We believe the weekend results confirm our previous reports that Melbourne is running a two-tiered market.
The well positioned, correctly priced and increasingly scarce properties are attracting good competition and some strong results (particularly if the property suits the downsizer market), while the remaining homes, those needing work, with not-quite-right floorplans, poor orientation, and/or location issues, struggle to attract any interest, particularly if the vendors have high expectations.
The downsizer market (who, in general, are not as reliant on finance for their purchase) continues to grow and strengthen as more buyers enter the market searching for single-storey homes in the quiet streets close to amenities. Examples on the weekend could be seen at 5 Edward Street Armadale – six bidders, on the market at $1.42m, selling for $1.82m and 8 Gordon Crescent Black Rock – four bidders, on the market at $2.475m, selling for $2.63m.
While quite different in their offering, it was their similarities, which are constantly in demand and short supply, that saw 10 bidders between them where other homes saw none. Both sold well above their respective reserves, which is perhaps the other key to their successful sale – the vendors of both properties had realistic price expectations.
The weekend saw 20 reported homes sell over $3 million, of which over half were in the Stonnington Council. The top end of the market is still travelling well, with many buyers again not as reliant on finance. The bigger issue is finding the stock.
- 248 Richardson Street Middle Park (Simon Gowling/Warwick Gardiner, Greg Hocking Holdsworth) – again, a single-storey home in a quality street, comfortable but could also be further updated, even with no off-street parking, sold for an undisclosed amount comfortably over $3.5m.
- 7 Kingston Street Malvern East (John Morrisby/Matthew Coombs, Jellis Craig) – approx. 941sqm opposite Central Park with an Edwardian looking for its next renovation (STCA in a heritage precinct) sold well, with scarcity again in play. On the market at $4.525m, sold well above reserve for $4.825m.
- 9-11 Ashley Grove Malvern (Richard Mackinnon/Fraser Cahill, Marshall White) – approx. 1651sqm in the growth zone (GRZ10), sold $7.1m or $4,300sqm.
- 4 Moule Avenue Brighton (Nick Johnstone/Joe Doyle, Nick Johnstone Real Estate) – approx. 827sqm with a French Provincial style large family home in the Golden Mile, $6.1m.
- 6 Joyce Street Elwood (Torsten Kasper/Carolyn Clarke, Chisholm & Gamon) – a modern, well located townhouse, $3,215,000.
Some of the better properties scheduled for Auction on 10 November; an architect’s view
57 Mary Street St Kilda West – Adrian Wood/Michael Paproth, The Agency
41 Bamfield Street Sandringham – Richard Slade/Peter Hickey, Buxton
18 Lalbert Crescent Prahran – Darren Lewenberg/Grant Samuel, Kay & Burton
- Art Deco renovation opportunity with north rear, Clifton Hill – circa high $2m
- Converted church hall, large family home, St Kilda West – circa early $7m
- Family-sized Californian Bungalow, Malvern East – circa early $2m
- Fully renovated Californian Bungalow, Malvern East – circa mid $3m
- Edwardian high on the Hill on 890sqm, Sandringham – circa $3m
- Fully renovated family home on 1,045sqm, Hawthorn – circa high $5m
- Within 1800s shell, 2 bed, 3 bath, 3 Garage, Port Melbourne – circa $2m
5 Edward Street Armadale
Even in this market, this auction was going to fire and it certainly didn’t disappoint. Why? Scarcity. And something this market really wants and needs: single level. Good car garaging. No body corporate. Light-and-bright and cleverly architect-designed – well done again Nicholas Day. A healthy crowd gathered (most were here to buy) and there was a real buzz. Bidding started off with a low-ball $1.2m offering – which I thought was a bit silly really, if your goal is to try and buy the home. It didn’t take too long for this auction to take off and the property was announced on the market at $1.42m then sold for $1.82m. Six bidders put their hands up here, but there could have been more had they had a chance to bid. Auction was all over in about five minutes, and I overheard someone use the word ‘crazy’ with respect, but I didn’t think it was really. Good properties in the hands of good agents with realistic vendors tend to always sell – and sell well.
7 Kingston Street Malvern East
On offer here was a solid, original home with healthy bones and excellent potential. Car access via the southern side of the house was generous and there was good opportunity for prized northwest light in the backyard. The renovation could be relatively straightforward and it will be interesting to watch the progress of this property in the coming months/years as it transforms. But the X factor was the location – there are not too many properties which front on to Central Park, but this one did. Auctioneer John Morrisby gave a spirited preamble, and officially kicked the auction off on a vendor bid of $4.15m. Not long after, this was advanced by two bidders in a steady pace of to-and-fro bidding. The property was announced on the market at $4.25m and then sold under the hammer for $4.825m not long after. Well done to the buyer – they have done well.
The Spring market has now well and truly kicked off. Whether it is the improved weather, or the opportunity to view some new offerings, we’ve seen an increase in the number of buyers inspecting homes.
Those buyers without homes are coming to the realisation that Christmas is nearly upon us, with a limited number of auction weekends before the market closes up until after Australia Day. Take the Cup and Election weekends out of the mix and we are looking at only eight more good auction Saturdays, two of which already have campaigns underway.
Certainly, the better homes that are marketed and quoted accurately are seeing competition, albeit more tentatively off the mark. Buyers definitely seem to have more firm limits, however. Unlike 2016-17, where auctions started strongly and buyers slowly kept edging over their limits when bidding, we are seeing far more cautious initial bids that become stronger as a second and sometimes third bidder become involved, particularly if the home is announced ‘on the market’.
We are also seeing some homes defying the market trend. Homes combining scarcity with position are still performing above and beyond any previous market results. We inspected a very good home in Armadale, in a premium location, which was ‘opened’ for the first time last week and bought at the asking price by the first person through.
We think it is important in any market to buy a good property first. It is easy to get caught in the trap of a down market by buying something just because it is cheap, even if it isn’t quite right. The good homes become less available in a down market, particularly if vendors don’t have to sell. With fewer homes to compete with, the really good ones can still outperform. One of the hardest things is knowing what makes a home really good and then finding one that is actually really for sale.
- 12 Weatherly Grove Brighton (Gary Yue/Halli Moore, Buxton) – approx. 760sqm land 16.76m frontage, south rear – undisclosed but circa $3m or over $3,800sqm
- 6 Bruce Street Toorak (Mark Wridgway/James Paull, RT Edgar) – approx. 865sqm land with approved plans/permits for apartments, south rear, busier street but well located – undisclosed between $6.25-6.5m or well over $7,000sqm
- 9 May Road Toorak (James McCormack/Dean Gilbert, Marshall White) – well located single fronted period home on appox. 300sqm, north rear, ready for the next update – undisclosed just under $2m
Some of the better properties scheduled for Auction on 20 October; an architect’s view
20 Edro Avenue Brighton East – Peter Kennett, Chelsea Cargill, Hocking Stuart
75 Barkly Avenue Armadale – Lachie Fraser-Smith, Will Bennison, Jellis Craig
22 Thanet Street Malvern – Tom McCarthy, Biggin & Scott
15 Derby Street Camberwell – Ross Stryker / Nick O’Halloran, Jellis Craig
- Fully renovated family home on 1,020sqm, Malvern East – circa early $4m
- Double fronted Edwardian w scope to improve, Camberwell – circa $2.3m
- Renovated two storey Edwardian, DLUG, Armadale – circa early $3m
- Development site w NOD for plans, Kew – over $4m
- Edwardian in need of renovation on 650sqm, Glen Iris – circa $2.65m
- Two storey family home with good sized garden, pool, Malvern East – circa $3m
- 4 bed Edwardian with open plan rear, Malvern East – circa $2.6m
- 4-5 bed family home with period features, Canterbury – circa $2.6m
- Renovated 3 bedroom Edwardian, close to amenities, Kew – circa high $1m
- Large Edwardian on 920sqm with indoor pool, DLUG, Alphington – over $3m
- Modern family home on 1,114sqm, walk to Church St, Brighton – circa $6m
19 Collingwood St Sandringham
19 Collingwood Street (quoted $1.6-1.76m) offered a comfortable period home on a very good piece of land. Relatively flat with no easements, we thought the land was the valuable component of the property, located in a quiet street and well located to the shops, station and beach. The home was functional enough and had been updated along the way, making it quite liveable; however, the position on the block and orientation to the south ensured the living rooms received limited natural light for most of the day. Simone Chin from Nick Johnstone Real Estate called the auction. When no opening bids were forthcoming, she commenced with a vendor bid of $1.75m. Looking like another pass-in was imminent, finally a genuine bidder emerged offering $10,000. With that, a second bidder also joined the game. Extracting bids was slow until the property was announced on the market at $1.83m, with the final result settling at $1.845m.
60 Ruskin Street Elwood
The home on offer at 60 Ruskin St Elwood (quoted $2.1-2.3m) hides its modern and stylish renovation behind an understated Edwardian façade. It delivers good family accommodation with two living zones and a huge central bathroom. Although the south one of the pair, excellent light is achieved internally through skylights and a glass rear wall up to the cathedral ceiling. While plenty of locals came to see the action just to see how the market was going in their area, a number of serious looking buyers were in the crowd. Standard bidding shyness caused the usual silence once bids were called for and Sam Inan from Hocking Stuart was forced to place a vendor bid of $2.1m. Further inaction made Sam go inside to give everyone some thinking time. Just when it looked like passing in, a surprise bid of $2.165m was placed by a young couple, followed by another couple counteroffering a further $10k. Bidder one replied equally before bidder two made a slightly larger jump to settle on $2.2m where the home was eventually passed in. Discussions continued inside and the property was sold shortly after for an undisclosed price a little higher.
As we head into Spring, we expect to see the better (or conveniently located) homes well contested. With the warmer weather, we saw increased numbers attending auctions and some very well attended inspections. If you don’t have an ‘A’ grader, these numbers should provide confidence that buyers are around if the property is priced correctly.
The biggest change we have seen this year is the faltering of the auction process, partially brought about by external influences (royal commission, reduced access to money etc) but also by overly optimistic vendors who started to believe their properties should always see higher results than the previous sales.
We believe in five-year flexibility. For most homes bought five years ago (As, Bs and even some C graders), there has been good growth. Maybe if you had sold 12 months ago, it would have been slightly higher, but, in general, the majority of homes (perhaps excluding new apartments) are worth more than they were five years ago.
As a seller auctioning your home, if you’re willing to meet the market, you should take comfort that the auction process still provides a clear process, set timeframe and transparency for buyers. However, the changing market has brought about an increase in private sales, expressions of interest and stale properties.
As a buyer, this can also be a good way to buy, particularly if you have a thorough understanding of what you need and the market you’re buying in. However, it also results in reduced transparency as each agent will have their own way of managing things (ie their own set of rules depending on the property, other buyers, similar products and vendor expectations).
You can also waste a lot of time trying to buy a home that may not really be for sale and miss other genuine opportunities.
Here’s how you can improve your chances of buying one of these homes:
- Have a good relationship with the agent (although maybe not too good; you might wind up paying $100,000 more than you have to – the agents are getting paid by the vendors no matter how friendly they are).
- Get a clear understanding of the process before you start talking dollars.
- Ensure the property is really for sale.
- Engage the services of an experienced buyer advocate.
For sellers who bought a ‘B or C’ grader more recently and need to sell now, the opportunity to make some money and/or recoup costs may not be there. As an example, 392 St Kilda St Brighton sold privately last week after passing in on 1 September. It was last sold in February (only seven months ago) for $3.09m and just sold again for $2.95m.
- 37 Hampden Road Armadale (Warwick Anderson/Holly Gillham, RT Edgar) – approx. 1400sqm, single storey, renovated period home selling for an undisclosed amount before auction – circa $8m
- 10 Queens Square Sandringham (Robin Parker/Kate Fowler, Marshall White) – approx. 650sqm well located property with pretty period façade, although ready for the next renovation to bring it back to life – 4 bidders and $2,152,000
- 7 Devorgilla Avenue Toorak (Michael Gibson/Robert Fletcher, Kay & Burton) – approx. 457sqm, with low maintenance modern home over three levels – sold after auction for an undisclosed amount over $4.5m
- 4 Wallis Avenue Glen Iris (James Tostevin/Daniel Wheeler, Marshall White) – large townhouse with basement parking, preferred northern light access and park frontage – sold at auction for an undisclosed amount in the early-to-mid 3m range
Some of the better properties scheduled for Auction on 22 September; an architect’s view
4 Gwenda Avenue Canterbury – Sally Morrison/Judy Balloch, Kay & Burton
56 Leura Gr Hawthorn East – Monica Rezk/Davide Lettieri, Marshall White
23 Fawkner Street South Yarra – Mark McKenzie/Gerald Delany, Kay & Burton
11 Newbay Crescent Brighton – Mark Staples/Gerry Gordon, Jellis Craig
- Renovated Edwardian with North rear, Malvern – circa $5m
- Development site, NRZ3, 1,370sqm, Hampton – circa $4.4m
- Period front w modern reno/extension family home, Hawthorn East – circa $3.75m
- Family home on large land, park to Yarra behind, Ivanhoe East – early $3m
- New large family home with pool, Highett – circa $2.1m
- Renovated brick 2 bed 1 bath, Hawthorn – circa $1.6m
- 1930s home to renovate or new home site, 713sqm, Hawthorn – circa $4.2m
- Renovated 3 bed weatherboard, Northcote – circa mid $1m
- Grand 1881 Terrace home w OSP, Fitzroy – circa high $2m
- Art deco looking for full renovation, 713sqm, Caulfield South – circa mid $1m
7 Devorgilla Avenue Toorak
This well positioned home offeres good spaces within a functional floorplan, with a sunny north rear aspect. Good basement garaging was another plus, although the lack of lift may have deterred parts of the market.
Around 50 people attended the auction, led by Gerald Delany from Kay & Burton. Following the standard auction rules and complimentary overview of the property, Gerald was met with a quiet audience. A vendor bid of $4.7m was placed to get proceedings started. Try as he might by pushing the value of being the highest bidder to have exclusive negotiation rights, as well as going inside to give everyone some extra thinking time, nobody was forthcoming with an offer. The property was passed in on the street, but it did not take long for an interested party to come forward and the home was sold shortly after for an undisclosed amount slightly over $4.7m.
64 Beaver St Malvern East
An auction on Beaver Street Malvern East always draws a good crowd and the auction at number 64 was no exception. More than 100 people stood along both sides of the street to watch the action for the sale of this pretty and well renovated Edwardian. The home offers spacious family living within the Gascoigne Estate, with both west and north facing outdoor options even on a south rear block.
The home last sold 10 years ago for $3.325m and has since undergone a full cosmetic update, as well as the addition of the pool.
Justin Long and Rae Tomlinson ran the campaign, with Justin leading the auction on Saturday. As he customarily does, Justin opened with an instant $5.4m vendor bid to get the action started. Although there were so many in attendance, no one was prepared to actively participate in the auction, even after a half-time break. The property was eventually passed in and remains on the market at time of writing, with an asking price of $5.88m.
It was another fortnight of good results for most of the ‘A’ grade properties, with position the key criterion that supported the properties that sold well.
Of interest, 20 Bridge Street Hampton (Michael Cooney/Melissa Grinter, Hodges) was auctioned again, the second time this year after being auctioned in late February. The property passed-in this time to a genuine bidder for $3,125,000. We believe this to be down just slightly on earlier offers; however, it still suggests that the market in general hasn’t changed too much this year.
Located in an ‘A’ grade location (walk to both Hampton & Sandringham shops/station and the beach), the home is on the south side of the street yet quite cleverly brought sun into the living area. With no downstairs bed/bath combination, this perhaps ruled out one of the main buying groups – the downsizing market.
We believe a home could sell three times in the same year and get a different result each time, depending on the combination of variations (buyer groups, other homes for sale, weather, external economic influences) in the market place. The offer at Bridge Street (while it hasn’t sold) supports our belief that the market is fairly steady.
We think it also demonstrates that if you are trying to sell a ‘price’ rather than the property, now may not be the time to do it. If vendors are planning on ‘testing’ the market at the moment, it may be better to try quietly, particularly given the costs (advertising, staged furnishings etc) associated with a campaign.
We are seeing the number of off market/private sale properties continuing to increase and there are some good properties among them on offer.
45 Sims Street Sandringham (Jenny Dwyer, Hocking Stuart) – 809sqm of north-facing land in one of Sandringham’s premier streets, high on the hill, offering a basic timber home (many may have considered knocking down) – $2,310,000 or $2,855sqm
12 Derby Street Camberwell (Jonathon O’Donoghue/Alexandra Valmorbida, Jellis Craig) – large well-located land, approx. 847sqm with west-facing rear, and an attractive Victorian façade, liveable, but ready for its next major renovation – $3,800,000 or $4,486sqm
9 Wallace Grove Brighton (David Hart/Lisa Comben, Buxton) – approximately 920sqm, north rear, far enough from the activity zone, but still close enough to easily walk to Church Street and the beach, with a sizeable weatherboard, probably more suited to replacing rather than renovating – $3,805,000 or $4,135sqm
30 Rose Street Bentleigh (Andrew Panagopoulos/Nick Renna, Buxton) – a premium block of land with a pretty bungalow façade, approximately 785sqm with the north boundary facing Allnutt Park, ready for an update/renovation – $$2,375,000 or $3,025sqm
Occasionally there are also homes that defy the market, where two buyers have decided that (potentially irrespective of other due diligence regarding choice and/or price) they must have the home. No doubt there were very happy vendors at both:
- 36 Camperdown Street Brighton (Matthew Pillios/Kate Strickland, Marshall White) – saw the highest reported sale for the week. An older home more recently undergoing a major renovation, with a very functional large family home floorplan, on the south side of the street – undisclosed but over $4,000,000
- 12 Ashleigh Road Armadale – a four-bedroom brick family home on only 348sqm saw strong competition. Compare this to 67 Northcote Road, which sold for an undisclosed amount just over $3 million the fortnight before. It was a single storey, four-bedroom home (missing the study and small retreat that Ashleigh offered) but on more land – 402sqm. We didn’t do the full due diligence on either. Both were conveniently located to shops and transport. We felt the overall flow, proportions and position was better at Northcote, yet that sold for less – Ashleigh selling on Saturday for $3,180,000
Some of the better properties scheduled for Auction on 8 September; an architect’s view
82 Guildford Road Surrey Hills – Kathy Malcolm / Duane Wolowiec Marshall White
7 Devorgilla Avenue Toorak – Michael Gibson/Robert Fletcher, Kay & Burton
64 Beaver St Malvern East – Justin Long / Rae Tomlinson, Marshall White
32 Kelvin Grove Prahran – Andrew McCann / Carla Fetter, Jellis Craig
- Original single fronter, north rear, side ROW, Hawthorn East – circa mid $1m
- Single level downsizer, close to amenities, Black Rock – circa $1.3m
- Two family homes, north rear, Sandringham – circa high $1m
- Family home, comfortable with scope to improve, Highett – circa mid $1m
- Period home to renovate or new home site, central South Yarra – circa $7m
- Renovated period home, north part of Brighton – circa $2m
- Renovated semi attached Edwardian, Elwood – circa $1.8m
- Renovated single level close to Hawksburn Village – circa $2.4m
- Golden mile family home w pool, lift, city & beach views, Brighton – circa $4.5m
- Single level renovated Victorian w OSP and Pool, South Yarra – circa $3m
- Large family home on large land, up to 4 living zones, Hawthorn – circa high $7m
- Original brick Federation home or development site (STCA), Kew – circa early $3m
5 Rooding Street Brighton
5 Rooding St Brighton delivers a fully renovated Edwardian home with North rear, in close proximity to the amenities of Bay St. Equally suited to downsizers or young families, the auction attracted a large crowd along both sides of the street in the afternoon sunshine. Similar to many auctions in recent times, once the call for offers was made by Nick Johnstone from Nick Johnstone Real Estate, he was greeted with silence even after placing a vendor bid of $2.15m to get things rolling. Buyers were content to hold back and see what would happen, not fussed about getting the first right of refusal. The property was passed in on the street. Post auction negotiations saw the home sold for an undisclosed amount above $2.2m.
