Archive for May 2017

AREC 2017

Consistency in the inner Melbourne property market is continuing with the REIV reporting a clearance rate of 77% at 6pm on Saturday evening. This is slightly down on last week’s clearance rate.

On the weekend, we noticed the continuing trend in successful post-auction negotiations after the property has passed in on the street, perhaps signifying a mismatch between vendor and buyer price expectations. Our conversations with some key agents have confirmed that, for the first time in a long time, their company clearance rates have dropped below 80%.

Many working in the real estate industry are in Queensland early this week for the annual real estate conference (AREC). Perhaps still heavily tailored to achieving outcomes for vendors, we find the conference is a good opportunity to stay up to date with the most current trends, ensuring we can continue to put our clients in the best positions to secure their new homes.

Auction Highlights:

Land Sales:

Off Market Properties:

Auction Spotlight:

39 Mason Street Hawthorn

Scott Patterson from Kay & Burton worked the crowd hard at Mason Street, Hawthorn but was unable to get an outcome for his vendor until after the auction.

More than 100 people came to witness the auction at this beautifully renovated, single-level Victorian. Scott Patterson from Kay & Burton opened the auction with a vendor bid of $4.0m, calling for $50k rises. One bidder took up the offer, while the rest of the crowd remained silent. Following a brief half-time break, no further bids could be drawn out, so the property was passed in for $4.05m. The bidding party went inside for further negotiations and the property sold shortly after in the early $4m range.

76 Manning Rd Malvern East

Daniel Wheeler and the Marshall White team working the crowd at 76 Manning Road Malvern East

Lovely morning sunshine shone on the crowd spread along Manning Road for the auction of this fully renovated family home. Daniel Wheeler from Marshall White faced a good crowd on both sides of the street. Opening with a $2.0m vendor bid, four bidders kept proceedings going up to $2.33m where it passed in, not quite meeting the vendor’s expectations.  The property sold shortly after for $2.4m.

Agent Opinion – Bob Wolff, Harcourts (USA) – the key to success in real estate

Bob spoke at the first AREC conference in 1997 and returned to AREC this week, where he spoke about his eight key strategies to achieve success for his clients. His strategies have been honed during his 44 years’ experience in real estate. While aimed more at selling agents, we found plenty of useful insight to share with our clients.

Jack Bongiorno (Marshall White) at 5 Central Park Rd, Malvern East. It was a big crowd but he couldn’t find any bidders during the auction (not even junior ones!) The property passed in on a $4m vendor bid and sold after for an undisclosed price.

The market continues to be solid, with the REIV reporting an 80% clearance rate at 6pm on Saturday. Numbers were busy at opens and auctions but there doesn’t seem to be panic on the streets, with most people prepared to wait for the right property. We still saw pass-ins on the weekend (many with multiple bidders), but private negotiations afterwards resulted, for the most part, in successful outcomes for both buyers and sellers.

The hottest market at the moment is for unrenovated homes, and we’re seeing premiums paid for these offerings and also good downsizer homes (see below).  Unrenovated homes can be a great opportunity for you to buy into your preferred area but there are many aspects to consider beyond location, such as building costs, planning constraints and what are the right decisions to make without over-capitalising. With a registered and practising architect as part of our business, our clients are able to pursue these properties fully cognisant of all the issues involved.

Auction Highlights:

Land Sales:

Off Market Properties:

Auction Spotlight:

28 Kintore Street, Camberwell

Al Craig and Richard Jellis were both present at this auction, with Al conducting proceedings for one of the two big results they had on the day.

Standing among a blanket of golden Plane Tree leaves, some as big as dinner plates, I, along with about 80 others, waited in anticipation for this auction. This property is a lovely family home located within one of Camberwell’s prettiest streets, especially at this time of the year. Jellis Craig company founders Richard (Jellis) and Alastair (Craig) were present to achieve a good result for their vendor. Alastair conducted the auction, and looked for an opening bid. Not too uncommonly for a property such as this, a vendor bid was placed and then another in the mid-$4m range. Two bidders opted shortly after and the auction climbed along in measured bids. At $5m, the property was on the market and then sold under the hammer for $5.020,000. With an unrenovated version of this selling not far away in Victoria Rd in March for around the $4.7m mark, this result tells us that perhaps there is more demand currently for unrenovated homes OR the market could be tempering.

