Archive for September 2017

Negotiation with the agent doesn’t just happen on auction day. Kristen talks to Geordie Dixon, a newly made director and a proven performer at Jellis Craig Hawthorn.

The market has shown signs of fragmentation over the past month.

There is no doubt the good properties are still being hotly contested (and continue to create new price records) and this is likely to continue while there is a shortage of quality family homes and smaller single-storey homes for buyers to choose from. However, should the property be problematic in some way, or have a high vendor, or a combination of both, the buyers are showing discernment. The quoted price is all important to these selling.

There is additional pressure on the agents now to get the quote right. We have been through a number of good homes that haven’t had the volume of buyer inspection expected. Many buyers still think they need to add 10-20% or more to the quote and are avoiding the properties altogether.

Buyers should remember that the quote is only one piece of the puzzle. There are some good opportunities for buyers at the moment if they know how and where to look.

Of interest also is the increasing number of homes sold before auction, leaving some buyers disappointed if they aren’t prepared to move quickly. This week in particular there were a very healthy number of ‘bought befores’. As a buyer, this can be good way to go, so long as you are comfortable in your mind of ‘value’. In this scenario, you could quite easily pay several hundred thousand dollars over what you may need to at auction day if you have not thought through your strategy.

Some ‘bought befores’ of note:

• 16 Downes Avenue Brighton (Kate Strickland/James Redfern, Marshall White). Large family home on big land (approx. 923sqm), ready for next update or potential new build site – sold before auction – undisclosed amount over $4m.
• 11 Urquhart Street Hawthorn (Richard Winneke/Campbell Ward, Jellis Craig). Solid original home that had been renovated in the past and in tasteful order. Undisclosed price around $3.9m.
• 8 Hansen Street Kew (Stuart Evans/Duane Wolowiec, Marshall White). Generous block of 745sqm approx. with a neat MCM house – south-facing rear and slope considerations – undisclosed price around $3m.
• 6 Newbay Crescent Brighton (Alex Schiavo/Nathan Berrill, Kay & Burton). Approx. 712sqm, west-facing rear, convenient spot between Bay Street shops and the beach – sold before auction $3,560,000 or $5,000/sqm.
• 129 Peel Street Windsor (Guy St.Leger/Tom McCarthy, Biggin & Scott). Approx. 328sqm, north-facing rear and generous frontage. Sold for a very healthy $2,056,000 or $6,268/sqm if you placed no value on the house.
• 5 Stoke Avenue Kew (Sophie Su/Daniel Williams, Marshall White) – $5,580,000. Period reduction builder-spec home, 927sqm approx. north rear.

With limited auctions until after the Grand Final, we will return with our updates in mid-October. October 28 is shaping up as a very big auction weekend for buyers and sellers alike, with these properties to go online to the public in two to three weeks’ time.

Happy holidays, if you’re managing an opportunity to escape the lingering cold, and ‘Go Tigers’!

Auction Highlights:

‘Land’ Sales:

‘Off-market’ Properties:

Auction Spotlight:

27 Wheatland Rd Malvern

In front of a good crowd of 60-plus, five bidders vied for the rights to the keys for 27 Wheatland Rd Malvern, where Justin Long from Marshall White led the auction.

This property is a desirable offering with its direct access to Milton Gray Reserve at the north rear. The home itself is a classic Edwardian at the front with a comfortable, yet dated extension at rear, offering solid scope to take this home to the next level with a future renovation (STCA). Obviously many could see the potential and were keen participants in the auction held by Justin Long from Marshall White. Immediately starting with a vendor bid of $2.7m, three bidders quickly brought the offer to $3.05m, at which point the question was asked if the property was on the market. Returning from a vendor discussion with the answer of ‘not quite yet’, the auction resumed to swiftly hit the desired level at $3.1m. This news brought in bidder four, who was, however, unable to keep pace once bidder five joined. This left bidder one and five to fight it out alone, with bidder one the eventual victor, securing the property for $3.4m. A strong result, well above vendor expectations.

27 Sandringham Rd Sandringham

David Picking from Hocking Stuart was made to work hard at the auction of 27 Sandringham Road Sandringham, securing a sale with post-auction negotiations.

This is a pretty timber Edwardian, looking for the next renovation, in a sensational location. There was, however, buyer uncertainty with the development due to take place along the north rear boundary. David Picking from Hocking Stuart held the auction on behalf of the team and got things started with a vendor bid of $1.5m. It was slow going, with two bidders going up first in $10,000s and then in $5,000s. At $1.55m, David went inside to confer with the vendors, who were not prepared to part with the property at this level. No further bids could be teased out of the bidders once at $1.575m and the property was passed in at this level. Post-auction negotiations managed to secure the sale for $1.61m.