12 Ashleigh Road Armadale
A four-bedroom family home over 2 levels, as already detailed above, was on offer at 12 Ashleigh Rd Armadale. Fraser Cahill led the Marshall White team for the auction with enthusiasm and it became an entertaining spectacle. Things started slowly with a $2.6m vendor bid and the customary wait by bidders before two $10k offers. At this point all looked stalled and Fraser went in for a discussion with the vendors. An offer of $5k was rejected at this stage, leading to slow bids back and forth before a sudden jump by bidder 1 to $2.7m. Back to $10k rises and consistent requests by bidder 1 on whether the home was on the market. A mix of smaller and larger bids and the entrance of a 3rdbidder finally succeeded in gaining the call “it’s on the market” at $2.86m. A flurry of activity between bidder 1 and 3 swiftly brought the value to $3.14m at which point bidder 1 stepped out. Bidder 2 came back in for another appearance with the home eventually going to the third bidder for $3.180m. A strong result!
The media might be reporting doom and gloom everywhere, but if you have an ‘A’ grade property, the market is suggesting anything but gloom. We actually think it’s a good time to buy (the right property, of course), as competition is definitely at lower levels than this time last year. That said, if you buy the wrong property you could be in real trouble if it doesn’t meet your needs and/or if you need to sell it again in the short term.
Auction numbers have been very low the past few weeks, as agents and campaigns resume after the Winter break. We are just starting to see an increase in the number of new properties hitting the net, most with September auction dates.
With many properties overpriced or not quite right (ie busy road, privacy issues, tricky flow etc), the good ones are receiving most of the buyer attention and some are being heavily fought out at auction.
What do we mean by the ‘good ones’?
- Position (as demonstrated below) as this can’t change – distance to transport, schools and shops
and a combination of the following:
- Orientation – access to natural light (this really impacts the overall feel of a property)
- Flexible floorplans – suit a variety of buyer groups (families, downsizers, couples, easy options to grow with families – single-storey homes are in particular demand)
- Well renovated – as lives become increasingly busy, buyers are prepared to pay for the privilege of moving in with nothing to do
- Unencumbered land or renovates, in the right location
That doesn’t mean that buyers will pay anything for an ‘A’ grader. The seller also needs to want to sell the property and be realistic about their price expectations. If they are searching for 10% more than last year’s highs, they may be disappointed to find themselves still in the category of home owner.
Vendors of ‘B’ or ‘C’ grade properties can also still be sellers, particularly if they are realistic about their price expectations and acknowledge their property’s shortcomings. Choosing an experienced selling agent will help achieve the desired outcome. We think this is very important. Last Saturday, six out of eight $1 million-plus Brighton East properties passed in – and five of these were on a vendor bid.
The ‘off market’ market is particularly buoyant right now and most of our time has been spent in this space looking and buying for our clients. As a seller, it can be a good way to go, provided you have the right agent and have realistic expectations, particularly as bidders at auction are more scarce right now and advertising costs can add up quickly.
Highlights over the past fortnight:
All these homes had one thing in common – position:
- 8 Rossfield Avenue Kew (James Tostevin/Sally O’Connell, Marshall White) – nestled among some of Melbourne’s prestigious private schools, this renovated bungalow with multiple bedroom options saw 5 bidders and a result over half-a-million dollars above the reserve – $3,680,000
- 32 Miller Street Highett (Angus Graham/Greg Downes, Hodges) – this ready-to-move-in, single-storey home, well located to Highett Road shops and station, had 4 bidders, and, although it passed in, sold shortly after for a new record price in Highett – $2,041,000
- 76 Sutherland Road Armadale (Susan McGlashan/Dean Gilbert, Marshall White) – on only approx. 225sqm with a two-storey terrace, not without the usual concerns re light being attached on both sides; however, conveniently located to shops and the station – undisclosed but circa mid $2millions
- 18 Barkly Street Brighton (Alex Schiavo/Janine Lum, Kay & Burton) – approx. 374sqm land, opposite the school and with a south rear, but nestled between Outer and Middle Crescents and walking distance to both Bay Street and Church Street shops with an impeccably maintained original early ’60s home. The auction saw 6 bidders and a result of $1,870,000 or $5,000sqm
Some of the better properties scheduled for Auctions on 25 August; an architect’s view
12 Derby Street Camberwell – Jonathon O’Donoghue / Alexandra Valmorbida, Jellis Craig
5 Rooding Street Brighton – Nick Johnstone / Sarah Korbel, Nick Johnstone RE
12 Ashleigh Road Armadale – Fraser Cahill / Richard Mackinnon, Marshall White
13 Larnook Street Prahran – Andrew James/James Annett, Hocking Stuart
- Renovated Edwardian home on large land, Sandringham – circa mid $3m
- Period home in need of renovation, central Brighton – high $3m
- Renovated Victorian near amenities, Hawthorn – high $1m
- Partially renovated Edwardian, Surrey Hills – circa mid $2m
- Federation family home, Bentleigh – early to mid $2m
- Tudor family home – circa mid $3m
- 90s family home in Gascoigne Estate, Malvern East – circa mid $3m
- Single fronted Victorian ready for renovation, Kew – circa $1.3m
- Renovated villa close to amenities, Armadale – circa $2m
- Single level family home, Hampton – circa mid $2m
- Dated home on good north rear land, Hampton – circa early $2m
- Renovated Hawthorne brick double fronter, Windsor – circa mid $1m
- Victorian with modern extension, Armadale – circa $8m
67 Northcote Rd Armadale
This pretty Victorian double fronter was going to appeal to both downsizers and some families with what it offered in this position. Parking at the front and rear is a real bonus, as is the excellent north-west light in the open plan living zone. The flats over the rear fence are reasonably screened for privacy in the garden.
More than 70 people came to participate or observe the Marshall White auction led by Justin Long. Immediately opening with a vendor bid of $2.7m, two parties soon entered the competition, swiftly taking the offering to $2.9m. After discussions with the vendors, the auction was recommenced without further bids, passing in to bidder two. Post-auction negotiations saw the property sold for $3.05m.
1 Fawkner St South Yarra
Conveniently located to Fawkner Park, as well as the shops and restaurants of Toorak Rd and Chapel St, this pretty single fronter with north rear was another solid offering that went under the hammer on Saturday. Renovated and well presented, with further scope to improve over time, the home gains good light via the ROW along the west boundary. OSP is available into the rear courtyard.
When Jeremy Fox from RT Edgar commenced the auction seeking offers around $1.7-1.8m, the crowd of about 40 remained silent. Eventually an opening bid of $1.6m was made and accepted. A further party entered and bids bounced back and forth to $1.78m, at which point Jeremy went inside for further instructions. Not yet on the market, the bidding recommenced, with a third bidder joining the action with bidder two. Stalling at $1.9m and again not on the market after talking to the vendors, the property was passed in on the street. Bidder three went inside for further negotiations, eventually buying the home for $1,988,888.
What should we expect for the back half of 2018?
The internet sites are full of stock for sale but much of it is old stock that has been relabelled (new agency) and repackaged (new advertising). Without a price reduction, we fear the stock will continue to grow.
The market has changed (we think to a more balanced one) and, unless the home is an ‘A’ grader, for the first time in a while vendors are needing to make some changes if they want a successful outcome.
Agent choice is likely to become more important for vendors. Unlike 2017, when most of the feedback was positive, sellers need to be prepared and willing to listen and work with their agent to achieve their sale.
One of the biggest changes we have seen this year is the reduction in auction campaigns. They have been replaced with EOI (expression of interest) campaigns and private sales.
The list of ‘off market’ homes (those without paid advertising) is growing at a staggering rate.
For many of these, vendor asking prices can be above 10% more than the highest prices achieved last year, which makes us wonder whether they are really for sale at all. Inexperienced buyers could waste a lot of time pursuing something that isn’t even for sale, or worse, overspend on a property worth a lot less. Knowing how to tell is the key.
Of the homes we have purchased for clients this year, only 53% have been bought at auction and more than 35% of those were pass-ins (most with multiple bidders).
33% have been off market, 7% before auction and 7% advertised private sale.
Having a tool kit of strategies, or an experienced buyer advocate, will help ensure you are equipped to navigate the different sale methods, no matter which method presents.
Some of the better properties scheduled for auctions on 11 August 2018: an architect’s view
8 Moorhouse Street Armadale – Carla Fetter/Andrew McCann, Jellis Craig
10 Leslie Street Hawthorn – Rebecca Scanlon/Campbell Ward, Jellis Craig
50 Lucas Street Brighton East – Barb Gregory/Alyce Fleming, Marshall White
67 Northcote Road Armadale – Sally O’Connell/Fraser Cahill, Marshall White
29 Tennyson St Sandringham
29 Tennyson Street Sandringham sits high on the hill, offering bay views from the upper storey. The Federation home has retained its period features, in combination with a sympathetic extension at the rear, done some years ago. The home offers plenty of spaces for a family (including a studio at the rear) in a prime Sandringham location close to the beach, shops and the train. Naturally, this drew quite a crowd to watch proceedings at the Buxton auction, led by Peter Hickey. Peter called for opening bids of $2.9m, which were not forthcoming. He eventually placed a vendor bid of $2.8m to get the ball rolling. Again the audience remained quiet, forcing Peter to place a final vendor bid of $2.9m before passing the property in. Discussions immediately commenced with a number of parties who expressed interest after the pass-in call. The home was sold shortly after for $3.05m.
How has the first half of the property market faired for 2018?
We see the market as more ‘balanced’ now, which is very different to 12 months ago. Stock levels and bidder numbers are both down and the market is far more discerning (and sometimes not even interested) when it comes to the B and C grade homes.
In this market, experience and knowledge counts. Being aware of a property’s history and what is happening in the precinct is becoming more important. This information is not always easy to obtain – full due diligence is up to the buyer of course as the selling agent is engaged by the vendor to represent the vendor.
Half year observations:
- Many agents do not have as many properties ‘locked in’ for spring campaigns as they did for the same period last year and we are noticing a number of changes within agencies regarding staff levels and office relocations. Buyers may have to be more patient in the coming months and perhaps not pin too many hopes on the traditionally plentiful Spring options.
- A lot more ‘stale, old or repackaged’ properties are around, some of these with their third or fourth agent/agency campaign, hoping to achieve a sale. For many, unless the change is combined with a price reduction, they may be for sale a while longer.
- Advertised quotes are being wound back on properties, and while the ‘new’ quoting laws have largely achieved the Andrew’s Government’s objective, the understanding of price and value for buyers is as confusing as ever.
- Suburban towers and/or medium density developments are having a big effect on nearby residential homes. We are noticeably increasing our time spent at council deciphering nearby proposals and how they may affect properties we are considering buying for our clients. Knowing what to look for now may prevent unknown surprises in the future.
- Off-street parking does not appear to be as coveted as it once was, and position is becoming even more important, particularly for teenage families and downsizers.
- Schooling in Melbourne continues to be a prime consideration for many families. In addition to buying close to schools (or public transport) to combat the traffic congestion, we have noticed a swing toward buying in public school zones keeping secondary schooling options open too.
- Less bidders at auction (sometimes due to the quality of offering and sometimes because vendor expectations are too high). We are also noticing less buyers through mid-week inspections.
- Money is harder to get from financial institutions and the impact of bank/government reforms for overseas buyers is starting to take effect, with much less activity from Chinese buyers in particular.
- More people are considering staying where they are – “Should I renovate or relocate?” Talking to architectural colleagues and builders, they are commenting that the enquiry is still strong.
We have many discussions with clients about their options. Having both a buyer advocacy and architectural services branch to our business allows us to have qualified informative discussions about the best options for each individual situation.
The market is quickly slowing down for Winter and the school holidays. Many agents (and Melburnians in general) are getting away from the cold for a month or so in June/July and the future is now fully focussed on the Spring market and what may be coming up for sale in August.
That said there are still a number of homes around for sale privately. Some have been around for up to a year or more, others are testing the market to see if they can still get last year’s price without the preparation, costly advertising and public auction. In amongst all of these, there is occasionally a genuine seller ready to transact. Buyers can waste a lot of time investigating these properties, however, particularly if they don’t have a full understanding of the market and the process.
In the short term buyers may see opportunities, however, in a tightening market we are likely to see even fewer properties for sale and even less of the ‘A’ grade properties (see our previous blog for more information on our thoughts regarding A, B & C grade properties https://www.woledgehatt.com.au/2-june-2018/ ).
As always, we think buying the right house first, is the most important goal. Price can quickly wear off and you may find yourself left with a bargain you won’t enjoy living in or lose significant money on if you decide to re-sell it. As a growing family, that can really set you back.
21 Hume Street Armadale (Will and Tim Bennison, Jellis Craig) – a neat, lock and leave single storey home, suiting downsizers and young professional couples, not far from our office. A narrow street, but central location – sold for an undisclosed price circa $2.8m
25 Kent Street Kew (Hamish & James Tostevin, Marshall White) – a large builder-spec styled home that last sold in 2013 for $2.2m (demonstrating the market isn’t all bad) – sold for an undisclosed price in excess of $3.2m
60 Carpenter Street Brighton (Brydie Hamilton/Bert Stewart, Buxton) – a well located, corner block, with a single level smaller home (great downsizer) – $2.9m
A standout ‘land’ buy:
8 Metung Street Balwyn (Elsa Li / William Chen, Buxton) – approx. 678sqm land buy, tailored for a ‘AAA Chinese buyer’ offering the location and street number. Had previously sold in 2013 for $1.28m, then again in 2015 for $2,111,000 – this time $2,545m
… wonder when this will be up for sale again next?
- good period home in Hawthorn, updated with garaging – circa $6m
- renovated period home with good garaging, Prahran – over $4m.
- modern townhouse, Prahran – circa $2m.
- period home, Brighton – mid $2millions
- large land (potential development site), Camberwell – $5m
- modern home with court, Brighton – $6m
- period home, low maintenance block, South Yarra – over $3.5m
7 Auburn Grove Armadale
7 Auburn Grove Armadale offers enormous potential to renovate and extend the existing period home into a family home for the next decades. More than comfortable to live in as is while developing plans, the home offers good land at the rear, including OSP from the ROW and is well positioned to amenities.
A crowd of about 40 people attended the auction led by Andrew McCann and the Jellis Craig team. Following the preamble, Andrew was met with the currently customary silence from attendees. Eventually placing a vendor bid of $3.5m, no one was prepared to enter a counter-bid and the home was eventually passed in at this level.
Perhaps this is an example of the shifting market and vendor expectations exceeding those of buyers’ for a property such as this. Quoting $3.7-3.9m before the auction, the home remains on the market, now seeking $3.695m.
11 Valetta Street Malvern
The home at 11 Valetta Street Malvern attracted over 50 people to the auction. Positioned only metres from Glenferrie Rd, the Victorian double fronter on approx. 416sqm of north rear land has recently had a full makeover within the original footprint making the home more comfortable for the short term. At some stage, the good sized land then provides opportunity to take the property further (STCA) when desired.
Hugh and James Tomlinson from Marshall White ran the well-attended campaign, with James calling the auction on Saturday. An opening bid of $2.4m was quickly received, followed by a second bidder and the 10k bids went back and forth swiftly. At $2.5m the home was called on the market, eventually settling with bidder one for $2.525m.
With almost half of the year gone, the Melbourne property market has slipped back to a more ‘balanced’ clearance rate.
We are currently seeing the following:
- Less bidders at auction (sometimes due to higher vendor expectations or quality of offering)
- Apartments and construction works are having an effect on traditional neighbourhood areas. The major planning changes of March 2017 are noticeably impacting on suburbs now
- More people are prepared to stay where they are – “do I renovate or do I relocate?” We have many discussions with clients and prospects about this, and having both a buyer advocacy and architectural services branch to our business allows us to provide the pros and cons of both options to our clients in a timely manner
A real focus now is the Spring market and what stock is coming on in a few months, as most agents (and Melburnians in general) concentrate on getting away for a month or so in June/July. That said, there is a lot happening (or properties being tested) off-market.
The market has changed and we are entering a ‘buyers’ market. The REIV clearance rate was 62% at 6pm on Saturday and 35% of the passed in properties were passed in on vendor bids.
For buyers, this may mean opportunities; however, in a tightening market we are likely to see fewer properties for sale and even less of the ‘A’ grade properties.
One question may be, what is a bargain?
For discussion purposes, if we break the properties in three categories – A, B and C, let’s focus on the things we can’t change.
We think an ‘A’ grader is a property that is well positioned, well oriented and has a functional floorplan, often fully renovated. Finding an ‘A’ grade bargain is hard. The properties are usually easy to spot and (with less choice) buyers will gravitate toward the good ones, potentially increasing the competition.
We regard a ‘B’ grader as a property that is still well positioned, has good land content and has the potential to become an ‘A’ grader with some thoughtful changes to the property. We have the ability (Adam is a registered architect who has been practising for nearly 20 years) to identify these properties and quickly work out whether they can be easily improved. He can also make quick assessments regarding zonings, neighbours, council setbacks and overlays. This has helped our clients immeasurably, as they can make timely buying decisions and they have often been able to pursue properties at more affordable price points.
The properties where we have seen the biggest change in the market over the past six months are the ‘C’ graders. Thus time last year, properties positioned well away from amenities, with homes that were poorly designed/positioned for light, often located on busy roads or with negatively impacting neighbouring properties (ie apartment blocks) were attracting as much competition and emotion as the ‘A’ graders. Buyers for these properties have all but disappeared or the buyers are now at much lower price levels than vendors. That said, the odd one has been selling, more often than not to a desperate or ill-informed buyer.
The googled definition of a bargain is ‘something bought or offered for sale much more cheaply than is usual or expected’.
Sometimes waiting for a bargain may mean you miss an opportunity to purchase the property that is going to suit your emotional and lifestyle needs.
You could hold out and wait to buy a property that has been sitting around for sale for the last 3-6 months or more. There are plenty of them around. Many of them have had asking prices well above even the top prices achieved in 2017. If the vendor expectations have changed, you may get lucky and buy a good property; however, just because it is ‘cheap’ may not mean it is the right property for you.
If it is not an ‘A’ or ‘B’ grader, consider how long you may need to hold the property until the next boom, where you may be able to see some good growth. The last boom we recall like 2017 was back in 2009 when the government relaxed the FIRB rules – that’s a long time to wait if the property doesn’t meet your lifestyle needs.
There will be some good opportunities around for buyers; however, we think it is important to buy a property that still meets around two-thirds of your key wish list, focusing on the things that can’t change. And unfortunately, that can mean waiting.
As the market continues to change, waiting to buy at the bottom of the dip may be short lived. Vendors are more likely to hold their properties and only sell if they need to; therefore, stock levels will also tighten further and, with limited choice for buyers, we could quickly see an improvement in the market and an upward trend returning towards the end of the year.
Stonnington Council saw some good results over the weekend. Some of the properties that sold include:
- 143 Finch Street Glen Iris – large family home on good land (approx. 876sqm), ready to move in with nothing to do – $4,855,000
- 18 Plant Street Malvern – smaller (as new) townhouse style property with plenty of wow – undisclosed but circa $4m
- 14 Airlie Avenue Prahran – single storey, renovated family home or downsizer with OSP for one – undisclosed comfortably over $3.5m
- 16 Chanak Street Malvern East – single storey, renovated home with garden view impacted by large apartment tower, after passing in at auction, sold well – undisclosed over $2.5m
- A number of properties for sale on large land, Hampton – $5m plus
- Corner block close to amenities, Brighton – circa mid $2m
- Period home requiring renovation, Canterbury – circa mid $2m
18 Plant St Malvern
The near new, modern townhouse on offer at 18 Plant St Malvern was always going to attract a strong crowd. Well suited to families with older children or early downsizers the home delivers space, light and very comfortable low maintenance living. Andrew Hayne called the auction in front of the 50 plus crowd standing easy in the cul-de-sac. Opening with a $3.0m vendor bid, an offer of $3.3m followed by $3.5m – clearly showing the high level of interest in this property. A third bidder entered at this point and brought increments to a more sustainable level. At $3.6m the home was called on the market with steady bidding continuing, as a fourth bidder entered the action. The property was eventually sold under the hammer for an undisclosed amount just under $4m.
14 Airlie Avenue Prahran
14 Airlie Avenue Prahran offers fully renovated family living with period features in a prime location. An oversized master suite, spacious open plan living and off street parking (note garage too narrow for most cars) are highlights. The secondary living zone is on the smaller side. Marcus Chiminello and Nicole French led the Marshall White team for the campaign and auction. With no opening bids forthcoming, a vendor bid of $3.5m was placed to get the auction started. This did not have the desired effect and Marcus was made to work hard, give everyone time to think with an early half time break and almost passed the property in when a last gasp offer of $3.52m was made. A second couple joined in and the two parties traded offers with varying speed, finally settling at $3.715m where the property was passed in to bidder two. The home was sold in post auction negotiations at a level slightly above this.
Pass-ins are becoming the new normal at auctions. The majority of the properties we attended on the weekend passed in on vendor bids, with no visible interest from buyers. Some of these were good properties – well oriented and well positioned, with good floorplans.
We also saw more than 10% of the weekend’s homes sold before auction. You may wish to question why a buyer would be willing to buy before auction in this market. If the property suits your needs, this may be a great opportunity to create certainty; however, considering the number of other buyers interested and their potential price levels is still important, to ensure an informed decision is made before making any offer. You may be the only buyer.
You don’t have to be buying or selling to be thinking about real estate. The property market is something talked about at dinners and functions (almost any occasion) and with the same passion as if talking about the football or cricket.
Talk has moved from bidding tactics at auction to ‘off market’ properties.
We note that most homes that are ‘off market’ are really only private sales. They are properties where the vendors have listed with an agency to sell their home without a marketing campaign. This can be particularly appealing for vendors hoping for a high price. If they don’t get their price, the process hasn’t cost them too much, whereas a formal advertising campaign could leave a vendor out of pocket tens of thousands of dollars.
Properties selling via private sales are not a secret, as they are still marketed to everyone on the agency database at the general price point via email or text alert advising of a special off market opportunity and usually still have public inspections.
That being said, there are still a number of genuine ‘off market’ properties floating around. Some have been around for six or 12 months, sometimes longer. Some have even increased their asking price. It is important to remember that just because everyone doesn’t know about the home, it doesn’t mean it is a good property and will suit your needs. If it does, however, having an experienced selling agent and experienced buying agent will increase your chances of buying the home.
- 9 Condor Street Hawthorn East (Michael Hingston/Geordie Dixon, Jellis Craig) – modern family home, conveniently located, bought before auction for an undisclosed amount over $5 million
- 61 Were Street Brighton (Lisa Comben/David Hart, Buxton) – family home (with polarising façade) with north facing rear, good street – bought before auction $2,850,000
- 27 Ryeburne Avenue Hawthorn East (James Tostevin/Sally O’Connell, Marshall White) – substantial, single storey Edwardian on approx. 1,196sqm – $5,200,000
- 56 Kerferd Street Malvern East (John Chartres/Tory Resic, Thomson RE) – recently renovated, large family home – $6,110,000
- 69 Irving Road Toorak (Warwick Anderson/Holly Gillham, RT Edgar) – approx. 480sqm, corner block sold for an undisclosed amount closer to $5 million or over $10,000sqm
- 31 South Road Brighton (Ivan Blow/Stefan Whiting, Buxton) – approx. 1090sqm, corner block with single dwelling covenant – undisclosed but over $3.7 million or around $3,400sqm
- 5 Norbert Street Balwyn (William Chen/Anton Zhouk, Buxton) – approx. 681sqm in the Balwyn High zone, $2.338 million or $3,433sqm
- 31 Abbott Street Sandringham (Alan McGillivray/Nick Johnstone, Nick Johnstone RE) – approx. 1,000sqm, corner block in the growth zone, $4,62 million or $4,620sqm
Some of the better properties scheduled for auctions on 2 June: an architect’s view
- Single storey, modern family home, Brighton East – $2.4m
- Townhouse, north rear, Hampton – early $2 millions
- Large land, Brighton – over $4m
- Villa unit (needing some cosmetic updating), Brighton – $1.5m
- Corner block, Hawthorn – $4m
- Family home on large land, Kew – $6m
- Double fronted home with pool, Armadale – $2m
56 Kerferd St Malvern East
A substantial, fully renovated, family home within the Gascoigne Estate was up for sale at 56 Kerferd Rd. The large spaces and pristine finishes throughout were clearly appealing to many, outweighing the impact of the south rear. The ‘move-in-now–and-enjoy’ factor was strong with this offering and the market of late has been receptive to such offerings. John Chartres from Thomson led the auction, opening with a vendor bid of $5.5m. Two bidders responded with rapid offers bringing the level to just under $6m before anyone could even catch their breath. After a quick vendor discussion, the home was announced on the market at $6.025m. This brought on another round of bids, eventually slowing and settling at $6.11m.
63 Wheatland Road Malvern
63 Wheatland Rd Malvern offers comfortable family living behind a pretty Edwardian façade. The position, north rear and up to 5 bedrooms will satisfy many families, while some may have been looking for a more functional downstairs master/bathroom combination. Once Andrew McCann got the auction underway with an opening vendor bid of $2.5m, the attending crowd was characteristically shy. With a little encouragement from Carla Fetter, a bidder responded and was soon met with competition from bidder two, steadily bringing the offer up to $2.75m. Asked if the property was on the market, the reply was positive with the next bid at $2.775m by a third entrant, which brought on a flurry of bids between bidders 1 & 3. At this point a fourth bidder quite literally jumped in and stood intimidatingly beside the auctioneer, shouting out loud and swift bids in response to all opposition. The tactic worked for him, eventually purchasing the property for $2.955m.
In vast contrast to the auctions we attended last week, we saw more properties pass-in on vendor bids this Saturday than sell under the hammer.
The REIV clearance rate for reported properties was sitting at 64% at 6pm Saturday, with 17% of the properties auctioned passing in on vendor bids. More than 10% were sold before auction.
The disparity between vendor expectations and buyer interest is increasing. We are still seeing good numbers at many of the opens we attend, particularly for the ‘A’ grade properties; however, this is now not converting into bidders at auctions for a number of properties.
Some questions that come to mind:
- Do buyers think they need to be above the price range stated on the statement of information to be successful?
- Should buyers expect sale prices to be lower than comparable homes sold in the past 12 months?
- Are vendor sellers within the quoted statement of information?
- Do vendors think the market is always going up?
Stock levels are good for May with plenty of choice, but most agents are suggesting June will see lighter stock levels, with many vendors opting to wait for Spring before selling.
A changing market can be a good time to buy, sell or upgrade. However, it is important to understand a property’s strengths and weaknesses, as well as the process you might be transacting in. It’s also important to remember that an opportunity is only an opportunity if it meets the goals you are trying to achieve.
- 2 Rouen Street Hampton (John Clarkson/Sonja Sendin, Buxton) – pretty period home in the Castlefield Estate (heritage protected), small original front rooms, updated and well located to Hampton Street shops – $2,310,000
- 33 Broadway Camberwell (James Tostevin/Nikki Van Gulick, Marshall White) – comfortable period home that could be further improved, passed in with no bids, selling afterwards over $4m
- 43 Karma Avenue Malvern East (Steve Burke/Tony Doh, Hocking Stuart) – renovated single-storey smaller home with pool, suit downsizers and younger families – $2,420,000
- 5 Rockingham Street Kew (Claire Endersbee/Sally Morrison, Kay & Burton) – approx. 747sqm, south rear – undisclosed but early $3 millions or around $4,000sqm
- 507 Orrong Road Armadale (Dean Gilbert/Nicholas Franzmann, Marshall White) – approx. 1250sqm, zoned GRZ3, west rear with older apartment block – $6,600,000 or $5,280sqm
- 57 Metung Street Balwyn (Sue Wooldridge/Julian Tonkin, JellisCraig) – approx. 649sqm, east rear in the Balwyn High zone – $2,120,000 or $3,266sqm
Some of the better properties scheduled for auctions on 19 May: an architect’s view
- Family home on large land, Kew – $6m
- Period home, well located, Hawthorn – high $3millions
- Modern, large family home, Hampton – over $4m
- Large townhouse, good OSP, walk to amenities – early $2millions
135 Victoria Road Hawthorn East
A liveable single-fronted Victorian home with good fundamentals (ie pretty facade, north-facing rear, central location) was on offer here, and a solid crowd of around 100 attended. There was a real vibe at this auction and for good reason: the quote was an enticing one and seemingly the vendor had reasonable expectations. Where else in Hawthorn East can you buy a product like this in the early $1m range? Auction started with a confident crowd bid of $1.25m, and, not long after, bidder 2 came along. Some mixed bidding increments saw the property announced on the market at $1.33m, and then sell under the hammer for $100,000 more ($1,430,000). Good result for listing agents Andrew Macmillan and Clayton Smith – bit of experience there.
2 Serrell St Malvern East
This home offers a family package in comfortable condition, having been renovated and extended some years ago. Perhaps the flow of the floorplan and proximity to Dandenong Rd are holding buyers back here. Daniel Wheeler and Clare Moloney headed up the Marshall White team at this auction, where the sun tried to glimpse through the autumn trees onto the reasonable crowd in attendance. Daniel opened with a vendor bid of $1.8m after he was met with the usual silence at the commencement of proceedings. A young family reciprocated with a $20k bid. Following a half-time break and a second bidder placing $10k counter bids, the first bidder gained pole position for further discussions with vendors when the property was passed in at $1.87m. The property did not sell after, with the vendors having far higher expectations, seeking $2.18m.