125 Linacre Road, Hampton

James Paynter from RT Edgar worked the crowd with Rosslyn Mastrangelo at 125 Linacre Rd Hampton to entice a bid from the crowd for this family-focused home.

The sun shone through the trees surrounding 125 Linacre Road Hampton and the reasonable crowd gathered on both sides of the street for this RT Edgar auction run by James Paynter.  This Inform property was built about 9 years ago with a functional family floor plan. A north rear, as well as a west deck and paved area delivers good entertaining space.  The home is getting slightly further away from the Hampton St shops and train station.  Perhaps this contributed to buyer expectations not exceeding the opening vendor bid of $2.5m. The property passed in at this level and remains on the market for an undisclosed amount.

Agent Opinion: As an experienced agent in the Glen Iris area, how have you found stock levels recently and does there seem to be a greater demand for ‘land’ properties?

Zali Reynolds, Partner, Marshall White: Supply has definitely been low throughout 2017, particularly for quality family homes in the $2m+ range. This has seen good competition for the few available properties that have gone to auction.

This has obviously spilled over into ‘land’ value properties or homes as buyers look at other opportunities to create their ultimate family home.

Buyers need to consider all opportunities. If the location is good, consider the possibility of a renovation or rebuild.

Hot Mother’s Day auction: opening at $1.25m and selling more than $200,000 above the reserve price of $1.4m. Auctioneer Phillip Kingston (Gary Peer Real Estate) conducted proceedings at 42a Carrington Grove, St Kilda East.

While the reported auction clearance rate is still robust – the REIV reported a 78% clearance rate for this weekend – more properties seem to be passing in. We are starting to see some discrepancies between sellers’ and buyers’ expectations of price. Some vendors may have their price expectations a little higher than where market sentiment is for the property.

A standout for us attending auctions this weekend was the number of pass-ins. As a buyer, it’s important to know what’s happening on the street rather than read about clearance rates in the media, as raw numbers and bidder stats don’t always tell the full picture.

As an example, here is a list of properties that were all passed in at auction. Some sold afterwards and will therefore be reported as an auction sale but were they actually sold under the hammer (which many would say, is the conventional definition)?

• 51 Ranfurlie Crescent, Glen Iris*
• 49 Bellett Street, Camberwell*
• 50 Nicholson Street, South Yarra
• 10 Stodart Street, Camberwell
• 66 Claremont Avenue, Malvern*
• 20 Rose Street, Armadale*
• 103 Longview Road, Balwyn North
• 164 Tramway Parade, Beaumaris
• 3/1 Thomson Street, Brighton
• 6 Mytton Grove, Brighton
• 2 Milliara Grove, Brighton East
• 2 Quinton Road, Camberwell
• 49 Mangarra Road, Canterbury
• 36 The Ridge, Canterbury
• 4 Rowen Street, Glen Iris

* identifies those sold afterwards

The pass-in trend may increase, so it is vital that buyers have a good understanding of values and prepared negotiation strategies in place. Buyers also need to understand what is a good property in the context of the market: how much is too much?

Another trend we’re seeing is the increase of off-market properties. This may be for several reasons, including that properties don’t present in their best light at this time of year; advertising is not cheap; and off-market sales are not subject to the new quoting laws. We’re finding one-third of the properties we’re buying are off-market. Off-markets can be harder for buyers to find because you need to have a relationship with the key agent and ongoing relationships are very important. Negotiation strategies when you are emotionally involved can also be difficult.

Auction Highlights:

‘Land’ Sales:

Off-Market Properties:

With the colder weather upon us (properties right now are not presenting as well as they do in warmer months), there has been a considerable spike in the amount of off-market properties up for sale and /or selling. Those buyers gauging property numbers purely on those advertised online and/or featuring in print media may not be getting a feel of the ‘full market’.

Here is a sample of what we have been privy to this week: 

• double-fronted brick home – Hawthorn – $4m
• land – Armadale – early to mid $2ms
• large family home – Caulfield South – $3.5-3.8m
• land – Stonnington Glen Iris – $1.8-2m
• large period home on big land – Brighton – above $6m
• residential land – Brighton $3.5-4m
• large new family home Glen Iris – $3.5-3.7m

Auction Spotlights:

93 Stanhope St Malvern

John Bongiorno (Marshall White) working the crowd at 93 Stanhope St Malvern to entice a bid for this well-positioned townhouse.

This low-maintenance townhouse was aimed at the downsizer market. Well presented and with spacious living zones, perhaps the lack of a downstairs bedroom held potential buyers at bay. The home was first listed for private sale in mid-April for $2.5m. Marshall White then took the property through an auction campaign, culminating in this auction, conducted by Jack Bongiorno. Calling for bids and opening proceedings with a $2.2m vendor bid, the crowd spread along both sides of the street remained silent. The silence continued and the property was eventually passed in for $2.2m and is now advertised for private sale for $2.5m.

49 Bellett Street Camberwell

Hamish Tostevin (Marshall White) takes centre stage in front of a good crowd for this solid period home.

Bellett Street is an interesting street in Camberwell, as it features almost every domestic style of architecture Melbourne has offered. The house up for sale at no. 49 was of Californian Bungalow origin on a good parcel of land, yet the floor plan was a tricky one. The auction was protracted, opening with a crowd bid of $2.0m, which was quickly advanced by a vendor bid $100K higher. Bidding from several parties saw the auction break momentarily for a vendor referral at $2.425m, then ultimately pass-in at $2.45m. It sold after auction for $2.513m

Properties we like, coming up for sale early June:

2 Boyd Street, Albert Park – Gerald Betts/Cristina Porto, RT Edgar

5 Annadale Street, Kew – Robert Ding/Anton Zhouk, Marshall White

18 Asling Street, Brighton – David Hart/Stefan Whiting, Buxton

 49 Murray Street, Prahran – Anthony Grimwade/Oliver Booth, RT Edgar

Agent Opinion: The single-fronted period home has been one of the strongest performing markets this year in suburbs like Armadale, Prahran and South Yarra. Is this also true for your areas of focus – Albert Park, Middle Park, South Melbourne?

David Wood, Director, Hocking Stuart (Albert Park): Yes, the single fronted market is one of the strongest performing markets and has probably seen the highest growth in the last year of all types of property across our market.

 The key reason is the price range is right in the ‘sweet spot’ of price demand throughout the area and for that reason, it has also seen fierce competition from all sectors of buyers being home owners, investors, self-managed super funds and the renovators.

Auctioneer Tom Roberts (Nelson Alexander) entertains a healthy crowd at 132 Lee St, Carlton North. It was bought after auction for more than $1.1 million.

Victoria’s new quoting laws commenced this week, and there may be a short period of confusion for buyers regarding the quotes during the transition period, with a cross-over of properties listed for sale pre-May 1 and post-May 1.

Moving forward, buyers should expect, when visiting a property, to receive or sight a quoting sheet identifying (in accordance with the REIV price quoting changes and the Estate Agents Amendment (Underquoting) Act 2016):

• three comparable sales, taking into account the age, condition, size and location of the property;
• the suburb or town’s median house price; and
• the indicative selling price, which must be expressed as a single amount or a price range no greater than 10 per cent.

Comparable sales in metropolitan Melbourne must be within a 2km radius of the property and sold within the preceding six months, while comparable sales in regional Victoria must be within a 5km radius and sold within the preceding 18 months. When an agent believes there are fewer than three comparable sales that meet these parameters, they must state so. If the vendor rejects an offer above the estimated selling price, the agent is required to revise all advertising within a prescribed timeframe.

These new laws are a welcomed and overdue change for buyers, but they are only one piece of the puzzle and shouldn’t be relied upon solely when working through how to buy the home. Full due diligence will ensure an informed decision and the best outcome.

Further investigation needed when buying a house with a pool

The Victorian Government announced last week new laws that mean existing pools must be fenced, in compliance with current regulations. This must be done by 2020. Buyers should factor this in when looking to buy a house that features a pool that does not comply.

It will be interesting to see if prospective vendors act now to make their pools compliant in order to address this issue. With cost only one concern, the fencing of some older pools could be very difficult or even impossible in some circumstances. Some vendors may even need to consider filling in their pools.

Like anything, buyers should adopt the proper due diligence when buying a property. This is just another task to add to the list.

For more information, see ‘All Victorian pools will get fences: govt’  from the Herald Sun (4 May 2017).

Auction Highlights:

‘Land’ Sales:

Off-Market Properties:

Auction Spotlights:

36 Cochran Ave Camberwell

Richard James from Jellis Craig worked hard to entice a bid from the crowd in the front courtyard of 36 Cochran Ave Camberwell.

A period facade with modern renovation at the back was on offer here. The sun poked through for the auction, which was held in the landscaped front garden, with up to 100 people watching the action. There were plenty of features for auctioneer Richard James from Jellis Craig to espouse to the audience, but it didn’t seem enough to draw out an offer. After opening with a $3.4m vendor bid, he was forced to up the offer to $3.5m before eventually passing the property in on a $3.6m vendor bid. The property is now for sale for $3.8m.

15 Littlewood St Hampton

Paul Bond from Hodges received spirited bidding at the auction of 15 Littlewood St Hampton.

This home was marketed as offering access to a convenient lifestyle, being close to shops, the beach, trains and a selection of top schools. While the existing Edwardian offered an opportunity to extend and update, the 766sqm north rear site may inspire the new owners to start afresh with a family home or dual occupancy development (STCA). Paul Bond from Hodges had a good-sized crowd spread on both sides of the street to watch proceedings. Bidding commenced at $2.0m and moved swiftly among three bidders to pass reserve and put the property on the market at $2.4m. The final two bidders had to dig deep to outmanoeuvre each other for the home, eventually selling for $2.513m to the applause of the crowd.

Properties we like, scheduled for auction May 27

24 Norwood Avenue Brighton – Barb Gregory/Jason Collie, Marshall White

8a Central Park Road Malvern East – John Morrisby/Genevieve Hoyle, Jellis Craig

89 Armstrong Street Middle Park – Shane Siemers/John Holdsworth, Greg Hocking Holdsworth

29 Oak Street Hawthorn – Richard Winneke/Chloe Quinn, Jellis Craig

Agent comment: As one of the most experienced agents in the Stonnington area, what effect, if any, do you think the underquoting laws recently implemented by the government will have on the selling agents in Melbourne?

Iain Carmichael, Director Jellis Craig Armadale: The new legislation will undoubtedly provide more accurate price quoting for property buyers.

In a bouyant market, auction properties will often realise sale prices that are well above reserve prices; however, agents will now need to be more accurate when indicating likely reserves.

The changes will have little impact on those firms that are currently following best practice service delivery to buyers.

They will, however, shine a spotlight on those firms who feel that they might be able to ‘fudge arrangements’.

As an agency or a salesperson, unless you quote an ESP that reflects the vendors’ expectations/reserve price for the property, you are in breach of the new legislation.

After the Easter/Anzac Day break, we have a run of uninterrupted auction weekends ahead: will vendors be encouraged to sell and provide some good choices for buyers?

Today signals the first day of the new quoting rules for Victoria. There has been a lot of discussion and hype about this in the media; however, whether it will help or hinder buyers is yet to be determined.

If initial quotes are ‘higher’:

• Will buyers avoid inspecting properties advertised over their budget?
• Will the market rise further as buyers fight to be the highest bidder still?
• Will stock levels tighten up as vendors wait to interpret any effect?
• Will agent scripts and dialogues change at open for inspections?

In the meantime, the market has now resumed after the Easter/Anzac Day break and we have a consistent run of uninterrupted auction weekends, which will hopefully encourage vendors to sell and provide some good choices for buyers.

That said, looking forward to May 20 as the first bigger auction weekend, there aren’t too many ‘A’-graders to choose from.

Off-market sales have been quite prevalent in recent weeks, including a larger sale, circa $5.5m, in the Gascoigne Estate, Malvern East. There have also been good family home options, renovator delights and land sales transacting quietly over the past few weeks, providing plenty of options to buy.

Nearly a third of the homes we have purchased in the past six months have been ‘quiet’ sales. However, finding these properties can be difficult for buyers.

• How do you find the agents who specialise in these transactions?
• How do you know if the property is really for sale, not just testing the market?
• How do you know if the price is right?

Auction Highlights:

‘Land’ Sales:

And some land sales in Glen Iris the week before:

Off-Market Properties:

Auction Spotlights:

41 Westbourne St Prahran

Persistence paid off for Andrew James from Hocking Stuart in delivering a successful result for the vendors of 41 Westbourne St Prahran.

A good-sized crowd gathered on both sides of the street to watch the auction of this beautifully renovated period home. The property delivers on modern conveniences and luxuries in a sunny and character-laden package, all a stone’s throw away from Hawksburn Village. Andrew James from Hocking Stuart ran the successful auction, in between seamlessly directing traffic past the crowd. After starting proceedings on a $2.0m vendor bid and one bidder eventually putting his hand up, it seemed the property would pass in below vendor expectations. A second bidder joined at the last second and the two delivered spirited bidding to first put the property on the market at $2.27m, before the opening bidder succeeded in winning the property for a strong $2.51m to the cheers of the spectators.

34 Irymple Avenue Kew 

Great presentation, marketing and campaign saw an excellent result for this pretty house in Irymple Avenue, Kew.

A really good crowd of more than 100 gathered for the auction of this attractive, well-renovated Californian bungalow in a very pretty Kew East street. The stage was set – and the vendor had left no stone unturned to get a great result – with excellent presentation, great marketing and a well-conducted campaign. Auctioneer Antony Woodley walked back and forth in the street getting buyers and neighbours alike interested, and gave a concise preamble for this home. Antony looked for an opening bid and that didn’t take long – with a bidder coming in at $2m. Things clipped along constantly in $50 and $100K bids until bidder 1 dropped out in the $2.5m region. Three bidders come in to play, and the property eventually sold under the hammer for $2.48m – a very solid result. It seems there is no shortage of buyers for quality offerings, and no doubt many renovations may be undertaken in this area now, as many home owners will feel they won’t be over-capitalising.

81 Merton St Albert Park

A strong crowd braved the passing drizzle to see auctioneer Warwick Gardiner from Greg Hocking Holdsworth conduct proceedings at 81 Merton St Albert Park. More than any other type of property, Victorian row terraces have a lot of admirers but, when it comes to auction day, this admiration doesn’t translate into many buyers. Why? Terraces are not very liveable: they often need renovation but the floorplans don’t lend themselves easily to modern living – ie narrow stairs, small utility areas and lack of generous informal spaces. This property was passed in without a single bid, but sold after auction (price undisclosed).

Properties we like, scheduled for auction May 20

28 Hambleton Street Albert Park – John Holdsworth/Shane Siemers, Greg Hocking

28 Kintore Street Camberwell – Mark Josem/Alastair Craig, Jellis Craig

5 Central Park Road, Malvern East – Heather Elder/Rae Tomlinson, Marshall White

125 Linacre Road, Hampton – Rosslyn Mastrangelo/James Paynter, RT Edgar

Agent Opinion: As a very experienced agent in the Boroondara area, how are you seeing the demand for ‘land only’ purchases currently and how active have developers been in 2017?

David Gillham, Director, Noel Jones Camberwell: All land has been active, both to developers and private end users.

The overseas market is still strong. However, we have noticed a minor drop-off recently by developers of the higher density allotments suitable for apartments due to the amount of end product available and what is still yet to be built.

Camberwell is bringing $3,000 to $4,000 per sq mtr depending on location and land size.

There is still a little confusion in the public space regarding what the newish zoning really will allow and the recent about-face by the council due to public pressure has still not been clearly defined.