Market Pulse

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

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

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

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

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

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

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

Highlights:

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

‘Land’ Sales:

 Off-markets:

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

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

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

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

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

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

Auction Spotlight:

67 Kerferd Street Malvern East

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

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

73 Stanhope St Malvern

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

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

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

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

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

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

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

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

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

Highlights:

‘Land’ Sales:

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

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

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

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

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

Auction Spotlight:

12 Stawell St Beaumaris

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

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

1 Wright Street Hawthorn

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

‘Off-market’ Properties:

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

Auction Spotlight:

10 Station St Sandringham

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

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

20 Erica St Windsor

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

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

Adam and Kristen at one of the hundreds of house inspections they undertook this year.

Some insights from the 2017 market:

• New quoting laws were introduced mid-year, really changing the game for agents, sellers and buyers
• The gap grew between the ‘A’ graders and ‘C’ graders
• Buyer focus moved even more heavily to ‘position first’
• Increased choice of ‘off market’ homes, although many overpriced
• More apartments near completion
• Lending criteria has continued to tighten
• Tighter regulations enforced for building – by planning departments and building surveyors

Our thoughts for next year?  February/March usually starts strongly, with many new buyers starting their searches; however, overall, we expect a more balanced market with competition for the good homes and fewer numbers interested in the homes with issues.

Auction numbers for the last auction weekend of 2017 were low. According to REIV records, Stonnington Council auctioned 16 homes (over $1 million), of which only six sold.

A big thank you for following us this year – we appreciate your support.

Today’s Market Pulse will be our last one for 2017 (the Year of the Tiger!) and we are looking forward to returning when the auction season commences in 2018.

Highlights:

• 6 Hollingsworth Avenue Hawthorn (Oliver Booth/Abbey Innes, RT Edgar) – large five-bedroom family home on 1,335sqm – undisclosed in the high $6millions 
• 9 Devorgilla Avenue Toorak (Justin Long/Andrew Baines, Marshall White) – two-storey home on smaller land, all bedrooms upstairs – undisclosed but circa-mid $4millions
• 37 Motherwell Street South Yarra (Mark Harris/Nicholas Brooks, Marshall White) – period home with no off-street parking and ready for further improvement –$2.8235million
• 31 Belson Street Malvern East (Rae Tomlinson / James Tomlinson, Marshall White) – 674sqm approx.., basic single-level original home period home – undisclosed in the high $2millions

Some sold and some didn’t this weekend.  Vendors of those that didn’t will most likely have to wait until January now, although, for buyers still looking to buy before Christmas, there are still some good homes for consideration.

• 23 Raynes Park Road Hampton (Scott Hamilton/Brydie Hamilton, Buxton) – an ‘Inform’ home with practical floorplan, good land and north-facing garden – passed in on a vendor bid of $2.35million
• 75 Baird Street Brighton East (Andrew Campbell/Ben Veith, Marshall White) – large, modern family home, easy walk to St Leonards and/or Haileybury Colleges – passed in on a vendor bid of $3.1million

 ‘Land’ Sales:

Land buyers looking to purchase in the Stonnington Council were void of choice, with no land options for consideration this weekend. Here are some in Boroondara and Bayside.

• 114 Summerhill Road Glen Iris (Damien Davis/Talia Tomaino, Jellis Craig) – approx. 802sqm with west-facing rear – undisclosed around $2million or $2,600/sqm
• 29 Victoria Street Sandringham (Jenny Dwyer/Stephen Tickell, Hocking Stuart) – approx. 1833sqm, north-facing land (irregular shape) with dated home placed awkwardly on the block – undisclosed around $5million or $2,650/sqm
• 15 & 15a Fordham Avenue Camberwell (Julian Tonkin/Sue Wooldridge, Jellis Craig) – approx. 766sqm backing onto Frog Hollow Reserve – $2,560,000 or $3,342/sqm

Auction Spotlight:

1/69 Denbigh Rd Armadale

James Tomlinson from Marshall White works the crowd for the successful sale of 1/69 Denbigh Rd Armadale.

A unique church conversion was on offer at 1/69 Denbigh Rd Armadale. Well positioned to amenities, this three-level townhouse is one of eight in the group. The property could suit downsizers with a downstairs master, while also appealing to a younger demographic with two further bedrooms and multiple living zones. James Tomlinson from Marshall White led the auction in front of the church façade, immediately starting with a vendor bid of $1.4m. It looked like the auction would not take off, but, after giving everyone time to think with a quick break, two bidders finally moved things along to $1.625m. With another vendor discussion announcing proceedings very close, the home then went on the market at $1.63m, bringing out a third bidder. Eventually the property was fought out between the first and second bidder. Bidder two was the eventual winner with a couple of $5k bids unsettling the competition more focused on thousands, purchasing for $1.681m.

2 Cross St Toorak

The front garden was a picturesque backdrop for the auction of 2 Cross St Toorak, led by Gerald Delany from Kay & Burton.

2 Cross Street Toorak offers a large 1930s family home on 613sqm of east rear land. Comfortable enough to live in, yet offering future options into this well positioned part of Toorak. A decent crowd of 30-plus people sought out the shady spots in the front garden for the auction. Gerald Delany led the Kay & Burton team and, after the preamble, quickly started proceedings with a vendor bid of $4.3m. Two bidders slowly took the property up to $4.47m before this was taken in to the vendors. Not yet on the market, a third bidder entered the action, mainly against bidder two, eventually slowing things down with $5k bids. The property was passed in at $4.505m, with negotiations taken inside. Sold after.

Kristen and Adam analysing the properties available in the lead-up to Christmas.

Saturday was only the third weekend since the market resumed for Spring where we saw the number of properties auctioned exceed 1000.  Of the 1275 properties reported to the REIV at 6pm on Saturday, the clearance rate was 69%.

This is also the first clearance rate dip under 70% for the same time period. The market has definitely lost some of the ‘heat’ we saw earlier in the year. That being said, the quality/flexibility of the home will also have a big influence on the outcome and if it ticks the key boxes (great position, flexible floorplan and ready to move in), buyers need to be prepared for strong competition. This weekend, the overall quality was average.

Vendors who think that buyers who need to buy something before the end of the year will pay ‘anything’ may need to reconsider or they will still be ‘owners’ of their homes as they move into 2018.

Where the market is generally slowing at this time of year and new properties start to dribble onto the internet, we have been surprised to see new listings still in volume. Add the ‘off market’ homes to the pool and buyers can see choice. With choice comes discernment.

As we move into 2018, if the choice remains, then we may start to see a return to a more ‘steady’ market place with more differentiation between the quality homes and the rest.

Highlights:

‘Land’ Sales:

Properties we like from an architect’s perspective, auctioning before Christmas:

26 Edward Street Sandringham – Adam Saunders/Romana Altman, Buxton

12 Cole Street Brighton – Myles Howell/Barb Gregory, Marshall White

39 Ryeburne Avenue Hawthorn East – Campbell Ward/Chloe Quinn, Jellis Craig

37 Motherwell Street South Yarra – Mark Harris/Nicholas Brooks, Marshall White

‘Off-market’ Properties:

 Auction Spotlight:

76 Hawksburn Road South Yarra

Daniel Wheeler from Marshall White working the crowd to entice a bid for 76 Hawksburn Rd South Yarra. The property passed in on a vendor bid of $1.6m.

This property is a pretty, renovated two-bedroom Victorian home. The opened-up rear delivers easy inside-out flow to the low maintenance courtyard. While there is no OSP, the home is well positioned to Toorak Rd and Chapel St, almost eliminating the need for a car.  The property should appeal to downsizers and there were several in attendance for the auction. Daniel Wheeler from Marshall White worked hard to lift the crowd, after starting proceedings with a vendor bid of $1.6m. The property had been marketed with a range of $1.6-1.76m, so this opening was no surprise, but no-one was prepared to meet the vendor expectations at this stage. The home in now available for sale at $1.785m.

51 Hawksburn Road South Yarra

Auctioneer Mark Wridgway of RT Edgar conducts a professional, no-nonsense auction and brings the hammer down at $2.261m.

A neat townhouse, well-designed by architectural draftsman Brett Gilbert, the south side of the pair. Position is a convenient one, and that underpinned the package well. A modest crowd looked on here in hot conditions, and respite was taken under every available tree. Opening with a crowd bid of $2m, the auction clipped along at an even pace in mixed bidding increments. Announced on the market at $2.23m, bidding started to falter and the property sold to bidder two for $2.261m. Good result for buyer and seller.

76 River Street South Yarra

A beautiful day for a courtyard auction in South Yarra: Hugh Hardy from Abercromby’s at 76 River Street South Yarra.

Adam and Kristen in our new Brighton office.

The market is becoming more confusing for buyers.

We are often seeing lower numbers of bidders at auctions; however, if the property is very good or has been quoted low, it is not unusual to see four or five bidders or more, although usually a couple of these fall out of the competition fairly early into the bidding.

Confusion is continuing with regard to quotes, price and value. We are still seeing some properties advertised without the Statement of Information sheet and some properties not being announced ‘on the market’ anywhere near their advertised quotes.

The REIV reported a clearance rate at 70%. This doesn’t accurately reflect the number of homes sold ‘under the hammer’. There are number of properties reported as ‘sold at auction’ that have been passed in on the street and sold afterward in private negotiations.   There are also a number of auctions (many that haven’t sold) that aren’t reported at all.

Next weekend, 25 November, is shaping up to be another really big weekend and the run to Christmas, which is only five weeks away, looks to be a frantic one. As well as properties advertised for auction, there are also an increasing number of homes available for private or quiet sale.

Some vendors may be starting to feel a sense of urgency to sell before the long holiday break. Many of the prices asked for these homes are particularly high, with a view that if that price is not reached, the vendor will try again next year. Unless the market surges again strongly when it resumes in 2018, we are not sure the asking prices will be achievable next year either.

Given the high amount of transactions in the past few weeks, there are a number of homes that will come onto the market as successful buyers now look to offload their previous homes. These sellers can provide great opportunities for buyers looking to buy before Christmas, as the vendors may prefer to try and sell quickly, minimising their risk of any market fluctuations that can occur during extended breaks.

Auction Highlights:

‘Land’ Sales:

New office

Our second office is officially open for trade at 5/279 Bay Street in Brighton, making it easier to help our Bayside clients buy their next homes.  You can’t miss us: we’re next door to the chemist and not far from the Asling Street roundabout.

If you are in the area, please call in and say ‘hi’.

Some of the better properties, due to auction on December 2 

6 Hollingsworth Avenue Hawthorn – Oliver Booth/Abby Innes, RT Edgar

7 St Killian Street Hampton – Jenny Dwyer/Will O/Brien, Hocking Stuart

38 Alice Street Malvern – Tim Derham/Kate Cusack, Abercromby’s

11 Gwendoline Avenue Bentleigh – Gerry Gordon/Ivana Dobro, Jellis Craig

 ‘Off-market’ Properties:       

Auction Spotlight:

64 Mason Street South Yarra

An Andrew Macmillan auction is always an entertaining one, and this was no exception. Although it passed in, this property sold soon after for $3.075m.

A nicely renovated and extended home in a fantastic location was on offer here at 64 Mason Street. Toddlers were able to wander freely in the quiet street as auctioneer Andrew Macmillan gave a concise and very entertaining preamble to the crowd of about 30 people. The auction did open with a crowd bid of $2.7m, but this was fairly quickly countered with a vendor bid of $2.9m. Bidder 2 offered a $20K rise. Bidder 3 joined in soon after, yet the property was passed in to bidder 2 at $3.02m. Not long after, the property sold for $3.075m, which was a solid result, we thought, given next door (an unrenovated version on similar land) sold for $1.85m only a couple of weeks ago. We know architects can be expensive, but…

49 Mills Street Hampton

Robin Parker from Marshall White put on an entertaining auction in the pretty front garden of 49 Mills St Hampton.

A good-sized crowd was drawn to this well renovated original Hamptons-style home. Positioned well to the shopping precinct, schools and transport, plus a good-sized north rear, made this an attractive package for potential buyers. Robin Parker and Kate Fowler from Marshall White welcomed everyone into the pleasant shade of the front garden for the auction. An opening bid of $2.2m was quickly received from a gentleman on the phone before a vendor bid of $2.3m was placed. At this point, all was silent and Robin was made to work hard, including a chat to the man on the phone, but was unable to draw out a bid. Eventually a second bidder came in, and there was a quick discussion with the vendors, followed by a further two bidders, with the price working up to $2.555m. A fifth bidder stepped in briefly for a couple of bids before the final battle between bidder 1 on the phone and bidder 3. The vendors seemed to have higher expectations and the property was eventually passed in to the man on the phone for $2.61m. The home was sold in post-auction discussions for the same price.

Good properties sold well on the weekend but stock levels remain low and buyers may need to fight harder for the better homes.

Under the weight of numbers, the Melbourne property market held up well, with the REIV reporting a 73% clearance rate at 6pm on Saturday.

Numbers at auctions were healthy, we felt, and the good properties sold very well, with multiple bidders, and the prices continue to rise.  With lower stock levels, buyers are fighting harder for the better ‘completed’ homes, good renovation options and well-located land opportunities.

Vendors hoping buyers might continue paying ‘A’ grade prices for ‘B’ and ‘C’ grade properties (as they were earlier this year) may need to adjust their price expectations if they want to see ‘sold’ stickers on their boards, as the gap between the goodies and those that are overpriced (and/or have been advised by agents they will get high prices) or with issues begins to grow. As always though, the price quote and skill of the agent/agency remains all-important.

Highlights:

Of note, there were 20 reported homes sold last week over $4 million, many with multiple bidders – some of the bigger ones include:

• 2 Elwood Street Brighton – over $5,500,000
• 33 Grant Street Malvern East – $6,125,000
• 10 Russell Street Camberwell – toward $5,500,000
• 25 Munro Street Armadale – $6,050,000
• 82 Argyle Road Kew – $5,800,000
• 3 Wandeen Road Glen Iris – $5,355,000

‘Land’ Sales:

Some of the better properties, due to auction on November 18

64 Mason Street South Yarra – Nathan Waterson/Andrew MacMillan (Jellis Craig)

5 Lorac Avenue Brighton – Andrew Campbell/Ben Veith (Marshall White)

22 Burns Street Elwood – Nick Jones / Torsten Kasper (Chisholm & Gamon)

14 Harts Parade Hawthorn East – Nick Elmore / Tim Mursell (Hocking Stuart)

‘Off-market’ Properties:       

Off market properties are around in volume at the moment, but they aren’t necessarily priced to sell:

• Larger townhouse, Malvern East – over $4,500,000
• Single fronted home, Hawthorn East – early $2millions
• Family home, Brighton – $4,500,000
• Renovated, well located smaller home, North Brighton – early $3millions
• 90s home, good land, Glen Iris – high $2millions
• Family home, Malvern East – early 3millions

Auction Spotlight:

54 Lucas St Brighton

David Hart from Buxton led the auction, which gave the new owners a solid family home in one of the best streets in Brighton East.

This home offers comfortable family living, although looking for a freshen-up, with four ensuited bedrooms, combined with formal and informal living zones. The home is positioned well on the 654sqm block, allowing for opportunities to add an entertaining area and potentially a pool (STCA) positioned to catch the afternoon sun within the good-sized south-rear garden.  As a mortgagee auction, David Hart from Buxton had clear instructions from the NAB to sell at a certain level. An optimistic opening bid of $1.8m and then $1.9m was quickly followed by a vendor bid of $2.4m to bring proceedings to a more acceptable level. A third and fourth bidder soon joined in, before some retreated. Bidder 3 tried to seal the deal with a larger jump, which brought the property on the market at $2.7m and was eventually successful at $2.71m.

10 Russell Street Camberwell

Hot price and hot auction: 10 Russell St sold for well in excess of half a million dollars over reserve.

Under the canopies of pretty plane trees in Russell Street stood a solid crowd of around 100 people for this auction, which was clearly going to be a good one. The house ticked a lot of boxes and got the formula right with a lot of bedroom accommodation (six toilets would you believe!), a pretty facade and an A-grade Tara Estate location. Auctioneer Sam Wilkinson gave a concise, no-nonsense preamble and it didn’t take long for crowd participation here after the initial ‘beautiful’ $4m vendor bid. Two bidders back and forth at $50K bids, and the property was declared on the market at $4.75m. Bidder 3 joined in later around the $5m mark but bidder 1 prevailed, buying the property under the hammer for $5.35m. Hot price and hot auction – vendor must be very pleased. Not a bad return after buying the home unrenovated in late 2008 for around the $1.5m mark.