Within the Castlefield Estate, an almost triangular 900sqm block at 22 Avelin St Hampton delivers an unconventional home built around a central courtyard with spa. The property passed in on a vendor bid of $3.1m and is now for sale for $3.35m with Buxton Real Estate.

There were some strong results on the weekend for the good properties (ie well renovated or new, with pretty facades and/or located in good streets).

For instance, 50 Bamfield Street Sandringham (Jenny Dwyer, Hocking Stuart) – a very conveniently located home close to the station, shops, primary schools and beach on approx. 722sqm and a renovation since it was last purchased (improved but not perfect) – sold for $2,7m.

This was the third sale in 10 years for this home – it sold in 2007 for $2.2m (as a nearly new home with three large living areas including formal dining, but only three bedrooms), again in 2013 for $1.84m (with the shine of new now gone, a south-facing rear and a polarising façade) and again last weekend in a more buoyant market with some renovations to create a more flexible floorplan and a fourth bedroom.

One of the bigger questions for buyers is where are all the ‘good’ properties?

Looking at the last couple of auction weekends before the school holiday break, it has been hard for us to find the good properties in any kind of volume.

With the lack of ‘good’ supply and still very solid numbers of buyers in the market, we expect to continue to see properties sold; however, we may also see more homes bought beforehand, or sold afterward (in post-auction negotiations), as the depth for homes that are not quite right may not be there. If you are considering buying beforehand, you may wish to check you’re not the only buyer for the property, or the only one at the vendor’s dream price. It certainty can be a good opportunity, but the dollars are also important.

Looking further forward, talk among the selling agents is that October 27 (the one before Derby Day weekend) is shaping up as the next big weekend after the holidays. We have already seen a number of homes advertised for this weekend, some with notations ‘if not sold beforehand’ attached, encouraging buyers to buy now and beat the crowd … but what if there’s no crowd to beat at the buy before price?  Are you better to wait until auction?

Buying a property in Melbourne is not easy, particularly right now when quality stock is so tight. Patience is even more important, and we are encouraging all of our clients to focus on good fundamentals and the things you can’t change or easily ‘buy’.

You can’t renovate every home (some are just tricky or not cost effective). For example, tricky issues to fix include:

• The home is poorly positioned on the block, with limited rear yard space, often with large ‘unusable’ front yard space.
• Poor or no car access. Don’t trust an ad showing a ROW: try driving the car down the lane – will you/can you actually use it?
• Serious structural faults to original building bones.
• Limited access to natural light and/or poor rear orientation.
• Unremarkable facades.
• If there’s privacy issues from the neighbouring properties, landscaping isn’t always an option.

What makes a good property? Assessment is all important and buyers should be objective.

Highlights:

‘Land’ Sales of note:

Auction Spotlights:

 27 Closeburn Avenue Prahran

More than 100 people came to 27 Closeburn Ave Prahran and saw a huge result at the auction led by Gowan Stubbings from Kay & Burton.

The pretty period façade at 27 Closeburn Ave Prahran hides the well executed, contemporary renovation and extension within. The home delivers a practical single level floor plan with easy inside-out living for the coming warmer months.  Gowan Stubbings led the Kay & Burton team for the auction, receiving an opening bid of $2.7m, before quickly getting to $3.02m, at which point everyone stopped and stated they’d ‘wait until he went inside, thanks’. Left with no other option, Gowan went and spoke to the vendors, only to report that they were close but not yet on the market. Bidder 1 responded with a big bid to bring it to $3.1m, where the other bidders again asked if it was now on the market. With a laugh, Gowan said ‘Good question’, ran inside and was quickly out again with the good news that it was. This brought out a flurry of intense bidding and it was a testament to the quality of the home that four bidders fought for the property. Bidder 1 was eventually the last one standing, made to dig deep to secure the property for a strong $3.52m, and a healthy $420,000 above the vendor’s expectations.

 31 Margarita Street Hampton

The crowd enjoyed late afternoon sun while watching Mark Earle and the Buxton team achieve a strong result at 31 Margarita St Hampton.

This Carter Grange home with some low ceilings upstairs and in the kitchen was carried to a strong result with its ‘A Grade’ location. The home sits on approx. 754sqm of land, enjoys the afternoon sun from its west rear orientation, as well as rear access to Bolton Ave for quick beach access. More than 80 people squeezed through the home before settling along the street to watch the action. Following the usual preamble and rules, the size of the crowd did not mean more opening bidders. Mark Earle from Buxton Real Estate was forced to kick-start the auction with a vendor bid of $3.3m, followed by another one of $3.4m. This finally brought out the two parties keen to lay their hands on the keys and it was an entertaining battle between the two until the end. Loud spoken bids of 10k and 40k alternated to bring the property on the market at $3.6m, before slowing slightly and eventually settling at a solid $3.77m. When you consider that the same size ‘land’ next door sold for $1.875m just two years ago, the vendors should be very pleased.

