Archive for February 2019

The first big test weekend for 2019 has passed somewhat smoothly, albeit a far cry from the start of 2017 and even 2018. Most of the properties we attended had bidding, even if it was from only one party, with the property more often than not selling after in private negotiations.

The quote has become an important part of the process.  Many of the homes we reviewed over the weekend sold within their respective quote ranges.  Moving forward, however, this may be more difficult for agents to predict, as an increasing number of homes are being reported sold with no prices recorded.

If buyers and sellers were waiting for some additional guidance after this weekend, the results suggest there are good opportunities to buy or sell at the moment.  If buyers are only searching for bargains, or sellers are waiting for a dream price, they might be better to wait.  For those wanting to move onto various stages of their lives, whether it is buying, selling or both, there is still a market there.

For those thinking of upgrading, now can be an even better time to make the move, particularly if you are willing to buy something a little ‘daggy’ that you can fix up over time.

We believe there are still a number of well-located properties that can become ‘A’ graders out there to buy.   The key is being able to identify the level of work required and cost involved to assess whether the end product would be over-capitalising for the suburb.  A basic understanding of what can and cannot be done in a town planning and building permit sense is also a very important consideration. Adam, a registered and practising architect, has helped many of our clients buy into suburbs otherwise unachievable had they been searching for completed products.

Some of the better properties scheduled for Auction on 2 March; an architect’s view

10 Willansby Avenue Brighton – Sarah Korbel/Russ Enticott, Nick Johnstone

128 Harcourt Street Hawthorn East – Chris Daly/Danielle Balloch, Jellis Craig 

25 Woodside Crescent Toorak – James McCormack/Andrew Hayne, Marshall White  

18 Staniland Avenue Malvern – John Morrisby/Matthew Coombs, Jellis Craig

‘Off-market’ Properties:

• Fully renovated & landscaped family home, Toorak – circa $9m
• Pretty Victorian double-fronter, Hawthorn – circa $2.65m
• Two storey, Art-Deco duplex, 3-2-1, Elwood – around $2m
• Modern Townhouse with lift, school zone, Beaumaris – circa $2.4m
• Single level family home on over 850sqm, Malvern East – circa early $2m
• Timber Victorian family home, 2 storey with West rear, Armadale – circa $3m
• Californian Bungalow on good land, Balaclava – circa $2.6m

Auction Spotlight

Nick Johnstone was made to work hard for a bid on 55 Durrant St Brighton, promising to jump in the pool in return for a bid!

Well positioned to the Bay Street shopping precinct, 55 Durrant St Brighton offers a family home with multiple living options and good bedroom separation, as well as an easy-flowing entertainer’s deck and pool off the rear lounge. Comfortable now, but the home would benefit from a freshen up.  A sizeable crowd gathered in the garden for the Nick Johnstone auction, quoted at $1.8-1.85m.  Following the preamble, Nick was faced with a silent crowd, even after he placed his one and only vendor bid of $1.75m.  Eager to entice a bid, he offered to jump into the pool fully clothed for any bid that was placed!  It took a while for this strategy to work, with a young couple eventually taking the plunge with a $1.755m offer.  There was almost another bid placed, although quickly corrected.  No further action was to be gained from the crowd, so the property was passed in for further negotiations with the bidder.  The home sold shortly after for an undisclosed amount close to $1.9m.  Nick Johnstone kept his promise and took a leap into the pool after the deal was done.

In vast contrast to last weekend’s sweltering conditions, the temperature on Saturday hovered around 15 degrees for most of the day with heavy showers and intermittent squalls … but that’s Melbourne!

What was the same, surprisingly, was the number of buyers out at opens, braving the weather and checking out the stream of new properties open for inspection.

There was also a spattering of auctions across inner Melbourne.  The five key councils (Boroondara, Stonnington, Glen Eira, Port Phillip and Bayside) saw 20 reported auction results.  Collectively the suburbs within these councils cleared 70%.  Interestingly, all but two sales were under $2million and the two that were over that figure passed in.

Such few results really don’t provide an indication on market direction. We are more likely to get a better feel after the auctions on Saturday 23^rd February, where there should be more volume.

A lot of time has been spent worrying about whether the Banking Royal Commission Report would further impact market conditions.  Immediate downward changes to the market were seen at the commencement of the enquiry, with banks tightening lending criteria, introducing new checks and measures before making funds available and restricting interest only/investment loans.  This, however, has been done and the market has adjusted accordingly.

Among the recommendations there was much focus on changing the rules regarding mortgage broker remuneration.  We believe good mortgage brokers play an important role in the property market.  They are often able to assist small business owner buyers into the market, taking the time to consider their needs and explore the plethora of options available from all banks and financial organisations to find the right package.  Many are small business owners themselves. Whether this will impact the market further, only time will tell.

As quickly as the market has started, it will soon be school holidays and Easter and the new stock will dry up again. With ‘Labour Day’ long weekend looming, some agents have mentioned longer campaigns to ensure buyers absent over that weekend have time to view properties before they are auctioned.  This may also be a strategy to try and sell a few homes before auction if they feel there may be only one standout buyer.

‘Off-market’ Properties:

• Renovated single fronter with OSP on approx. 190sqm, Prahran – circa $1.55m
• Pretty period home on large land, Hawthorn – $5.5m-6m
• Single level Victorian with large courtyard, Hawthorn – circa mid $1m
• 3 bed single fronter with 2 bath, 2 OSP, Kew – circa $1.7m
• Family home on approx 579sqm, Malvern – circa early $2m

The 2019 property market started positively on Saturday. Perfect weather, some good choices among the new listings and plenty of interested buyers inspecting homes.  While we saw many new faces, there were also a number of more familiar faces out and about again, still looking for their perfect home.

Saturday, in reality, was vastly different to the anticipated doom and gloom we had expected to see after reading the ‘House price plunge hits GFC levels’ article in Saturday’s Age before heading out to our inspections.

Of the homes we inspected today, most had a positive vibe and good numbers through the doors. (Note that we generally only inspect the better homes on offer, after ruling out a large portion from review). Some homes, such as 8 Henrietta Street Hawthorn, 64 Paxton Street Malvern East and 22a Ferguson Street Brighton East, were overwhelmingly busy with more than 30 groups through each, reminding us of the more recent buoyant markets.

There’s still a fair bit of water to go under the bridge before we can determine the accuracy (or inaccuracy) of the negative summer media market headlines. However, if numbers are anything to go by, it was a resounding tick for success. With such beautiful weather, we are sure there were better options than looking at homes just for fun!

Questions still loom, however, as to whether the Banking Royal Commission findings report, to be handed down today, will further impact the market. Maybe next weekend there will be no buyers?! Although we can’t see that happening. Looking at the number of families searching on the weekend, they need homes to live in now and really can’t wait until times may be more suitable – the children are growing now.

We see the current market providing good opportunities for buyers. Prices are more achievable than 12-24 months ago, particularly as many vendors have now adjusted to the changing conditions.

Of most importance is the need for buyers to be ‘Buy-Fit’ before embarking on the search.  What do we mean by ‘Buy-Fit’?  We mean completing some due diligence before starting physical inspections.

Buy-Fit includes:

• Ensuring finance is in place. This can now be a lengthy process, often longer than the three weeks a sales campaign usually runs. Regularly checking it to ensure its currency is also important.
• Familiarise yourself with the updated prices within the precincts of suburbs.  Some areas have not changed, others have seen significant change. Knowing this can help with negotiations. As fewer homes are being sold under auction conditions, the social proof re price is no longer easily visible
• Determine your non-negotiables in advance and stick firm on them. While it is unlikely you will find a home that ticks 10/10, stamp duty is an additional cost of 5.5% on top of the purchase price. It can be an expensive exercise if you need to sell again quickly. 

Many agents reported an increase in the number of homes sold in January compared to previous years. While positives can be taken from this, the last few years often saw little stock left unsold leading into the holidays (ie. nothing or very little to sell in January). It does, however, demonstrate that buyers are around and willing to transact at the right price and vendors are becoming more commercial as time goes by.

New stock levels are still fairly low as we start the year. In among the choices are some quality homes. Early indications would suggest that the well-priced, well-located homes should receive solid competition; however, for vendors who haven’t yet adjusted to the new market it may be a little harder to achieve a sold sticker on their board.

Some of the better properties scheduled for Auction on 23 February; an architect’s view

1a Bayview Rd Beaumaris – Amanda Thomson/Nick Jones, Chisholm & Gamon

64 Paxton Street Malvern East – Fiona Ansell-Jones/Andrew Hayne, Marshall White

19 Spencer Road Camberwell – Geordie Dixon/Michael Hingston, Jellis Craig

4 Silver Street Malvern – Tim Derham/Michael Derham, Abercromby’s

‘Off-market’ Properties:

• Two storey period home on ~500sqm, brick, Nth rear, Armadale – circa $5m+
• Double fronted brick Edwardian, North rear, St Kilda – early $2m
• Large period home on over 1,000sqm, Hawthorn – circa $6m
• 4 bed family home with pool, Malvern – circa high $4m
• Modern two storey home, 4 bed, DLUG, pool, Canterbury – circa $3.5m
• Family home, high tech, pool on approx 930sqm, Malvern East – circa $6m
• Close to beach, 899sqm, dated home, Beaumaris – circa early $2m
• Large townhouse with lift, school zone, Beaumaris – circa $2.4m
• Renovated period, two storey home, approx. 775sqm, Brighton – circa $4.2m
• Basic home, good land with tennis court, prime beach location, Brighton – circa $8m+
• Good land, 650sqm, well positioned, Hampton – early $2m
• Renovated period home on large land, Brighton – circa $6m