Spring auction season in full swing. Securing the good properties is still hard for uneducated buyers.

Welcome back to our newsletter and the last quarter of 2017. The real estate market has returned with signs of continuing strength: there were good numbers through Saturday’s opens and some queues for the better homes. The weekend of 28^th October is usually a high-volume auction weekend and the results are likely to provide direction for the remainder of the year. There is a mixed variety of homes on offer – some tick most of the PPP boxes; however, there are also a number with some compromises (ie tricky floorplan, orientation, slope, location concerns). Depending on where the buyer focus lands, we may see a mix of stronger results along with some pass-ins – particularly if vendors have high expectations.

The increased volume could result in a number of homes also being sold before auction.  The opportunity for certainty can be comforting for buyers, but research and caution should remain. Waiting until auction day could save you a lot of money.

We have noticed mixed results when comparing the sold price with the quoted price range provided at the beginning of a campaign. More often than not, agent selection for similar properties has so far been accurate, but the results have been more varied. At the start of this year, it was considered normal for most properties to sell above the quote range.

But recent results are far more mixed: some homes sell well above the range (although usually with reserves at similar levels), some sell accurately within the range, and an increasing number are selling below the quote range, including some of our highlighted properties this week.

The takeaway message for buyers is that just because quotes are far more accurate, it doesn’t follow that the outcome will be predictable. While the quote can be a guide, understanding smaller nuances within the market, such as precinct demand, buyer demand, property competition, and impact re zoning regulations, may help avoid the disappointment of missing a home that has sold within your range.

Highlights:

‘Land’ Sales:

‘Off-market’ Properties:

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

2 Elwood Street Brighton – Robin Parker/Kate Fowler (Marshall White)

21 Albion Street South Yarra – Walter Dodich/Zoe Ho (Kay & Burton)

1 Ardene Court Hawthorn – James Tostevin/Sally O’Connell, (Marshall White)

4 Keats Street Sandringham – Jenny Dwyer/Stephen Tickell (Hocking Stuart)

Auction Spotlight:

 39 Llaneast Street Armadale 

James Tomlinson led the Marshall White team for the successful auction of 39 Llaneast St Armadale.

This home is an Edwardian waiting for a thorough renovation. Additional touches to an already strong offering include that it is well positioned in the cul-de-sac part of the street with good 11m frontage, as well as side ROW to off street parking.

This auction was a family affair, and the Tomlinson clan, plus more from the Marshall White team, had a good-sized crowd to work with at the auction. Following an opening vendor bid of $1.6m by James, a couple of bidders steadily moved things along to bring the property on the market at $1.88m. With a third bidder engaged in vying for the property, bidding continued and finally settled at $1.895m for a very happy-looking young couple.

Demand remains strong for properties in good locations and with excellent potential.

28 Connell Street Hawthorn

The Fletcher family was made to work hard at the late afternoon auction of 28 Connell St Hawthorn, which passed in at $1.75m.

A pretty façade portrays the potential for this freestanding Victorian home in one of the best positioned streets in Hawthorn. Extended previously, the home is now ready for its next renovation (within its heritage overlay parameters). This overlay, combined with the existing extension, may have held prospective purchasers back at auction time.

Mark Fletcher from Fletchers Real Estate led the auction, with support from father Rob, brother Gary, and the rest of the team, in front of a crowd of about 60. With the usual silence greeting the auctioneer once the call was made for bidding, Mark was forced to place a vendor bid of $1.7m to start proceedings. A bid of $1.75m was eventually received, which saw a short break for discussions with the vendors. No further offers could be extracted from the crowd, so the property was passed in at this level. The property remains on the market.

Negotiation with the agent doesn’t just happen on auction day. Kristen talks to Geordie Dixon, a newly made director and a proven performer at Jellis Craig Hawthorn.

The market has shown signs of fragmentation over the past month.

There is no doubt the good properties are still being hotly contested (and continue to create new price records) and this is likely to continue while there is a shortage of quality family homes and smaller single-storey homes for buyers to choose from. However, should the property be problematic in some way, or have a high vendor, or a combination of both, the buyers are showing discernment. The quoted price is all important to these selling.