Some of the better properties coming up for auction: an architect’s view

42 Llaneast Street Armadale – Andrew Hayne/Michael Martin (Marshall White)

9 Barrington Avenue Kew – Richard Winneke/Nicholas Brown (Jellis Craig)

4 The Avenue Hampton – Andrew Campbell/Michael Paproth (Marshall White)

38 Carters Avenue Toorak – Mark Wridgway/James Paull (RT Edgar)

‘Off-market’ Properties:

Tim Derham led the Abercromby’s team for the successful auction of 16 William St South Yarra: the north side of a stately Victorian in a central location, which sold for $7.01m.

We thought this week was a little hit and miss when it came to results. Some suburbs, such as Kew and Hampton, saw strong results and high clearances (Kew 100% and Hampton 87%), while others struggled to reach the 50% mark (Beaumaris 50%, Hawthorn 50% and Brighton 57%).

We think it’s safe to say that, for many of these pass-ins, price was a contributing factor.   Some vendors are factoring in the price ‘they want/need’ rather than considering the price the ‘market is willing to pay’.  However, it could spark a trend toward a steadier, or more cautious, market.

The new quoting laws are providing continued confusion for some buyers.  One auction on the weekend was originally quoted $1-1.1m on the Statement of Information (increasing to $1.05-1.15m during the campaign). At the auction, bidders were asking if the property was on the market yet.  The auctioneer took the opportunity to remind buyers that there had been other properties in the suburb selling at much higher prices. The property was finally announced ‘on the market’ at $1.285m, well above the original Statement of Information.

In general, however, we have seen a trend toward agents making a solid effort to provide more accurate quotes for properties. However, it can still be confusing for buyers who do not understand that vendors are not required to have their reserves within this range.

Some additional information buyers may wish to consider when it comes to price could include:

• How many buyer groups does this home appeal to?
• What if there are limited comparable properties available to consider?
• What are the motivations of the buyer?
• How many other similar properties are available for consideration?
• Ask agents if any properties have sold since the Statement of Information was prepared.

Adam assessing the home and in discussion with listing agent Rae Tomlinson from Marshall White at the open for 24 Manning Road Malvern East.

The AFL preliminary final is on 23 September, which also lines up with the end of the school term, and that weekend is shaping up to be a higher volume auction weekend.

We have noticed an increased number of evening/twilight auctions in the lead-up to this date and there may also be increased opportunities to buy beforehand, potentially freeing the day up to attend football functions and/or leave for holidays.

As a buyer, you may wish to consider a strategy for this:

• What are the motivations if wanting to sell/buy beforehand?
• Are you the only buyer?
• Are there multiple buyers?

Highlights:

‘Land’ Sales:

 ‘Sold Before’ Auctions

Auction Spotlight:

19 Rossfield Avenue Kew

Five bidders saw the positives in this property, which sold for a healthy $2.325 million.

This property had a lot going for it: convenient location, generous width (compared to depth) and a house (or any future house) that sits nicely up from the street. Auctioneer Walter Dodich gave his usual, no-nonsense preamble (how refreshing) and kicked the auction off with a vendor bid of $1.7m. It didn’t take too long before bidders one and then two came into play. At $2.15m, Walter paused the auction to seek (or maybe clarify) instructions from the vendor and, upon arrival, declared the property on the market. This only further enhanced interest from bidders, with another three coming in to play. With ‘mind calculations’ going into overdrive the property eventually sold to the opening bidder (who clearly wasn’t going to let this property pass him by) for a very healthy $2,325,000.

36 Airlie Avenue Prahran

Andrew James and the Hocking Stuart team performed well at 36 Airlie Ave Prahran, which sold solidly above reserve for $2.325m.

This well-presented period home in a prime location was always going to bring out keen buyers. Being the north one of the pair, with OSP and good width to the block, only added to its appeal.  Once the auction was started by Andrew James from Hocking Stuart, an opening offer of $1.9m was followed by swift bidding before stalling slightly at $2.07m. A chat with the vendors did not yet bring the property onto the market, but a third bidder joined in anyway. His regular requests on whether it was on market were finally rewarded at $2.17m, which brought on a surge of bidding between bidders two and three. The rest of the auction was an entertaining battle of the two bidders going up in alternating $1000 and $5000 increments.  The wife of bidder three let out an enthusiastic whoop when he was eventually able to secure the property for $2.325m. 

Some of the better properties coming up for auction: an architect’s view

11 Urquhart Street Hawthorn – Campbell Ward/Richard Winneke (Jellis Craig)

2/173 Walsh Street South Yarra – Sam Goddard/Ada Taylor (Abercrombys)

27 Wheatland Road Malvern – James Tomlinson/Hugh Tomlinson (Marshall White)

7 Wandsworth Road Surrey Hills – Tim Heavyside/Harley Toyle (Fletchers)

‘Off-market’ Properties: