t disappointed. Auctioneer Craig Williamson stepped out into the street and gave a thorough preamble before calling for an opening bid. Bidder 1, just to his left, gave a strong $1.74m and we were away. Bidder 2 was up for the challenge and entered the bidding at $1.76m. A couple more bids between the two ensued before we were hit with a ‘killer’ bid from Bidder 2 at $1.9m. Bidder 1 backed down but it was here that Bidder 3 entered the competition. At $1.96m Craig announced he would be selling. The price crept up slowly and methodically in a two-way battle before the hammer came down at $2m to a round of applause from the appreciative crowd.

Agent Opinion: Are blocks of land that are selling with plans and permits getting a premium price?

Daniel Bradd (Kay & Burton): “Regardless of the state of the market, properties offered with plans and permits do attract premium prices as they negate the time delays and holding costs associated with the planning process provided that what is approved is actually feasible from both a resale and construction cost prospective. In the current market however, those properties offering redevelopment potential, particularly in council’s new ‘Growth Zones’ or areas unencumbered by heritage controls, whether for single home or multiple dwellings, are attracting premium prices without permits as opportune buyers attempt to capitalise on the increased demand for new properties across all price points.”

A shortened Market Pulse from us this week as there were only a very few auctions due to the Queen’s Birthday weekend. Numbers at opens were down and expectedly so given many people were away. That said, there are some good properties up for sale right now.

A feature auction of the weekend was 9 Bringa Avenue Camberwell:

Opening with a vendor bid of $2.7m, auctioneer Peter Vigano (Jellis Craig) gave a no-nonsense preamble for this auction, where a solid crowd of around 100 turned up to see what would transpire. Not long after the start, bidders 1 and 2 went into battle and the property was announced on the market at just over the $3m mark. Enter Bidder 3 shortly after and the heat picked up. Sitting down and a bit deflated, our original bidder looked gone and the auction went up a level, with Bidder 2 winning the day at $3.316m. This was a telling result and a good indication of the market right now, as we remember next door (no.11) selling strongly last year for $2.56m. That had a similar land size yet a slightly lesser home.

‘Off market’ properties are alive and well right now.  A few of the better ones we have been through this week include:

Good properties we visited this week that should attract solid competition:

Architecturally Speaking:

Many people who have recently bought are taking the next step and commencing renovations earlier than originally planned.  With money currently affordable, the increased property prices have provided the additional equity to start works early.

If you like where you live, the option to renovate (if done well and cleverly) may be a great solution, as the price jump to the next property is becoming prohibitive for many.

As always, it is really important to buy a home with excellent flexibility as it provides the opportunity to do this this and it gives you options –  for example it could be better for young singles/couples to buy a 600sqm unrenovated, smaller home, that can easily be upgraded, than a glitzy, modern-finished townhouse with small land content and no option to extend or improve.

The value of a good architect as always is hard to quantity in dollar terms.

The auction scene was more of the same this weekend, with strong bidding on many properties and more record prices.

Some highlights:

 Pass-ins:

Land was contested heavily again:

Off market properties have continued to increase in number this week.

Some new options to consider include:

Next weekend is the Queen’s Birthday holiday weekend.  The property market shuts down while focus is diverted to the opening of the ski season. Have a great long weekend and we will be back in a couple of weeks.

Auction Highlights:

16 Stawell St, Kew (Antony Woodley, Marshall White), after auction, $3.35m, 4 bidders

A good crowd of around 80 gathered for the early morning auction of 16 Stawell Street. Auctioneer, Antony Woodley, gave his usual polished performance. A genuine bid opened the day for $2,700,000 with a second bidder joining in immediately. The first bidder was quick to stop with a third taking their place, steady increments quickly taking the price over $3m. It became clear after Bidder 4 asked if it was ‘on the market’ that this was an auction where bidders were competing for the first right to negotiate with the vendor. Bidder 4 eventually achieving that right at $3.3m. The final result $3.35m.

16 Missouri Ave, Brighton, (Peter Kakos, Marshall White), under hammer, $2.21m, 5 bidders

Around 65 people gathered in the front yard and on the footpath outside the property, keen to see what would transpire at auction on Saturday. Peter Kakos was our master of ceremonies and after a thorough preamble, called for an opening bid. Bidder 1 offered $1.75m and we were away. Two bidders took the price to $1.9m at which point Kate Strickland dashed inside to seek instructions from her vendor. Once outside again, Kate gave Peter a smile and a nod and Peter declared that at $1.95m, yes we were selling. By now, Bidder 3 had entered the fray and shortly after Bidder 4 threw his hat into the ring. Bidder 5 chimed in for a while, but it was Bidder 4 who stayed strong throughout, outbidding all the others to become the happy new owner at $2.210m. A great auction.

21 Iona St, Black Rock (Peter Kennett, Hocking Stuart), under hammer, $1.765m, 5 bidders

This beautifully presented home attracted a lot of interest when it went to auction on Saturday. Around 100 people traipsed through the home prior to proceedings to get a glimpse of the house that had featured in a national home magazine, styled by its interior designer owner. Peter Kennett debated whether to hold the auction in the street or the picture perfect backyard, but decided on the latter, which was a great choice as the huge crowd  fit comfortably in the impeccably manicured gardens. “It’s autumn time, it’s auction time and it’s action time,” Peter boomed, and after an extremely entertaining spiel, he called for ann opening bid. A strong offer of $1.4m came from the rear of the crowd. Bidder 2 was quick to reply at $1.425m and a short battle between the two ensued before bidders three and four entered the competition. Jenny Dwyer headed inside to seek instructions from her vendor and once back out, at $1.65m, Peter declared he was selling. Bidder 5 entered the competition and after a great battle, at $1.765m Bidder 1 declared Bidder 5 “can have it,” thus ending a great competition and very entertaining auction.

Agent Opinion: Advice for buyers at auctions over winter

 

John Clarkson (Hocking Stuart): “Buyers, do your homework, attend auctions to watch a variety of styles and don’t be afraid to ask auctioneer if it is on the market!”