There is additional pressure on the agents now to get the quote right. We have been through a number of good homes that haven’t had the volume of buyer inspection expected. Many buyers still think they need to add 10-20% or more to the quote and are avoiding the properties altogether.

Buyers should remember that the quote is only one piece of the puzzle. There are some good opportunities for buyers at the moment if they know how and where to look.

Of interest also is the increasing number of homes sold before auction, leaving some buyers disappointed if they aren’t prepared to move quickly. This week in particular there were a very healthy number of ‘bought befores’. As a buyer, this can be good way to go, so long as you are comfortable in your mind of ‘value’. In this scenario, you could quite easily pay several hundred thousand dollars over what you may need to at auction day if you have not thought through your strategy.

Some ‘bought befores’ of note:

• 16 Downes Avenue Brighton (Kate Strickland/James Redfern, Marshall White). Large family home on big land (approx. 923sqm), ready for next update or potential new build site – sold before auction – undisclosed amount over $4m.
• 11 Urquhart Street Hawthorn (Richard Winneke/Campbell Ward, Jellis Craig). Solid original home that had been renovated in the past and in tasteful order. Undisclosed price around $3.9m.
• 8 Hansen Street Kew (Stuart Evans/Duane Wolowiec, Marshall White). Generous block of 745sqm approx. with a neat MCM house – south-facing rear and slope considerations – undisclosed price around $3m.
• 6 Newbay Crescent Brighton (Alex Schiavo/Nathan Berrill, Kay & Burton). Approx. 712sqm, west-facing rear, convenient spot between Bay Street shops and the beach – sold before auction $3,560,000 or $5,000/sqm.
• 129 Peel Street Windsor (Guy St.Leger/Tom McCarthy, Biggin & Scott). Approx. 328sqm, north-facing rear and generous frontage. Sold for a very healthy $2,056,000 or $6,268/sqm if you placed no value on the house.
• 5 Stoke Avenue Kew (Sophie Su/Daniel Williams, Marshall White) – $5,580,000. Period reduction builder-spec home, 927sqm approx. north rear.

With limited auctions until after the Grand Final, we will return with our updates in mid-October. October 28 is shaping up as a very big auction weekend for buyers and sellers alike, with these properties to go online to the public in two to three weeks’ time.

Happy holidays, if you’re managing an opportunity to escape the lingering cold, and ‘Go Tigers’!

Auction Highlights:

‘Land’ Sales:

‘Off-market’ Properties:

Auction Spotlight:

27 Wheatland Rd Malvern

In front of a good crowd of 60-plus, five bidders vied for the rights to the keys for 27 Wheatland Rd Malvern, where Justin Long from Marshall White led the auction.

This property is a desirable offering with its direct access to Milton Gray Reserve at the north rear. The home itself is a classic Edwardian at the front with a comfortable, yet dated extension at rear, offering solid scope to take this home to the next level with a future renovation (STCA). Obviously many could see the potential and were keen participants in the auction held by Justin Long from Marshall White. Immediately starting with a vendor bid of $2.7m, three bidders quickly brought the offer to $3.05m, at which point the question was asked if the property was on the market. Returning from a vendor discussion with the answer of ‘not quite yet’, the auction resumed to swiftly hit the desired level at $3.1m. This news brought in bidder four, who was, however, unable to keep pace once bidder five joined. This left bidder one and five to fight it out alone, with bidder one the eventual victor, securing the property for $3.4m. A strong result, well above vendor expectations.

27 Sandringham Rd Sandringham

David Picking from Hocking Stuart was made to work hard at the auction of 27 Sandringham Road Sandringham, securing a sale with post-auction negotiations.

This is a pretty timber Edwardian, looking for the next renovation, in a sensational location. There was, however, buyer uncertainty with the development due to take place along the north rear boundary. David Picking from Hocking Stuart held the auction on behalf of the team and got things started with a vendor bid of $1.5m. It was slow going, with two bidders going up first in $10,000s and then in $5,000s. At $1.55m, David went inside to confer with the vendors, who were not prepared to part with the property at this level. No further bids could be teased out of the bidders once at $1.575m and the property was passed in at this level. Post-auction negotiations managed to secure the sale for $1.61m.

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: