Archive for July 2023

The first few weeks back from the winter break have been fast paced and sometimes even desperate.

Some properties have sold within hours of the first inspection. 34 Yarrbat Avenue Balwyn, 90 Adeney Avenue Kew, and 43 Hardy Street South Yarra are examples.

For something like this to happen, both the buyer and seller need to be on the same page.

The question may be why are some vendors so eager to sell quickly when the numbers through the door are so high? And with more choice and more options likely to come up over the next six months, why are buyers wishing to secure a property so quickly and without completing any due diligence?

Are some selling agents also pushing for the quick sale? With such low stock, there could be quite a number of agents needing to secure a sale for their own financial needs as much as their vendors.

In addition to an increase in the number of properties hitting the web, we are also starting to see an increase in the number of ‘off-market/private sale’ properties available. Many of these (granted) have an assigned auction day (say in September or October).

This is something a little more unusual at the start of a new selling season, especially when there is the opportunity for a full public campaign and (for certain properties) an over-supply of buyers.

We think, for many vendors, privacy may be a driving factor for this, especially as most campaigns now also feature heavily on social media platforms, so that more people than ever (even those who aren’t actively looking at the real estate market) are seeing properties for sale regularly in their feeds. Digital systems that agents are using are getting more sophisticated, and the quality of information more qualified.

For many vendors, selling more privately provides better protection from well-intentioned friends and family prying too deeply into their personal and financial situations and becoming a source of gossip at family gatherings, the school playground, sports events etc.

What does this mean for buyers?

Firstly, it could be good news – there are more options to consider than first impressions suggest.

It can also make the search even more confusing and presents some questions that buyers don’t have to deal with when compared to a public campaign.

Beside the fact that everyone loves to say they bought an ‘off market’ home, almost like it’s a badge of honour, there are questions for buyers to consider:

• How do you determine value?
• How do you trust the process?
• How do you know if you are the only buyer, or one of many?
• How do you complete the due diligence without giving too much of your own information to the agent/vendor?
• How do you know the property is really for sale?
• How do you know if it’s a good property?
• Just because it is a good ‘price’, is it the right home for you?

Highlights: 

7 Ferguson Street Brighton East, Sarah Korbel (Nick Johnstone Real Estate) – single level period home, well-located, quoted $1,700,000-$1,800,000 sold for $2,382,000 – 4 bidders

22 Yeovil Road Glen Iris, Simon Lord (Jellis Craig) – land sale – 1,226sqm, quoted $2,650,000 – $2,800,000 sold for $3,340,000 – 4 bidders

50 Beach Road Hampton, Mark Earle (Buxton) – vacant land 315sqm, quoted $1,500,000 – $1,600,000 sold for $2,005,000 – 2 bidders

Some of the better properties currently on the market; an architect’s view

91 Brunel Street Malvern East – Andrew McCann/Kellie O’Neill, Jellis Craig

5 Harts Parade Hawthorn East – Scott Patterson/Danielle Balloch, Kay & Burton

15 Grout Street Hampton – Jenny Dwyer/Sandra Michael, Belle Property 

‘Off-market’ Properties:

• Contemporary townhouse circa 2000, 3-2-2, ~189sqm, Prahran – circa $2m
• Art deco family home, 4-2.5-1, ~719sqm, Camberwell – circa $3.5m
• Modern single level home, 3-2-2, ~594 sqm, north rear, Glen Iris – circa $2.5m
• Modern home, 3-2.5-2, ~620sqm, west rear, Glen Iris – circa $2.5m
• Edwardian Family home, 3-2-1, ~700 sqm, East rear,  Surrey Hills – circa $3.1m
• Family home, 4-3-2, ~1,200sqm, east rear, two levels, Glen Iris – circa $5m
• Large Modern Home, 5+-3-3, SE rear, three levels, pool, ~750 sqm, Surrey Hills – circa $3.9m
• Fully renovated brick Victorian, 4-3-2, ~650sqm, Caulfield North – circa $3.8m
• Contemporary 4-2-2, entertainer’s garden house, Elsternwick – circa early $3m
• Family sized TH, 4-3-3, basement, near amenities/beach, Black Rock – circa $3.8m
• Hamptons style 2 storey, 5-3-2 family home, ~660sqm, Brighton East – circa $3.3m
• Contemporary 2-storey 4-3-2, ~650sqm, west rear, Hampton – circa $3m
• Period 4-2-2 family home, east rear ~670sqm, Cheltenham – circa $1.85m
• Single level to renovate or develop, ~830sqm, Parkdale – circa $1.65m
• Clinker brick 4 bed family home w. pool, north rear, Sandringham – circa $3.1m
• Villa 2-1-1, easy walk to beach and amenities, Sandringham – circa $900k

Auction Spotlights:

7 Ferguson Street Brighton East

A pretty period home that has been extended and updated over the years to delivery an excellent entry to the Brighton East market. Its position to amenities and the park across the road, likely outweighed the tight driveway to the garage and rear property for many interested parties. Quoted at $1.7-1.8m, the home attracted many young families. Auction day drew a large crowd spread on both sides of street to face Joe Doyle from the Nick Johnstone team.  A strong opening bid of $1.95m had the desired effect of wiping many of these young families out of the race. A few swift bids quickly brought the home on the market. A mix of large and small bids continued the steady climb as two further parties entered the action and the early parties pulled out. The final two, although visibly being pushed to their limits, did not want to miss the opportunity and continued to stretch to bid. The home was eventually sold for $2.382m. A strong outcome we felt.

66 Manning Road Malvern East 

On a beautiful Melbourne morning 66 Manning Road Malvern East went under the hammer with Marshall White.

A healthy crowd of about 50 people witnessed a somewhat slow Auction.  A single level renovated brick home offering 3 bedrooms, 1 bathroom and a courtyard close to Waverley Road shops, restaurants, and tram access as well as Darling train station.  Quoted $1.4-$1.5m, the Auction was started with a Vendor Bid of $1.4m. There was one bidder who took advantage and put in a bid at $1.42m. Eventually the property was passed into them and sold shortly after, for a price in the vicinity of $1.45m.

With the depths of winter and school holidays almost behind us, we are hopeful that stock levels will be on the rise and some of the nervousness demonstrated by vendors, unsure whether it’s the right time to sell or not, will have passed. However, it is likely Melbourne’s property market will see a continuing pattern as it contends with an ongoing deficiency of stock, at least for the short term. To us, there certainly seems a lot of people looking to buy.

This imbalance between supply and demand is creating a unique landscape for both sellers and buyers, reflecting a market where the latter currently still outweighs the former for the right homes.

However, despite the rising demand, there seems to be a reluctance among homeowners to sell their properties, leading to a contraction in the availability of certain types of homes, in particular the renovated family homes and single storey downsizer properties. With rising costs, many investors are certainly thinking about selling and engaging agents to test the water in an off-market setting, but the numbers need to stack up.

A lack of stock, as well as low rental availability, is deterring vendors from selling before they buy because they are nervous that there will be nowhere for them to move into.

This has led to an interesting dynamic where increased numbers of buyers are competing for the same properties, leading to escalating prices and faster sales. While this is great news for sellers, it is increasingly challenging for buyers who often find themselves in bidding wars.

It is not uncommon for buyers to feel rushed or pressured in this type of environment. With the current market conditions, competition can be fierce and prices can still exceed historical records. In some instances, you must act quickly in order to secure a suitable property. But before making any impulsive decisions, it is important to prioritise your needs and understand what non-negotiables are required for you and your family and try not to get caught up in any pressure from the agent to purchase the wrong home. If you had to sell again in a short period of time, it could cost hundreds of thousands of dollars.

On a positive note, there has been an increase in the number of agents more recently saying they are talking to more vendors about selling. The yet unknown question is ‘when they will convert to sellers?’

The news last week of interest rates being kept on hold was, in the main, a welcome relief; however, there is still an expectation of them rising by the end of the year and this is within the thoughts of most buyers. This, combined with an increase in land taxes, suggests that this should lead to more vendors putting their homes up for sale later this year and before the next year of land tax is due. For many, this tax can be a very significant amount.

On a local level, Boroondara Council seems somewhat insulated from the above factors, as we are seeing an influx in international buyers. This is creating a unique situation and local buyers need to be aware of the competition, as some properties are being dominated by international interest (in particular, Chinese and Indian), which is helping drive up the prices. In addition, wealthy ex-pats are returning home and students are coming back. For locals, currency conversion rates may also be impacting their ability to compete with these buyers.

As seen in 2008, where the strong recovery in the Boroondara market (led by Chinese buyers) had a flow-on effect into other councils, this may start to occur again.

Some of the better properties currently on the market; an architect’s view

12 Callanish Road Camberwell – Geordie Dixon/Peter Vigano, Jellis Craig

6 St Kilian Street Hampton – Amanda Thomson/Nick Jones, Hodges

25 Kennealy Street Surrey Hills – Shamit Verma/Hamish Tostevin, Marshall White

‘Off-market’ Properties:

• Edwardian, single level, 4-2-1, ~600sqm, Canterbury – circa $2.8m
• Modern home on ~780sqm, 3-2-2, single level, Kew – circa $3.75m
• Large contemporary home on good land, 5-3-2, pool, Hawthorn East – circa $6m
• Edwardian brick single fronter, 2-1-0, Prahran – circa $1.7m
• Renovated 2 storey timber Edwardian, 3-2-1, Armadale – circa $3.5m
• New townhouse, 4-2-2, north one of pair, Glen Iris – circa $2.6m
• Period style timber family home, 4-2-2, Mont Albert – circa $3.1m
• Tidy home or opportunity, 4-3-4, ~660sqm, Brighton – circa $3.75m
• Californian Bungalow on ~740sqm, 4-2-2, Hampton – circa $3.1m
• Modern family home, 5-3-2, ~1200sqm, near beach, Brighton – circa $10.5m
• Californian Bungalow, 4-2-1, south rear ~600sqm, Hampton – circa $2.9m
• Fully renovated villa, 2-1-1, walk to beach & amenities, Hampton – circa $1.05m
• Single level, plans to develop, ~600sqm, Brighton – circa $3m
• Fully renovated Edwardian w studio, 5 beds, Middle Park – circa $7.5m
• Extended single fronted Victorian, 4-2.5-1, Albert Park – circa $4m
• Victorian Terrace, 3-2-1, MCG precinct, East Melbourne – circa $3.6m

Auction Spotlight:

7a Moor Street Sandringham ticks a multitude of boxes for prospective downsizers – single level, comfortably presented, lovely north light, a nice sized garden, a bonus little studio and really well positioned to the beach and amenities.  The sticking point for many, however, is the train line along the rear boundary. Whilst on the less busy/non-freight Sandringham line and behind a very high rear fence, the impost on outside living may have swayed numerous parties to hold back bidding. The property had been quoting an attractive $1.85-1.95m throughout the campaign.

Ryan Castles headed up the Belle team, opening up proceedings with a $1.8m vendor bid.  He was made to work hard for an eventual single bid of $1.82m to gain negotiating rights.  While the bidder went inside, they did not take up the reserve of $1.975m. At time of writing, the home has offers in and looks like it will sell imminently. A good package we feel.