Archive for February 2018

Very big results for the very good offerings, but how do you as a buyer or seller know what a very good offering is?

Another good day for sellers on the weekend, especially for those selling the ‘rare birds’.

While we did witness a number of pass-in auctions on the weekend, many properties had sold by the end of the day and the reported clearance rate with the REIV (on a good number of reported auctions, 1219) was a healthy 70%. Although we are nearly at the end of February, it does feel like a slow start to 2018. With limited opportunities to buy, it has made things harder for buyers, and the quality offerings have sold very well if vendor expectations have been fair and the property has been well managed and marketed.

If the home is nicely renovated and has good bedroom/bathroom combinations, land size doesn’t seem to factor in too much for buyers, as we saw on the weekend with many WOW homes selling and selling well (i. Fawkner Street, Wrights Terrace, Grove Road). That said, if the land is very special and difficult to repeat, that too will be well received (ie Farleigh Grove – well located, unencumbered, well proportioned, etc).

First open inspection numbers were well attended too, with many buyers viewing the upcoming stock.

Of interest, we noted two four-bedroom family homes with some similar lifestyle offerings auctioned on the weekend. The first to auction had three bidders. With one bidder successful, the two underbidders re-focused their attention on the second home and were the only two bidding parties. Both homes sold within $30,000 of each other.

Identifying what is an A-grader and what is a C-grader is perhaps one of the biggest obstacles for buyers to work out right now, and many are missing by a big margin. Understanding this is important, as it can help when trying to determine value.

Highlights:

A number of homes were ‘bought before’ auction, some with big results:

‘Land’ Sales:

 Off-markets:

• Renovated home, Grace Park, Hawthorn – circa $6m
• Basic home with good land content, Hawthorn East – mid $2ms
• Updated period home, Port Melbourne – high $2ms
• Period home with good land content (nearly 1,000sqm), Sth Yarra – circa $7m
• Dated but functional home on large land, Sandringham – circa $6-7m

Some of the better properties scheduled for auctions on 3 March: an architect’s view

10 Green Street Windsor – Darren Lewenberg/Grant Samuel, Kay & Burton

31 St. Johns Avenue Camberwell – Geordie Dixon / James Fitzpatrick, Jellis Craig

36 Park Road Middle Park – Simon Carruthers / Jason De Stefano, Cayzer RE

29 Fawkner Street South Yarra – David Wood / Nick Gatacre, Hocking Stuart

Auction Spotlight:

67 Kerferd Street Malvern East

John Morrisby conducted a very measured auction in Kerferd Street, Malvern East

This was a nicely presented home over a single level in one of the better streets within the prized and leafy Gascoigne Estate. This property had a number of pluses: north-facing rear and the flexibility on offer to live in now as is and then renovate in time. No car garaging (or potential for it)  was the main question mark here, and many would say it was not located in the best part of the street. Opening with a vendor bid of $2.4m, auctioneer John Morrisby received measured bids from three bidders, yet ultimately passed the property in for $2.555m and it sold after auction for an undisclosed price below $2.7m. Not a bad result here and the vendor should be pleased given next door (which although not as good in terms of condition had more upside) sold for $2.585m last August.

73 Stanhope St Malvern

Andrew James from Hocking Stuart faced a good-sized crowd on both sides of the street at this successful auction.

This home offered the opportunity to create a new home for the next generation after a substantial renovation/extension to the existing period front, within Heritage Overlay guidelines. Off-street parking and a north rear orientation were further bonuses to the proximity to amenities. Andrew James led the team from Hocking Stuart in this entertaining auction. A strong opening offer of $1.5m was immediately received after the preamble. The intimidation tactic worked, as all others stayed silent and a break was called to confer with the vendors. The property was pronounced on the market, enticing bidder 2 to join the action. $5k and $10k bids flew back and forth swiftly, bringing the offer to $1.615m, where the opening bidder reluctantly stepped out. Andrew had to dispense with the jacket as the auction heated up with a fresh bidder entering the fray. At one point, he joked that he’d throw in the Lamborghini parked out the front, only to be trumped with the reply that the bidder already owned it, to the laughter of all. Alas, he had to drive away in it, as bidder 2 ended up the successful purchaser for $1.71m.

Auctions back in earnest for the first time in 2018, and results were solid with clearance rate over 70%.

Saturday saw the first key auction weekend for 2018. Although numbers are still low, the REIV reported a clearance rate at 72% at 6pm on Saturday evening. That is still healthy.

The early $2 million market saw good competition and some strong results, particularly for well-positioned, smaller family and/or downsizer properties (predominantly single storey).

Malvern East performed well on the weekend. There were about half-a-dozen similar homes and all sold for solid results.

We have noticed an increased number of Chinese buyers across Melbourne (including Bayside) looking at homes to buy and saw an increased number bidding on Saturday.  This feels noticeably higher than the numbers we were seeing towards the end of last year.  Whether this is a result of the recent Chinese New Year or a continuing trend, time will tell.

The increased volume will provide a better gauge for this year’s direction. There are some well positioned properties for sale this weekend; however, many are not without their challenges – no off-street parking, large trees, neighbouring growth zones, poor flow, the list goes on.

There is a market there, ready to purchase. But if vendors are holding out for the ‘A+ grade’ price, we may see a few more pass-ins this weekend.

Highlights:

‘Land’ Sales:

Some of the better properties scheduled for auction on 3 March: an architect’s view 

13 Emo Road Malvern East – Madeline Kennedy / Daniel Wheeler, Marshall White

59 Manningtree Road Hawthorn – Simon Curtain / Andrew Harlock, Abercromby’s

10 Kingsley Street Elwood – Torsten Kasper / Andrew Vandermeer, Chisholm & Gamon

7 Pine Street Hawthorn – Scott Patterson / Tim Picken, Kay & Burton

Auction Spotlight:

12 Stawell St Beaumaris

Mark Earle and the team from Buxton faced a large crowd at the successful auction of 12 Stawell St Beaumaris.

The offering at 12 Stawell St Beaumaris attracted plenty of interest for auction day. Maybe it was the mid-century style, the lifestyle offering with pool in the rear and park out front, the good family zoning all in a fresh and neatly presented package, or perhaps its proximity to the new Beaumaris Secondary College. The crowd stood along both sides of the street as Mark Earle from Buxton summarised the benefits of the property and commenced proceedings. An opening bid of $1.8m was made and quickly moved along, with two further bidders bringing the price into the $1.9m range, where one dropped out.  Bids slowed down to $10k and $5k intervals, but climbed steadily to exceed reserve at $2.005m. The going got tough for both parties, resorting to single thousands to try and outlast the opposition. The opening bidder was eventually the successful purchaser with $2.082m.

1 Wright Street Hawthorn

A smallish crowd of about 25 people turned up for this auction, one of the few in Boroondara on the weekend.

We remember when this property last sold in 2013 (for $1.46m) and didn’t mind it then – wide frontage, single-level home, brick, close to Glenferrie Road and MLC etc. The property hasn’t really changed since, apart from a clever cosmetic update internally and some smart landscaping externally. James Tostevin, professional as always, got the auction started promptly at 10.30am and started proceedings with vendor bid of $2.15m. Not long after, bidders 1 and 2 were in a tussle throwing mainly $10K rises. A half-time break was taken at $2.335m and the property announced on the market. Not long after, the hammer came down at $2.371m – a pretty solid result we felt. In fact, who could complain about making almost $1m in just under five years. Interesting point of note is that the underbidder was a Chinese family – traditionally they don’t like properties that are of old appearance, and semi-attached.

The 2018 market was slow to resume this year. While there were still properties to view in January, the majority were unsold homes from last year.

Most of the new stock didn’t hit the market until after Australia Day and this coming Saturday (17 February) will be the first auction weekend to test the market.

For buyers, it has been hard to find the gems. There are a number of homes for sale with compromises and some will need additional work, which may or may not be easy to undertake. There are structural issues, council regulations and overlays to consider in addition to the extra costs involved, and these issues probably outweigh any potential benefits.

Buyers may also like to consider the practicalities of some of the ‘move in with nothing to do’ homes – how well the floorplan/zoning works for the family, orientation and privacy, to name a few.  Stripped of the staged furnishings, the shell may not be as functional as originally thought.

Some buyers now regard homes that were considered close to infrastructure 10 years ago to be too far from the shops and station.

Council zoning is also becoming more of a concern for buyers.  Potential for development next door and undercapitalising … a new concept.

Of note, the single-storey homes with flexible floorplans (ie suit downsizers and/or younger couples/families) have continued to be well attended at inspections.

In fact, most of the Saturday opens we have attended have had large numbers of buyers through.  The question is whether this will this result in competition and sold stickers on auction day.

While many of the homes may not be ‘A’ graders, there is still a feeling of intensity in the market. There are only five auction weekends for the first quarter of the year, which means that there are only 2-3 weeks of new stock before the market shuts down again for Easter.

Some of the better properties scheduled for auction on 24 February: an architect’s view 

67 Kerferd Street Malvern East – John Morrisby / Adam Cashmore, Jellis Craig

90 Gatehouse Street Parkville – Nicholas Corby / Antony Harbor, Collin Simms

13 Edro Avenue Brighton East – Peter Kennett / Chelsie Cargill, Hocking Stuart

23 Radnor Street Camberwell – Désirée Wakim / Hamish Tostevin, Marshall White

‘Off-market’ Properties:

• Period home on good land, Hampton – early to mid $2millions
• Modern townhouse – Brighton – early $2millions
• Double-fronted period home needing work – Malvern – circa $3m
• High Victorian brick home needing work – Hawthorn – circa $5m
• Art Deco brick townhouse – Prahran – $1.5m
• Good-sized period family home Glen Iris – $2.4m
• Basic home on good sized land in Camberwell – $2.8m

Auction Spotlight:

10 Station St Sandringham

Peter Hickey from Buxton worked hard to try and entice a bid from the crowd in the rear garden of 10 Station Street.

This home offers a comfortable single-storey home, conveniently located to shops and restaurants, the beach and trains. While there was a reasonable crowd present at the auction, no one was ready to take up these opportunities. Peter Hickey and the team from Buxton opened with a vendor bid of $1.55m, before placing another one at $1.6m and passing the property in.

20 Erica St Windsor

Neighbours were keen to see who would take up the opportunities on offer at this auction led by Scott Banks.

Opportunities beckon for the 237sqm of land at 20 Erica St Windsor: retain, renovate and extend the existing period home or start afresh. Lapsed plans exist to build a large family home with additional studio above the rear garage. The wide ROW access could also be utilised as a second ‘street frontage’ to build two homes on the site STCA. Scott Banks Real Estate has been seeking out buyers since before Christmas, culminating in this auction. Opening proceedings with a $1.5m vendor bid, Banks consulted with the vendors when no bids were received. Eventually an offer of $1.505m was made to secure the first right to negotiate post-auction. These seem not to have met vendor expectations yet, as the home remains on the market.