Posts by Alexandra Ruffell

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:

46 Karma Ave Malvern East changed hands only for the second time since completion c1924. Four bidders delivered Daniel Wheeler from Marshall White a quick outcome, selling for $2.03m, in front of a large crowd in the winter sunshine.

The market clearance rate climbed back up on the weekend – to nearly 80% – and, for many buyers, the search continues.

Some market insights for buyers to consider:

• Since changes to the quoting laws, we are seeing more properties selling in and, in some cases, below the quoted range.
• We are still seeing some Statement of Information statements devoid of comparable sales (ie none) or the wrong (lower priced) comparable sales put forward.
• Buyers still are struggling with value on properties.
• Good offerings coming on, with 16 September shaping up as a bigger auction weekend; however, we still think current buyer demand outweighs the supply.
• We are hearing that money is getting harder to obtain from banks, with buyers saying that they are being asked for more financial information for applications.

Architectural advice

Offering an architectural advice service as part of our business, we get a lot of enquiries from clients/buyers etc re ‘north v south’ rear orientation. Helping helped people assess / design / renovate homes for around 20 years now, we’ve seen the awareness of this issue change: not many people understood this in the 1990s, but buyers are certainly very aware of it in 2017.

Last week, a buyer called us asking for our insights to improve a home with a south-facing rear that they had recently bought. Have we made a mistake in buying that? they asked.

Well, maybe. A north-facing rear is best if you desire and value access to direct sunlight in your rear open plan living areas, which can be paramount for a long-term family home.

A clever design can sometimes overcome some of these issues of a south-facing rear, but not always.

Characteristics of a north-facing rear:

• Direct access to natural light in the rear informal living areas – warm ‘yellow’ light,
• No, or limited, shadowing to backyard area from the house, which can be very important in winter and, if a second-storey extension is proposed, have less impact on neighbours.
• Renovation and heating/cooling costs are invariably lower, due to the positive benefits of passive solar gain.
• The quality of light into the home is certainly more pleasant and has a positive effect on those living in these homes, and scientific tests have proven this.
• More desirable to buyers for the above reasons, which can positively impact on your future financial outcomes,

Characteristics of a south-facing rear:

• No, or limited, access to natural light in to the rear informal living areas.
• Shadowing to backyard area can be very significant in winter, particularly if the home has a second-storey extension.
• Renovation work can be more expensive, as high-grade glazing/insulation may be needed to combat heat loss in the home to meet mandatory energy rating requirements.
• Less desirable to buyers. Right or wrong, some people just won’t look at south-facing rear properties.
• Rear of property is cooler in summer, due to indirect access to the sun and shadowing.
• Light is more even and consistent, albeit cool or ‘grey’. This is why many art studios like this orientation, but families don’t live in studios.

As a post-script – don’t also trust the floor plan orientations as depicted on advertising – we find this is invariably wrong. As a buyer, you need to do your own research with regard to this (which is not that hard, given most information can be found on Googlemaps).

Highlights: 

‘Land’ Sales:

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

• 139 Cole Street Brighton –Jason Collie/Barb Gregory, Marshall White 
• 2 Chaucer Crescent Canterbury – Richard Winneke/Chris Daly, Jellis Craig
• 36 Airlie Avenue Prahran – Andrew James / Lauchlan Waterfield, Hocking Stuart
• 595 Canning Street Carlton North – Tom Roberts/Janine Ballantyne, Nelson Alexander

 ‘Off-market’ Properties:

• Land, Brighton – mid $3millions
• Good land, quiet location, 20-year-old home, Toorak – over $6m
• Large land, family home with pool and garaging, Camberwell – $5m+
• Victorian terrace with 1 OSP, South Yarra – $2.7m
• Good land, home needing work, Malvern East – mid $2millions
• Well located townhouses, Brighton – circa $1m 

Auction Spotlight:

28 New Street Armadale

Fraser Cahill and the Marshall White team secured a strong result for the vendors of 28 New St Armadale, selling the property more than $200k over reserve.

Behind the pretty Edwardian façade, this property delivers grand room proportions on a single level with OSP into the rear courtyard. The benefits of its proximity to amenities comes with the danger of significant development over the rear fence along High St. This did not seem to deter potential buyers, with four bidders vying for the keys. Fraser Cahill from Marshall White opened the auction with a vendor bid at $1.36m, which drew out two bidders, who went back and forth strongly before slowing at $1.51m. After a quick consultation with the vendors, the property was announced on the market at this level, bringing in two new bidders. One of the early bidders was not going to give up though and finally outlasted the competition to secure the property for $1.726m.  A solid result, which received a round of applause from the 60+ crowd, which included plenty of neighbours.

39 Crisp Street, Hampton

Auctioneer Stephen Tickell oversaw a slow start to this auction, but four bidders joined in to buy this property, which sold for $2.5m.

Located in the growth zone, where parts of the street have already seen apartment development, this well located ’70s home on the north side of the street had appeal for both residential home owners and developers.

Auctioneer Stephen Tickell saw a slow start to the bidding, as buyers cautiously started to show their hand, initially needing to place a vendor bid of $2.1m over the first genuine bid of $2m.  In the end, the bidding was spread evenly between four bidders who all jumped in and out of the competition at various stages, until at $2,375,000, a large bid increase to $2.5m was made by bidder two (a developer) and announced on ‘the market’ to be sold.

The larger bid was successful, with the property selling at $2.5m, or $3,987sqm.

As more homes are sold around Melbourne to developers, it raises concern for remaining residents about whether to stay or leave the area. For those selling, sometimes the ‘land value’ is at a much higher rate than properties outside the zone, as can be seen with 2a Gillies Street Hampton (which sold before auction, but was scheduled for last Saturday as well).  On larger land (approx. 780sqm) around the corner but outside the zone this sold for under $3,000sqm, or around $1,000sqm less than Crisp St.

Campbell Ward (Jellis Craig) directs traffic and bidders at 5 Connell Street Hawthorn. Quick-fire auction – opened $1.7m, on the market at $1.74m and bought for $1.857m.

We are noticing fewer numbers through the open for inspections, although this could be blamed as much on the weather as any market changes. For the better properties though, which are well marketed, numbers are still healthy.

These numbers do, however, coincide with the new quoting rules on advertised prices,  perhaps suggesting that if the expected/desired outcome by the vendor is above the buyer’s preferred buying range, the buyer may choose not to inspect the property at all. This could have a flow-on effect on bidder numbers.

We have noticed less buyer interest from overseas buyers of late and, in particular, from China (which, as foreign buyers, reportedly buy eight out of every 10 Australian homes). With the banks tightening up lending and further restrictions here and abroad from government, this is certainly having an effect. Migration agents are also confirming their frustrations with respect to this.  This could be comforting for local home buyers.

Highlights:

Land Sales:

Auction Spotlight:

34 Kerferd Street Malvern East 

A good crowd gathered to watch this auction but unfortunately for auctioneer James Tomlinson there were no bids and the property passed in on a vendor bid.

On approximately 736sqm, this single-storey home had been thoughtfully renovated and offered great garaging options. Being single storey, the home does cover a fair bit of the land with only a pool and meals area in the courtyard style of garden at the rear making it a low maintenance option.

Unfortunately for auctioneer, James Tomlinson, there were no bidders present and the property was passed in on a vendor bid of $3m.

4 Kendall Street Elwood 

This auction, led by Kaine Lanyon from Marshall White, was entertaining for the large crowd.

This is a pretty brick Victorian family home, more than comfortable to live in as is, but with good scope to extend and improve further. The north-facing rear garden, good width to the block and off street parking are added bonuses for a property in this location.

The home had been available off market before the winter break for offers over $3m.  Following a quick paint and freshen-up, the property has now gone through a full auction campaign with Marshall White. Kaine Lanyon started off proceedings with a vendor bid of $2.5m before two bidders quickly moved things along, slowing only as pricing neared the $3m mark. Just when we thought a result was imminent, a third bidder jumped in and spurred everyone on again. Bidder 1 looked down and out several times, only to dig a little deeper and try another time. Having progressed in $1k, $2.5k and $5k increments from the $2.9millions, it was an entertaining game of cat and mouse that eventually saw bidder 3 come out on top, buying the property for $3.175m. Expected result, we believe.

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

16 Bailey Avenue Armadale – (Andrew Hayne/Fiona Ansell-Jones, Marshall White)

10 Scott Street Canterbury – James Tostevin/David Smith (Marshall White)

69 Greville Street Prahran – (Tom McCarthy/Michael Tynan, Biggin & Scott)

392 Williamstown Road Port Melbourne – (Arthur Apostoleros/Sophie Dobson, Buxton)

‘Off-market’ Properties:

Notable pass-ins

The auction of this property at 2/9 Kardella St Malvern East showed that the villa is back! It sold more than $200,000 over reserve.

Despite the lack of stock, the clearance rate for auctions was solid this week. Stonnington Council hit the ground running with the three biggest results, after a noticeably quieter weekend last week: 9 Avalon Road Armadale (closer to $6m), 32 Balmerino Avenue Toorak (circa $4.5m) and 2 Netherlee Street Glen Iris (high $3m).

Stock (or lack thereof) is still a major discussion point in the industry, with many agents having few or no listings. More and more buyers are reluctant to sell first before they buy. While we expect to see good property options in the next month or two, it is not likely to be enough to satisfy the buyer depth in the market right now, and this could result in a flurry of activity at the end of the year (post Melbourne Cup).

Anti-development sentiments gaining force in the traditional ‘suburbs’.

The amount of development around Melbourne is hard to ignore right now, and this too is having an impact on buyer decisions. The planning landscape changed drastically last year with significant rezoning changes, and this is starting to have an impact on land sales. While some areas are more protected (ie leafy Boroondara streets), development in other parts is being more actively encouraged (ie fringes of Glenferrie Road/Burke Road, Malvern Road). As always, pro-active due diligence by the buyer (ie independent town planning or architectural advice) is critical.

Highlights:

 ‘Land’ Sales:

Some pass-ins of note:

‘Off Market’ Properties:

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

27 Sir Garnet Road Surrey Hills – Tim Heavyside / Harley Toyle, Fletchers

39 Crisp Street Hampton – Jenny Dwyer / Will O’Brien, Hocking Stuart

28 New Street Armadale – Fraser Cahill / Dean Gilbert, Marshall White

4 Wright Street Middle Park – Simon Gowling / Warwick Gardiner, Greg Hocking Holdsworth

Auction Spotlights:

9 Avalon Road Armadale

Justin Long from Marshall White faced a large crowd for this prestige location auction.

The auction of this substantial and classically elegant Armadale property drew a crowd of 100-plus to participate and observe proceedings. While the home delivers good family living across its three levels, 9 Avalon Road is all about its prime location within Armadale.

Once the auction got underway, Justin Long from Marshall White immediately started things off with a vendor bid of $4.8m. Two bidders took it in turns trading a range of smaller and sudden larger bids to outmanoeuvre each other. The home was announced on the market at $5.42m, but both potential buyers were keen to pay well above this level to secure the property. The first bidder was eventually the successful purchaser for $5.84m.

2 Netherlee St Glen Iris

The sun shone on Daniel Wheeler from Marshall White as he orchestrated the five bidders vying for this property.

We attended the previous auction of 2 Netherlee St Glen Iris when it was sold for land value in early 2015 for $1.79m, where seven bidders pursued the property because of its location and potential to build well forward on the block.  (Market Pulse – Feb 2015)

The new owners have since built a striking family home offering five bedrooms, including an impressive master suite, 3.5 bathrooms and multiple living zones. Even with its south-facing rear, the property delivers good inside out living and has positioned the outdoor entertainment area and pool to capture maximum afternoon sunlight.

Daniel Wheeler and the Marshall White team were back from two years ago to market the new home. They first worked to sell the property off market during the quieter winter months but that did not bring out buyers willing to make an offer at the required level.  Taking the property through an auction campaign found successful bidders who were comfortable to pay $3.825m. There were four other interested parties competing, which took the price past the reserve around $3.7m.

Stephen Tickell (Hocking Stuart) conducting the auction at 41 Imbros Street, Hampton: one of the better properties on offer this weekend.

Welcome back to the second half of the 2017 Melbourne property market.

There was a small selection of homes auctioned this weekend; however, many agencies didn’t have any auctions at all. Of those that did auction, the good properties were competitive with solid results.

We now have a very solid run of uninterrupted auction weekends right through until the third-term school holidays and football finals. Listening to agents over the weekend, there will be some good choices available for buyers both ‘on and off market’.

With interest rates still low, and migration levels still buoyant into Melbourne, a downturn in the market anytime soon doesn’t seem apparent to us.

Highlights:

‘Land’ Sales:

Off Market Properties:

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

22 Kingsley Street Camberwell – Hamish Tostevin / Désirée Wakim (Marshall White)

12 Lawrence Street Brighton – Nick Johnstone / Miriam Carraro (Nick Johnstone RE)

19 Airlie Avenue Prahran – Carla Fetter / Andrew McCann (Jellis Craig)

4 Kendall Street Elwood – Michael Paproth / Kaine Lanyon (Marshall White)

Auction Spotlight:

41 Imbros Street Hampton

More than 100 people sheltered from the strong winds in the backyard at the hotly contested auction for this property.

Gathered in the backyard in an attempt to shelter from the increasingly strong winds, 100 or so buyers, neighbours, agents and the like gathered to watch this auction.

Auctioneer Stephen Tickell spent some time discussing the strengths of the property, supported by the vendors’ 41 years of enjoyment in the home.

Looking for an opening bid of $1.9m, this was quickly forthcoming and two parties battled strongly until it was announced on the market at $2.25m. With a brief pause from bidder one, a third and fourth bidder joined bidder two, before bidder one decided to return.

All four bidders were still in the game circa $2.4m; however, the last $100,000 sorted the pack, with bidder one the successful purchaser at a tick over $2.5m.

9 Randolph Hawthorn

Cameron Ingram led the auction team from Nelson Alexander at 9 Randolph St Hawthorn for this successful single-fronter sale.

This house was a prime example of a single-fronted Victorian cottage with strong potential to improve, which have been selling well in this area. The fact that it was attached on the south side has helped the buyer keep pricing to a manageable level. OSP at the front is a bonus, as is the slightly elevated position allowing good light along the north side.  The property last sold in 1996 for $181,000.

A decent crowd of 40-plus people came to watch Cameron Ingram run the auction for Nelson Alexander.  The audience was quiet when it came to the actual bidding and, after placing a vendor bid of $1.2m to start the auction, it almost looked as if the home would be passed in. At the last gasp, a bid was placed and the auction took off with two keen bidders trying to outmanoeuvre each other. Reserve was quickly surpassed at $1.32m and continued strongly to finish at $1.46m for a very happy young couple.

384 Canning Street, Carlton North

Scott McElroy from Hocking Stuart entertained a small crowd, with three bidders, to sell this property post-auction for a pretty healthy $1.69 million.

Completed homes in good suburbs continue to sell well, as this auction in Vickery Street Malvern East demonstrated. Seven bidders fought it out for this home, which sold under the hammer for $3.6m. (James Tomlinson and Rae Tomlinson, Marshall White).

Mid-year is a good chance to pause and take stock of the Melbourne property market’s performance so far. There is no doubt the market has performed strongly this year, particularly for good properties, ie well-renovated period homes, striking modern homes or premium land parcels.

For less than perfect offerings or those with issues, the gap between buyers and sellers has been widening recently, with a lot more properties left on the market for private sale after a failed auction than has been the case in previous months.

Winter is not traditionally a strong selling season in Melbourne, as colder weather and darker days means properties do not present in their best light. Many eyes are now on August and September auction selling campaigns.

While traditional residential suburbs (eg Camberwell, Brighton) had limited offerings, the inner-city suburbs like Carlton / Fitzroy recorded some good results, as you will see below.

Some sales of note:

‘Land’ Sales:

Off-markets

New quoting law analysis

Almost two months after the introduction of the new Victorian quoting laws, what sort of impact are we seeing?  At WoledgeHatt, we physically inspected dozens of properties in our area of specialisation ­­– $1.5m-plus in Boroondara, Bayside and Stonnington councils – taking note of the Statement of Information (SOI) quotes and comparables, as well as the eventual selling price of the properties. As a result, we have seen a reasonable shift in numbers (taking out outlier results for properties that sold vastly above reserve).

For May sales, where properties were still signed up under the ‘old system’, we saw sale prices on average 4.8% over the top of the quote range. Nearly two-thirds of properties were quoted below the eventual sales price.

For June sales, where the market has started to settle into the new laws, we have seen a lessening in this number, with properties selling on average 2.3% over the top of the quote price. Nearly half of all properties are now selling within the quote range.

While it will take a few more months for the backlog of properties signed up before the new quotation laws came into effect to clear through the system, if this trend continues, it looks as though quotations are coming more into line with buyers’ willingness to pay.

From general discussions with agents throughout this time, there are probably a few teething issues to continue to work through in regards to the selection of comparable properties. Depending on the property and the area, can the 2km and six-month limit at times be too restrictive and eliminate better-suited comparables, or is it too liberal and permits the inclusion of properties that are realistically not a comparison?

As a buyer, has this made things better or easier? Perhaps. Yet understanding the true value of an individual property, given its scarcity or place in the market, is still key to paying the right price for a property. More importantly, what the buyer wants to get out of the property should influence what they are prepared to pay for it, more so than the range that it is being quoted at.

Renovating – as a buyer/owner are you under-developing?

In recent years, as you may have noticed, there has been a huge amount of development going on around Melbourne and, in certain areas, councils are really encouraging this development. If you are considering renovating, it pays to keep this in mind when planning. Some call it ‘over-capitalising’, some call it ‘under-developing’, but the result is the same: the real value of your property could be in the dirt bounded by the fences, not the house itself.

Having architectural experience, we are often asked how to renovate homes and we welcome these conversations. A common theme lately has been with people wanting to undertake extensions to their existing homes, or build new on their land. Here are a couple of issues that have come to light:

• While the home may have intrinsic period quality, it may not be protected by a heritage overlay, or it could be subject to new zoning overlays that mean higher height levels are permitted. This of course encourages development. If you are able to build up to 11m metres (say) and don’t choose to (which is fair enough), your neighbours may do so and this could adversely affect your amenity and capital growth (ie your renovation costs mean nought in the end, as the true value of the property is in the land).
• Alternatively, the home may be in a Heritage Overlay area, or in a more restrictive Neighbourhood Residential Zone. Getting the right balance of old and new is critical, and you need to be very careful when planning.

These two issues can have a big impact on the re-sale or property in Melbourne. You may love your house and area and see yourself there for the next 20 years, in which case whatever money you sink into your renovation will be worth the cost. But if you are thinking of selling your house within 5-10 years, don’t expect to get the money back.

You should also plan a sympathetic renovation that is in line with the overwhelming wants and needs of buyers in that area. Spending $1 million on a renovation in Malvern where there is a lot of development and many newer properties are being built could be a waste of money. You may be better to sell and move to the Gascoigne Estate where you will be protected by heritage overlays. Similarly, building a modest cottage that’s more suited to the inner north in a leafy eastern suburb where dual occupancies or larger family homes are more in demand is also not a worthwhile investment.

More than ever, it pays to get the advice of a good architect, town planner and experienced selling agent before making any of these key decisions.

Auction Spotlight:

9 Alleyne Avenue Armadale

Andrew Hayne conducts an entertaining auction in front of around 200 people in Alleyne Avenue, Armadale.

This was a landmark 2017 auction, and a very good crowd attended. Why was it landmark? Well, the home was a beauty – cleverly designed, well renovated, enjoying an ideal north-facing rear aspect, and very conveniently located to most things great in Armadale.  The property was also very well marketed and presented. There was not a stone left unturned here by the vendor. While there was were clearly a lot of interested parties within the quoted price range, a vendor bid was still needed to get this auction kicked off and Andrew Hayne did that at $4.4m. Not long after, the first bidder entered the fray at $5m, which clearly made a strong statement. A fight was on not long after between the original bidder and one other, and the property sold under the hammer for $5.925m, almost $1m over the announced reserve. A lot of people will be surprised by this result but it just shows that buyers in this market will pay a premium for quality offerings, especially those they can move straight into. Expect to see plenty of renovation projects in this area in the coming months … the formula and process isn’t that easy though.

44 McKinley Ave Malvern

Andrew McCann and the Jellis Craig team had the sun shining down on them at the auction of this property in Malvern.

This home is an example of an unrenovated version of double-fronted period properties in the area that have recently sold for between $5-6m. Well positioned to amenities and transport, the property currently offers off-street parking, but may not allow for future garaging.

With most of the crowd spread along the opposite side of the street, as well as some key bidders on the property side, Andrew McCann from Jellis Craig needed to make his voice carry far and wide. A swift opening bid of $2.75m started proceedings and bidding from a number of parties easily brought the property onto the market at $3.01m. By the time the property was knocked down for $3.19m, five bidders had put their hand up for the property and the chance to transform this home into the period beauty it could be.

2C Kerferd Street, Hampton

Two bidders bid strongly for this property, which showed the demand for ‘position’ first. (Kate Strickland/Robin Parker, Marshall White).

‘Hampton’s style’ in Hampton.  This new home was very well located to the Hampton shops, station and beach, offering four good bedrooms (the main downstairs) and multiple living options, including a separate room off the back of the garage. On a ‘battleaxe’ block, the home had no street frontage and was accessed via a stony laneway shared with the dwelling in front.

Two bidders bid strongly in $50,000 rises from the initial vendor bid from auctioneer Robin Parker of $2.8m. With little time to pause, Kate Strickland ran inside to consult with the vendors before returning to confirm the property ‘on the market’, with the eventual sale price settling at $3.15m.

This sale supports the increasing demand for ‘position’ first.  With limited choices available for buyers wanting family homes, the position encouraged buyers to overlook any potential or future negativity brought about by the lack of street frontage, lower ceilings and limited windows in the family room.

Tennis courts always make fantastic settings for auctions. 49 Lisson Grove Hawthorn sold strongly under the hammer for $7.65m, almost $1m over reserve. Listing agent Jock Langley and auctioneer Tim Derham, Abercromby’s.

For the first time in quite a while, the clearance rate dropped to the lower 70% range, with the REIV reporting a clearance of 74%, at 6pm Saturday.

Do we think that means the market is turning? We don’t think so, but we do think that some buyers are confused by the mixed methods of quoting (some are still being quoted using the old system, while those listed post-1 May use the new ‘more accurate’ system).  We also saw some good properties pass in (eg 29 Bridge Street Hampton – see auction spotlight below) at what we believed were strong levels and some sold for even more afterwards.

Next weekend is now the last ‘big’ weekend before the market goes into hibernation before resuming with some numbers again in August.  This may result in some increased sales of homes sold privately, or, as many like to now call it, ‘off market’, particularly for vendors who have recently bought and want to minimise their exposure to any potential changes in the market place.

With reports this morning that the Melbourne population, currently sitting a little over 4.5 million, is likely to grow to nearly 8 million in the next 30 years, it is hard to imagine demand changing for the well-located, good-quality family and downsizer homes.

Highlights: 

‘Land’ Sales:

‘Off Market’ Properties:

Properties we like, scheduled for auction 1 July 2017:

63 Liddiard Street Hawthorn – Alastair Craig /  Veronica Khoo (Jellis Craig)

20 Byron Street Brighton – Ross Walker / Greg Costello (RT Edgar)

65 Karma Avenue Malvern East – Daniel Wheeler / Justin Krongold (Marshall White)

26 Salisbury Grove Northcote – Sam Rigopoulos / Eric Brown (Jellis Craig)

Auction Spotlight:

29 Bridge St Hampton

Stephen Wigley from Hodges Sandringham faced a large crowd with four bidders at the auction of 29 Bridge St Hampton.

This auction provided prospective buyers with another opportunity to purchase a well-positioned, north rear development, similar to recent good sales in Willis and Littlewood Streets in Hampton. With approximately 716sqm of land in close proximity to the beach, shops and train stations, the property included approved plans for a dual occupancy development, if potential buyers didn’t want to retain the site for a single home.  A good crowd of more than 70 people sought out the winter sunshine to watch Stephen Wigley and Paul Bond from Hodges run proceedings. Opening with a vendor bid of $2.0m the auction began slowly before picking up pace after a quick break. Four bidders brought the price up to $2.25m, where Stephen again conferred with the vendors. No further bids could be drawn from the crowd and the property was passed in at this level. The property sold afterwards for an undisclosed amount around $100,000 more.

Going to an auction as a buyer, it is important to be prepared for multiple strategies, including post-auction negotiations, as vendor expectations may be above market levels.

3 Johnson Street Hawthorn

A chilly, still winter Melbourne morning, but the bidding was hot at this auction – four bidders.

Premium north-facing land only a stone’s throw away from Glenferrie Road, this single-fronted Victorian, which clearly had seen better times, was up for auction less than two years after it last sold for around the $1.35m mark. Auctioneer Tim Derham looked for an opening bid and had to wait a while, so a vendor bid was placed at $1.8m. This started the auction and measured bidding between four bidders saw this property announced on the market at $1.975m and eventually sell under the hammer for $2.053m. What does this tell us? Good land (with above average width for the area) is still in good demand and the auction system is alive and well, as apparently this buyer (a younger Chinese couple) had only seen the property a few days ago. 

Agent Opinion: How do you see the market heading into the winter hibernation period?

Anthony Grimwade, Director, RT Edgar: As winter begins to set in and with the June / July school holidays looming, housing stock is starting to tighten. Competition for well located period and contemporary homes continues unabated and this was witnessed with last week’s RT Edgar sale of 49 Murray Street, Prahran. An original two-bedroom double-fronted brick Victorian directly opposite Victoria Gardens and in the Hawksburn Village precinct, it was hotly contested between two buyers and sold for $3,110,000, $210,000 above the reserve.

Another key RT Edgar sale at the other end of the spectrum was 8 Chesterfield Avenue, Malvern, an unrenovated 1930s two-storey home on about 1,400m² of land that sold one week into the marketing campaign (price undisclosed) but believed to be in the vicinity of $7 million.

This Elwood auction opened and was on the market for $2.95m, and sold for $3.21m. Inan/Manning, Hocking Stuart

With just under a month before the winter school holidays begin, the Melbourne property market is chugging along steadily.  The REIV reported a clearance rate of 78% and, while we attended quite a few auctions that passed in, most were sold shortly afterwards.

We have noticed numbers are down at some open for inspections. Some buyers are choosing not to inspect homes if the quote is above their preferred buy price.  Before the recent changes to quoting laws, they may have been attracted by the quote, fallen in love with the home during the inspection and then made the decision to increase their limit to try and buy it.  Now, some aren’t making it to the property for the rest of this scenario to occur.

Although the new quoting rules have been implemented, there are a number of the homes listed (the day the vendor signed the authority to sell) prior to the 1^st May being quoted the ‘old’ way.

There are also the properties quoted using the new system drawing on ‘comparables’ that aren’t really comparable.  For homes being sold in larger suburbs (such as Camberwell, Brighton, Hampton, Malvern East etc), it is important for buyers to understand the nuances of the difference precincts: their past history, current desire and potential future changes, to determine whether the example is a suitable comparable or not.

For buyers finding pricing confusing, it is even more so at the moment.

That being said, if the home is a good one, the buyers will come. We attended the official first open at 9 Alleyne Avenue Armadale on Saturday and it felt more like a party than an inspection.

Highlights:

‘Land’ Sales:

 Properties we like, scheduled for auction 24 June 2017:

9 Alleyne Avenue Armadale – Madeline Kennedy/Andrew Hayne (Marshall White)

8 Leslie Street Hawthorn – Campbell Ward/Richard Winneke (Jellis Craig)

29 Hambleton Street Albert Park – Kaine Lanyon/Justin Holod (Marshall White)

3 Champion Street Brighton – Campbell Cooney/Alana McGuinness (Hodges)

Auction Spotlight:

78 Hope St South Yarra

There was a strong crowd and spirited bidding from five parties during this auction.

This home is an unpolished gem in a prime location. Interested parties could envisage what a thorough renovation of this north side of a pair home could deliver and the value of the proximity to parks, public transport, restaurants and the city. Opening with a vendor bid of $1.85m, Tim Brown from Castran Gilbert received numerous offers that quickly placed the property on the market at $1.95m. With one party trying to slow momentum with smaller and smaller bids, another bidder tried to intimidate the opposition with large offers. With five parties vying for ownership, the first momentum-slowing-bidder was eventually successful in buying the property for a solid $2.21m.

3 Vaucluse St Brighton

Julian Augustini from Hodges Bayside was made to work hard to entice a bid from the audience at this auction.

This spacious family home with a north rear is well positioned to the Bay Street shopping precinct, a range of schools and the beach. While its proximity to the development growth zone and Hampton Street traffic noise may have held bidders at bay, the property offered a good step into the Brighton market. Seeking opening bids of $2.2m, Julian Augustini from Hodges placed a vendor bid at this level to open proceedings. As we are seeing more frequently recently for properties without a strong wow factor, there was only one bidder present, placing a bid of $2.22m, which the property eventually passed in at. Post-auction negotiations secured the sale for $2.25m. 

Agent Opinion: As one of the newer agencies in Bayside achieving strong results, including your sale at 31 Third Street, Black Rock on the weekend (over 900sqm with large, but dated, family home) selling for $2.52m, where are you seeing the strength in the market?

Kylie Charlton, Director, Charlton King (Sandringham): We are seeing two separate markets at the moment – the downsizers and the younger families.

Speaking specifically for south Bayside, the downsizers can be broken into two groups – those under 65 who are still prepared to do some renovations, and those over 65 who want to move in to a home that is all done with no extra work.

Most downsizers are wanting to stay within 2 kilometres of their family homes and are not prepared to sell until they have bought.

This is having a flow-on effect on stock levels for families trying to buy into the area, many of whom have been renting in the area and are now ready to buy, or want to upscale.