Market Pulse

Hot Mother’s Day auction: opening at $1.25m and selling more than $200,000 above the reserve price of $1.4m. Auctioneer Phillip Kingston (Gary Peer Real Estate) conducted proceedings at 42a Carrington Grove, St Kilda East.

While the reported auction clearance rate is still robust – the REIV reported a 78% clearance rate for this weekend – more properties seem to be passing in. We are starting to see some discrepancies between sellers’ and buyers’ expectations of price. Some vendors may have their price expectations a little higher than where market sentiment is for the property.

A standout for us attending auctions this weekend was the number of pass-ins. As a buyer, it’s important to know what’s happening on the street rather than read about clearance rates in the media, as raw numbers and bidder stats don’t always tell the full picture.

As an example, here is a list of properties that were all passed in at auction. Some sold afterwards and will therefore be reported as an auction sale but were they actually sold under the hammer (which many would say, is the conventional definition)?

• 51 Ranfurlie Crescent, Glen Iris*
• 49 Bellett Street, Camberwell*
• 50 Nicholson Street, South Yarra
• 10 Stodart Street, Camberwell
• 66 Claremont Avenue, Malvern*
• 20 Rose Street, Armadale*
• 103 Longview Road, Balwyn North
• 164 Tramway Parade, Beaumaris
• 3/1 Thomson Street, Brighton
• 6 Mytton Grove, Brighton
• 2 Milliara Grove, Brighton East
• 2 Quinton Road, Camberwell
• 49 Mangarra Road, Canterbury
• 36 The Ridge, Canterbury
• 4 Rowen Street, Glen Iris

* identifies those sold afterwards

The pass-in trend may increase, so it is vital that buyers have a good understanding of values and prepared negotiation strategies in place. Buyers also need to understand what is a good property in the context of the market: how much is too much?

Another trend we’re seeing is the increase of off-market properties. This may be for several reasons, including that properties don’t present in their best light at this time of year; advertising is not cheap; and off-market sales are not subject to the new quoting laws. We’re finding one-third of the properties we’re buying are off-market. Off-markets can be harder for buyers to find because you need to have a relationship with the key agent and ongoing relationships are very important. Negotiation strategies when you are emotionally involved can also be difficult.

Auction Highlights:

‘Land’ Sales:

Off-Market Properties:

With the colder weather upon us (properties right now are not presenting as well as they do in warmer months), there has been a considerable spike in the amount of off-market properties up for sale and /or selling. Those buyers gauging property numbers purely on those advertised online and/or featuring in print media may not be getting a feel of the ‘full market’.

Here is a sample of what we have been privy to this week: 

• double-fronted brick home – Hawthorn – $4m
• land – Armadale – early to mid $2ms
• large family home – Caulfield South – $3.5-3.8m
• land – Stonnington Glen Iris – $1.8-2m
• large period home on big land – Brighton – above $6m
• residential land – Brighton $3.5-4m
• large new family home Glen Iris – $3.5-3.7m

Auction Spotlights:

93 Stanhope St Malvern

John Bongiorno (Marshall White) working the crowd at 93 Stanhope St Malvern to entice a bid for this well-positioned townhouse.

This low-maintenance townhouse was aimed at the downsizer market. Well presented and with spacious living zones, perhaps the lack of a downstairs bedroom held potential buyers at bay. The home was first listed for private sale in mid-April for $2.5m. Marshall White then took the property through an auction campaign, culminating in this auction, conducted by Jack Bongiorno. Calling for bids and opening proceedings with a $2.2m vendor bid, the crowd spread along both sides of the street remained silent. The silence continued and the property was eventually passed in for $2.2m and is now advertised for private sale for $2.5m.

49 Bellett Street Camberwell

Hamish Tostevin (Marshall White) takes centre stage in front of a good crowd for this solid period home.

Bellett Street is an interesting street in Camberwell, as it features almost every domestic style of architecture Melbourne has offered. The house up for sale at no. 49 was of Californian Bungalow origin on a good parcel of land, yet the floor plan was a tricky one. The auction was protracted, opening with a crowd bid of $2.0m, which was quickly advanced by a vendor bid $100K higher. Bidding from several parties saw the auction break momentarily for a vendor referral at $2.425m, then ultimately pass-in at $2.45m. It sold after auction for $2.513m

Properties we like, coming up for sale early June:

2 Boyd Street, Albert Park – Gerald Betts/Cristina Porto, RT Edgar

5 Annadale Street, Kew – Robert Ding/Anton Zhouk, Marshall White

18 Asling Street, Brighton – David Hart/Stefan Whiting, Buxton

 49 Murray Street, Prahran – Anthony Grimwade/Oliver Booth, RT Edgar

Agent Opinion: The single-fronted period home has been one of the strongest performing markets this year in suburbs like Armadale, Prahran and South Yarra. Is this also true for your areas of focus – Albert Park, Middle Park, South Melbourne?

David Wood, Director, Hocking Stuart (Albert Park): Yes, the single fronted market is one of the strongest performing markets and has probably seen the highest growth in the last year of all types of property across our market.

 The key reason is the price range is right in the ‘sweet spot’ of price demand throughout the area and for that reason, it has also seen fierce competition from all sectors of buyers being home owners, investors, self-managed super funds and the renovators.

Auctioneer Tom Roberts (Nelson Alexander) entertains a healthy crowd at 132 Lee St, Carlton North. It was bought after auction for more than $1.1 million.

Victoria’s new quoting laws commenced this week, and there may be a short period of confusion for buyers regarding the quotes during the transition period, with a cross-over of properties listed for sale pre-May 1 and post-May 1.

Moving forward, buyers should expect, when visiting a property, to receive or sight a quoting sheet identifying (in accordance with the REIV price quoting changes and the Estate Agents Amendment (Underquoting) Act 2016):

• three comparable sales, taking into account the age, condition, size and location of the property;
• the suburb or town’s median house price; and
• the indicative selling price, which must be expressed as a single amount or a price range no greater than 10 per cent.

Comparable sales in metropolitan Melbourne must be within a 2km radius of the property and sold within the preceding six months, while comparable sales in regional Victoria must be within a 5km radius and sold within the preceding 18 months. When an agent believes there are fewer than three comparable sales that meet these parameters, they must state so. If the vendor rejects an offer above the estimated selling price, the agent is required to revise all advertising within a prescribed timeframe.

These new laws are a welcomed and overdue change for buyers, but they are only one piece of the puzzle and shouldn’t be relied upon solely when working through how to buy the home. Full due diligence will ensure an informed decision and the best outcome.

Further investigation needed when buying a house with a pool

The Victorian Government announced last week new laws that mean existing pools must be fenced, in compliance with current regulations. This must be done by 2020. Buyers should factor this in when looking to buy a house that features a pool that does not comply.

It will be interesting to see if prospective vendors act now to make their pools compliant in order to address this issue. With cost only one concern, the fencing of some older pools could be very difficult or even impossible in some circumstances. Some vendors may even need to consider filling in their pools.

Like anything, buyers should adopt the proper due diligence when buying a property. This is just another task to add to the list.

For more information, see ‘All Victorian pools will get fences: govt’  from the Herald Sun (4 May 2017).

Auction Highlights:

‘Land’ Sales:

Off-Market Properties:

Auction Spotlights:

36 Cochran Ave Camberwell

Richard James from Jellis Craig worked hard to entice a bid from the crowd in the front courtyard of 36 Cochran Ave Camberwell.

A period facade with modern renovation at the back was on offer here. The sun poked through for the auction, which was held in the landscaped front garden, with up to 100 people watching the action. There were plenty of features for auctioneer Richard James from Jellis Craig to espouse to the audience, but it didn’t seem enough to draw out an offer. After opening with a $3.4m vendor bid, he was forced to up the offer to $3.5m before eventually passing the property in on a $3.6m vendor bid. The property is now for sale for $3.8m.

15 Littlewood St Hampton

Paul Bond from Hodges received spirited bidding at the auction of 15 Littlewood St Hampton.

This home was marketed as offering access to a convenient lifestyle, being close to shops, the beach, trains and a selection of top schools. While the existing Edwardian offered an opportunity to extend and update, the 766sqm north rear site may inspire the new owners to start afresh with a family home or dual occupancy development (STCA). Paul Bond from Hodges had a good-sized crowd spread on both sides of the street to watch proceedings. Bidding commenced at $2.0m and moved swiftly among three bidders to pass reserve and put the property on the market at $2.4m. The final two bidders had to dig deep to outmanoeuvre each other for the home, eventually selling for $2.513m to the applause of the crowd.

Properties we like, scheduled for auction May 27

24 Norwood Avenue Brighton – Barb Gregory/Jason Collie, Marshall White

8a Central Park Road Malvern East – John Morrisby/Genevieve Hoyle, Jellis Craig

89 Armstrong Street Middle Park – Shane Siemers/John Holdsworth, Greg Hocking Holdsworth

29 Oak Street Hawthorn – Richard Winneke/Chloe Quinn, Jellis Craig

Agent comment: As one of the most experienced agents in the Stonnington area, what effect, if any, do you think the underquoting laws recently implemented by the government will have on the selling agents in Melbourne?

Iain Carmichael, Director Jellis Craig Armadale: The new legislation will undoubtedly provide more accurate price quoting for property buyers.

In a bouyant market, auction properties will often realise sale prices that are well above reserve prices; however, agents will now need to be more accurate when indicating likely reserves.

The changes will have little impact on those firms that are currently following best practice service delivery to buyers.

They will, however, shine a spotlight on those firms who feel that they might be able to ‘fudge arrangements’.

As an agency or a salesperson, unless you quote an ESP that reflects the vendors’ expectations/reserve price for the property, you are in breach of the new legislation.

After the Easter/Anzac Day break, we have a run of uninterrupted auction weekends ahead: will vendors be encouraged to sell and provide some good choices for buyers?

Today signals the first day of the new quoting rules for Victoria. There has been a lot of discussion and hype about this in the media; however, whether it will help or hinder buyers is yet to be determined.

If initial quotes are ‘higher’:

• Will buyers avoid inspecting properties advertised over their budget?
• Will the market rise further as buyers fight to be the highest bidder still?
• Will stock levels tighten up as vendors wait to interpret any effect?
• Will agent scripts and dialogues change at open for inspections?

In the meantime, the market has now resumed after the Easter/Anzac Day break and we have a consistent run of uninterrupted auction weekends, which will hopefully encourage vendors to sell and provide some good choices for buyers.

That said, looking forward to May 20 as the first bigger auction weekend, there aren’t too many ‘A’-graders to choose from.

Off-market sales have been quite prevalent in recent weeks, including a larger sale, circa $5.5m, in the Gascoigne Estate, Malvern East. There have also been good family home options, renovator delights and land sales transacting quietly over the past few weeks, providing plenty of options to buy.

Nearly a third of the homes we have purchased in the past six months have been ‘quiet’ sales. However, finding these properties can be difficult for buyers.

• How do you find the agents who specialise in these transactions?
• How do you know if the property is really for sale, not just testing the market?
• How do you know if the price is right?

Auction Highlights:

‘Land’ Sales:

And some land sales in Glen Iris the week before:

Off-Market Properties:

Auction Spotlights:

41 Westbourne St Prahran

Persistence paid off for Andrew James from Hocking Stuart in delivering a successful result for the vendors of 41 Westbourne St Prahran.

A good-sized crowd gathered on both sides of the street to watch the auction of this beautifully renovated period home. The property delivers on modern conveniences and luxuries in a sunny and character-laden package, all a stone’s throw away from Hawksburn Village. Andrew James from Hocking Stuart ran the successful auction, in between seamlessly directing traffic past the crowd. After starting proceedings on a $2.0m vendor bid and one bidder eventually putting his hand up, it seemed the property would pass in below vendor expectations. A second bidder joined at the last second and the two delivered spirited bidding to first put the property on the market at $2.27m, before the opening bidder succeeded in winning the property for a strong $2.51m to the cheers of the spectators.

34 Irymple Avenue Kew 

Great presentation, marketing and campaign saw an excellent result for this pretty house in Irymple Avenue, Kew.

A really good crowd of more than 100 gathered for the auction of this attractive, well-renovated Californian bungalow in a very pretty Kew East street. The stage was set – and the vendor had left no stone unturned to get a great result – with excellent presentation, great marketing and a well-conducted campaign. Auctioneer Antony Woodley walked back and forth in the street getting buyers and neighbours alike interested, and gave a concise preamble for this home. Antony looked for an opening bid and that didn’t take long – with a bidder coming in at $2m. Things clipped along constantly in $50 and $100K bids until bidder 1 dropped out in the $2.5m region. Three bidders come in to play, and the property eventually sold under the hammer for $2.48m – a very solid result. It seems there is no shortage of buyers for quality offerings, and no doubt many renovations may be undertaken in this area now, as many home owners will feel they won’t be over-capitalising.

81 Merton St Albert Park

A strong crowd braved the passing drizzle to see auctioneer Warwick Gardiner from Greg Hocking Holdsworth conduct proceedings at 81 Merton St Albert Park. More than any other type of property, Victorian row terraces have a lot of admirers but, when it comes to auction day, this admiration doesn’t translate into many buyers. Why? Terraces are not very liveable: they often need renovation but the floorplans don’t lend themselves easily to modern living – ie narrow stairs, small utility areas and lack of generous informal spaces. This property was passed in without a single bid, but sold after auction (price undisclosed).

Properties we like, scheduled for auction May 20

28 Hambleton Street Albert Park – John Holdsworth/Shane Siemers, Greg Hocking

28 Kintore Street Camberwell – Mark Josem/Alastair Craig, Jellis Craig

5 Central Park Road, Malvern East – Heather Elder/Rae Tomlinson, Marshall White

125 Linacre Road, Hampton – Rosslyn Mastrangelo/James Paynter, RT Edgar

Agent Opinion: As a very experienced agent in the Boroondara area, how are you seeing the demand for ‘land only’ purchases currently and how active have developers been in 2017?

David Gillham, Director, Noel Jones Camberwell: All land has been active, both to developers and private end users.

The overseas market is still strong. However, we have noticed a minor drop-off recently by developers of the higher density allotments suitable for apartments due to the amount of end product available and what is still yet to be built.

Camberwell is bringing $3,000 to $4,000 per sq mtr depending on location and land size.

There is still a little confusion in the public space regarding what the newish zoning really will allow and the recent about-face by the council due to public pressure has still not been clearly defined.

Hot Hampton market: a big crowd sheltered in the shade, where two young families bid for a property in Avondale St.

Those expecting the Melbourne property market to fall or flatten out will continue to wait, with yet another strong market performance this weekend. Under the weight of big numbers again, the strong inner Melbourne market held firm, with an REIV reported clearance rate of 82%. With nearly a third of the year gone, 2017 is shaping up to perform as strongly, if not even more so, than last year.

We have seen an increase in the number of pass-ins; some were sold afterwards and others are still waiting for buyers to rise to the vendor expectations, which agents suggest are on the rise. Next weekend is the last of the bigger auctions for a few weeks, as 8^th April falls in the middle of the school holidays. The Anzac holiday shouldn’t provide as much disruption this year, as it falls on a Tuesday.

Buying before auction

We are seeing more homes bought before auction. While this can be a good strategy for creating certainty, it can also be a costly one. You may pay $50,000, $100,000 or even more than any other buyer would have been prepared to pay.

Buying beforehand can help provide certainty if you know your offer is at a level where the vendor will sell. Generally, in this market, most offers will need to be at the vendors’ ‘dream’ price to stop the auction and the market is starting to show that some vendor price expectations are now well above the buyers’.

While an auction can be stressful, if you are going to venture into unchartered territory at levels otherwise not seen before, it may help in the following days, weeks and months afterward to know that someone else was also willing to pay nearly that price.

Auction Highlights:

It was also great to see the ‘Blott House’ (7 Allambi Road Chirnside Park), designed by arguably the best Melbourne architect of all time, Robin Boyd, bought by a buyer appreciative of the style rather than a developer appreciative of the land. Long live the King.

‘Land’ Sales:

Off-Market Properties:

Still quite a few of these around, here are just a few we have been privy to in recent weeks:

• Modern home with basement parking – Malvern – $8.5m

• Well renovated period home with great car garaging – Camberwell – circa $2.5m

• Dated yet good-sized separate titled townhouse with ground floor bedroom and secure car garaging – Camberwell – $2m

• Three-year-old double-storey modern home with prized north facing rear – Bentleigh – $2.5m

• Good-sized double-storey period home in an A-grade position needing cosmetic work – Hampton – $2.2m

Auction Spotlight:

8 Talbot Street Hampton

Mark Earle of Buxton Sandringham got his exercise reaching bidders spread along Talbot Rd Hampton.

A crowd of 50-plus spread far and wide along Talbot Street to remain in the shade, while witnessing Mark Earle from Buxton successfully auction this property. The home offers comfortable family living as is, or further opportunity to expand and refresh the period features, all set in 860sqm of private gardens. The proximity to amenities and schools certainly made the property appealing to young families, who bid strongly to secure the property for $2.926m, after exceeding the $2.75m reserve.

11 Retreat Road Hampton

Neighbours cheered to welcome the new family to Retreat Road at the end of the auction held by Stephen Wigley from Hodges.

A well-presented single-level family home delivering multiple living zones, good bedroom separation and a low maintenance garden with pool. Stephen Wigley from Hodges worked up a sweat in the humid afternoon, encouraging 4 bidders vying for the property. After announcing the property on the market at $2.17m, two families pushed the final result to a solid $2.245m.

Agent Opinion: As an expert who has worked in the suburbs of Kew and Hawthorn for many years, have you lately seen a change  in buyer demographics (ie where they are are coming from)? How is this affecting price?

Richard Winneke, Director, Jellis Craig Hawthorn: There is no doubt there has been a shift! We are currently seeing many buyers moving from the inner north, including Kensington, Maribyrnong and Brunswick, as well as the outer east, including suburbs such as Templestowe, Doncaster & Donvale. It does not seem to be having a direct impact on price other than just adding more buyers to the pool.

Big crowds, strong results: for good properties, the Melbourne property market continues to boom.

Strong. That is the word that best describes the Melbourne property market right now and, with underbidders at most properties, the ‘in demand’ properties (family homes and downsizers in particular) show no signs of slowing in the immediate future. While interest rates remain low and overseas arrivals (including returning Australians) stay high, there just is not enough supply of the right homes to satisfy the demand.

It seems at the moment that, irrespective of any negative aspects the property or surrounds may have, some buyers are prepared to just keep bidding to secure the property, with new records being set weekly across Melbourne.

Perhaps this is a good decision if you can guarantee that you won’t be impacted by any changes in the market or family changes that may occur in the future. While we believe it is important for our buyers to understand what might happen at auction and the levels they may need to consider, we also discuss the levels that may put them at future risk.  Stop limits are just as important, particularly if the property is not an ‘A’ grader.

Of note, there were multiple homes that achieved above $4m on the weekend

• 4 Osborne Court Hawthorn
• 684 Orrong Road Toorak
• 22 Leura Grove Hawthorn
• 2 Monomeath Ave Canterbury
• 52 The Avenue Prahran
• 45 Victoria Street Sandringham
• 10 Crest Avenue Deepdene
• 31 Mathoura Road Toorak
• 6 Webb Street Brighton
• 137 Yarrbat Avenue Balwyn
• 1-3 Palm Grove Balwyn

As we approach the Labour Day weekend, the market will take a mini-break, with minimal auction activity (and agents will catch their breath). All eyes look forward to another big auction weekend on March 25.

For those wanting to buy in the Port Phillip council area, however, March will be interrupted again with the running of the Grand Prix.

Auction Highlights: 

‘Land’ Sales:

If you design smart and build well you can do well is this market.

Of course, enlisting the services of a good architect really helps.

Take this example: 14 View Street Hawthorn (Architect, Steve Domoney – Agents, Richard Winneke/Campbell Ward – Jellis Craig) sold a few weeks ago at a mid-week auction for an undisclosed amount over $5.7m after being purchased before auction in May 2015 for $2.1m. 

From an architect’s eye, this is what we thought of the property:

 Auction Spotlight:

 31 Mathoura Road Toorak

Jeremy Fox from RT Edgar delivered an entertaining and successful auction at 31 Mathoura Rd Toorak.

About 100 people gathered to watch the auction of this well designed, light, modern family home. With the road temporarily blocked to cars by development further down the street, auctioneer Jeremy Fox from RT Edgar had a broad stage to interact with the audience who thronged both sides of the street.  After an opening bid of $3.75m, four bidders pushed offers past the reserve of $4.1m.  Joking with the bidders to entice further offers, the home was eventually knocked down for $4.115m to a round of applause from the crowd.

133 Head Street Brighton

Andrew Hayne in action at 133 Head Street Brighton – quick-fire auction, property sold under the hammer for $2.905m. Listing agent Fiona Ansell-Jones.

There was a serious vibe at this auction and fair enough – the property had a lot going for it: Edwardian facade, practical floorplan and prized north-facing rear aspect. A good crowd of about 120 attended, and a lowly bid of $2.2m (was this real?) got the auction started. It didn’t take too long for a further two parties to take place in the bidding and the property was announced on the market in the $2.6 millions. Faltering in the $2.8 millions, the two bidders went back and forth and the home eventually sold for $2.905m – a very solid result, it must be said.

Auctions we like, scheduled for March 25

6 Seymour Avenue Armadale – (Gowan Stubbings/Julia de Campo, Kay & Burton)

10 Derby Street Camberwell – (Geordie Dixon/Richard Earle, Jellis Craig)

66 Tivoli Road South Yarra – (Justin Long/Mark Harris – Marshall White)

9 Southey Street Sandringham – (Stephen Wigley/Cain Malthouse, Hodges)

Agent Opinion: As an agent who has worked in Brighton for many years, what do you see as the fastest growing market in Bayside at the moment?

David Hart, Director – Buxton Brighton: Without doubt, land. Week in, week out we need to re-calibrate Brighton and Brighton East land prices as new benchmarks are set. Anything in a convenient position, with room to build either a single home or multiple dwellings, is creating amazing competition. We had a recent land value property of 613sqm in Arthur Ave where the vendor wanted it sold quickly. After a week on the market, we had nine buyers register their interest to attend an informal midweek twilight auction, where it sold for $400,000 over reserve.

The sunny weather reflected the weekend’s buoyant market, with big crowds and a healthy clearance rate.

The first real test of the 2017 market was last weekend.  On big numbers, the market passed with flying colours, with the REIV reporting a very healthy 82.5% clearance rate on the 1168 auctions held across Melbourne.

Generally, the pass-ins on the weekend all had a common denominator – high vendor price expectations.

Auction Highlights:

‘Land’ Sales:

Sold before:

Off Market Properties:

Auction Spotlights:

112 Asling St Brighton

Stephen Smith from Marshall White Brighton ran this successful auction, with four bidders vying for the property.

About 60 people gathered on both sides of Asling St for the auction of this renovated Edwardian home, which had a traditional façade opening up to a modern living space at the rear. Stephen Smith from Marshall White reminded bidders of the many benefits of the surrounding amenities before bidding started at $1.7m. Bids climbed steadily to put the home on the market at $1.89m and to an eventual sale at a very even $2.0m.

80 Brougham St Kew

The good-sized crowd was entertained by a spirited auction run by Antony Woodley from Marshall White.

This beautifully renovated and extended period home has a long list of modern conveniences and is situated in a great location within easy walk of the Kew shopping precinct. With such a sought-after home to sell, Antony Woodley, from Marshall White, quickly received solid offers after a start of $2.3m, pushing the bidding beyond the reserve around the $2.75m mark. A fifth bidder was the eventual successful purchaser for $2.85m.

Properties we like, scheduled for auction March 18

36 College Street Hawthorn – Rocco Montanaro / Malcolm Perkins – Morrison Kleeman Estate Agents

72 Fawkner Street South Yarra – Hugh Hardy / Emily Rutherford, Abercromby’s

75 Crisp Street Hampton  – Robin Parker / Kate Fowler, Marshall White

123 Albert Street Port Melbourne – Justin Holod / Oliver Bruce, Marshall White

Agent Opinion: You’ve created a niche for yourself as a specialist in the Stonnington ‘single fronted’ property market. What sort of changes have you seen re prices and buyer groups for these properties?

Carla Fetter, Jellis Craig Armadale: I continually scratch my head on any given weekend at the results we are seeing for the premium single-fronted homes that are on offer. For instance, we sold a property a few weeks ago in Gordon Grove Malvern for close to $2m. It last sold less than three years ago for $1.45m with no upgrades being made. What I have noticed is that downsizers are competing hard for single level homes in good streets, often pushing prices above $2m. We are also encouraged by young professionals who are on good incomes but also have assistance from family to push them up in price. Ultimately it creates a ‘perfect storm’ for our sellers.

The road ahead for 2017 is looking strong: Andrew Gibbons (Marshall White) at 24 Percy St, Hawthorn.

Saturday’s auction results did not disappoint expectations of most vendors. At 6pm Saturday, the REIV reporting a 78% clearance rate on the 846 auctions held. Only 78 passed in with no bidding (around 10%).

Of the properties we saw auctioned on the weekend, those that passed in generally had:

• No obvious renovation solutions, or tricky floor plans
• Compromised positions (i.e. near commercial building etc)
• Vendors who thought their properties were worth more than the buyers did

Auction Highlights:

‘Land’ Sales:

Off Market Properties:

Auction Spotlights:

36 Morang Road, Hawthorn

A lot of pre-auction interest and a big crowd on the day here saw a big result, with this property sold under the hammer (Hamish Tostevin, Marshall White).

We attended the first open for inspection for this property some weeks ago and there were about 60 other ‘groups’ with us. That was an early indicator that this property was going to be well received, and it sure was on auction day. Hamish Tostevin mentioned to the 100-strong crowd in his preamble that he had sold about 15 properties in Morang Road (which was an interesting insight, I thought – it is hard to buy that kind of experience) and buyers couldn’t really go wrong here. The auction kicked off with a crowd bid of $1.4m, and clipped along nicely, being announced on the market at $1.53m. Bidding climbed and climbed and eventually sold under the hammer to the original bidder for a very, very strong $1.845m. Four bidders in all took part in here, mostly downsizers. The keys here? Location, single-level floor plan and easy access to a car garage at the rear. Of course, good agent work and marketing too helps … the vendor should be very happy.

52 Manning Road Malvern East

Daniel Wheeler from Marshall White orchestrated a successful auction at 52 Manning Road Malvern East.

52 Manning Road is a beautifully presented Art Deco property for either young families or downsizers and attracted plenty of the latter on auction day. Daniel Wheeler from Marshall White espoused the great location close to shops/cafes, schools, public transport and parks to inspire the good-sized crowd. Although shy at first, requiring an opening vendor bid of $1.6m, three bidders soon stepped in to push the price past the $1.85m reserve and to a solid result at $1.99m.

Properties we like, scheduled for auction March 4

31 Mathoura Road Toorak – Oliver Booth/Jeremy Fox – RT Edgar

96 Hambleton Street Middle Park – Nicholas Hoo/Oliver Bruce – Marshall White

22 Leura Grove Hawthorn East – John Morrisby/Sally Morrison – Jellis Craig

15 Whyte Street Brighton – Barb Gregory/Jason Collie – Marshall White

Agent Opinion: ‘With the strong results at the end of last year, are vendor expectations even higher now in early 2017?’

Duane Wolowiec, Marshall White: With the first ‘real’ auction weekend gone, it seems that vendors are dealing OK with market expectations at the minute.

That said, if vendors see a ‘runaway’ result they can get pretty encouraged by that and it is important often to put that into context.

In the areas I specialise in, vendors acknowledge that there will always be demand for quality properties and at present there is still a lack of supply of those.

Auctions are back for 2017: one of the best voices in real estate, Julian Augustini from Hodges, in action at 344 Hampton St, Hampton.

Welcome back to the property market for 2017.

After a strong finish to the 2016 Melbourne market, it appears likely (if open for inspection numbers are anything to go by) that the good properties will be well contested again this year.

There appears to be a greater supply of stock in many suburbs compared to the same time last year, which will no doubt be pleasing for buyers.

The number of homes auctioned on Saturday was still low: only 433 across Melbourne, according to the REIV, with an 82% clearance rate. Next Saturday will be stronger; however, it is unlikely we will be able to get a good read of where the market is heading until February 25 and March 3, which are both shaping up to be big auction days.

Some trends we have seen over the past few weeks are:

• Very good numbers at open for inspections for the properties with good fundamentals and/or that have been well marketed.
• Increased numbers of apartments and ‘off-the plan’ properties for sale.
• Off market properties continue to proliferate the market – although just because it’s off market doesn’t mean it is a good property. We would rather our clients buy a great property at auction than an average property off market.
• Improved stock levels – better than this quarter last year, which was nearly over, before it even started, because of the early Easter holiday. March numbers are looking healthy. A few agents have mentioned that their photography agencies have been so busy they have had to employ freelance staff to keep up with demand.
• Downsizer properties continue to attract very strong interest and there has been an increased number of Asian buyers inspecting property in areas of Melbourne we haven’t seen before, particularly since Chinese New Year.
• Many of properties that were still for sale at the end of last year have sold over summer, some well above their passed-in prices, such as:
  • 25 Were Street, Brighton, passing in for $2.01m, selling for $2.3m,
  • 30 Studley Road, Brighton East, passing in for $175m, selling for $1.98m,
  • 50 Childers Street, Kew, passing in for $1.5m, selling for $1.71m,
  • 19 Chatsworth Road, Prahran, passing in for $2.385m, selling for $2.6m,
  • 68 Oban Street, South Yarra, passing in for $2.2m, selling for $2.45m,

With the new quoting laws due to commence mid-year, some agencies have adjusted their quoting policies. This may make it harder (in the short term) for buyers to understand prices when comparing properties, and, for some, who simply add 10-20%, it may help fuel an already strong market and push prices even higher. Understanding values is likely to be more important than ever for buyers. Independent advice designed to achieve your goals, not the sellers’, may be the difference between success or not.

Auction Spotlights:

47 Brougham Street Kew

One of the first auctions of the year. A good crowd saw Paul Caine (Caine Real Estate) sell this property under the hammer.

One of the first auctions of the year, so a good opportunity to see what the buyer sentiment was for the opening of 2017.

47 Brougham features a neat, single-level updated timber period home with good garaging at the rear. Being well positioned to Kew Junction means it should always attract good interest, Auctioneer Paul Caine gave an insightfully preamble, explaining the definition of the word ‘Brougham’ (it more or less means ‘fortified village’, dating to the 7^th century). The 100-strong crowd seemed engaged with this, and when the auction started the opening bidder come in quickly. Not long after, bidder 2 joined in and the auction was off and running in mixed bid amounts. At $1.53m, the property was announced on the market and then bidder 3 came in late and eventually bought the home for $1.668m. If this auction is anything to go by, then the single-fronted smaller home market will do quite well in 2017 – let’s see.

29 Rubens Grove Canterbury

Doug McLauchlan (Marshall White) was the auctioneer here, where more than 100 people gathered in the leafy street to watch.

Both sides of the leafy street were filled with people for the auction of this property.  The property offers excellent potential to renovate and extend the current Edwardian, or start afresh on the 1,066sqm block (STCA). An extra wedge of land was added to the property some time ago, improving the connection to the parklands and trail along the western rear. While the crowd was large, Doug McLauchlan from Marshall White had to start proceedings with a vendor bid of $3.7m to coax out a bidder who offered an additional $100,000. The property was eventually passed in at this level, and is now for private sale for $4.25m.

Off-markets:

Properties we like, scheduled for auction on February 25:

28 Binnie Street Brighton East – Peter Kennett / Tamara Whelan – Hocking Stuart

25 Douglas Street Malvern East – John Morrisby/Ian McLennan, Jellis Craig

14 Waterloo Street Camberwell – James Tostevin/Mike Beardsley, Marshall White

81 Kerferd Road Albert Park – David Wood/Stephanie Evans, Hocking Stuart

Agent Opinion: ‘Where do you think the market will head in 2017? How are the number of buyers and properties looking?’

Halli Moore, Buxton Brighton: Buyer demand is up compared to last year and there are strong numbers at inspections. I think there has been pent-up demand over Christmas due to the lack of stock last year. Many buyers are keen to buy before auction, which has seen some strong prices achieved. We are also seeing quite a few off-market transactions. We need more stock but it should be a good year.

Auctioneer Peter Kakos (Marshall White) sold 8 Lagnicourt Street Hampton for $2.41m.

Under big auction numbers on the weekend, the property market passed with flying colours, with clearance rates solid again – the REIV reported clearance rate was 77%. While we saw many pass-ins, most properties sold by the end of the day. Do we think this is a sign of a change in the market? Not yet. At inspections during the week, many agents were commenting that vendor expectations are rapidly rising, buoyed by the strong results.  

Surely this rising market has to stop soon? This is a question that often comes up in discussions with us. Of course, nobody really knows the answer to that question. However, there is no doubt that confidence is high and there is more than one thing driving this market: low stock, slow town planning processes, increasing numbers of new buyers and many ‘wounded’ underbidders.

Who is buying and where is the money coming from? These are other questions we are often asked. Apart from traditional buyers/sellers, it comes from sources such as:

Off-shore: either foreign buyers and/or expats wanting to return home for a better family lifestyle/investment.

Downsizers: selling the big family home on large land. Wanting to stay in similar areas, they are often competing alongside first home buyers (but with larger budgets) for smaller single-storey single-fronted homes.

Investors: who feel that Melbourne property is a safer place to park their money long term, compared with shares and term deposits.

Parents: many first home buyers can’t afford (or get approval from the bank to borrow required funds) to live in the areas they have grown up in. Rather than waiting to give inheritances, some parents are contributing to their children’s purchases now in an attempt to keep children closer to them.

Growing and/or blended families: who have outgrown their smaller first homes and need the larger spaces.

Upgraders: buying larger homes and choosing to keep their smaller homes as investments.

How is the building / renovation market? In a word, flat-out. With an architectural arm to our business (we administer around six residential projects at a time), we see this first-hand. Many property owners who were thinking of buying are now working out that it is better to stay and renovate or even rebuild. Stamp duty, agent fees and advertising are big costs, and, in addition to that, there are further questions about what and where they will move to. All of our contacts (engineers, town planners, builders) have a healthy work outlook for next year. There is a backlog of work ‘stuck’ in planning that developers are waiting on to commence projects.

A big thank you for following us this year – we appreciate your support. Today’s Market Pulse will be our last one for 2016 (the Year of the Bulldog!) and we are looking forward to returning when the auction season starts again in 2017.

Auction Highlights:

Land Sales:

Auction Spotlight:

22 St James Road, Armadale

James Tomlinson (Marshall White) was the auctioneer at St James Road, Armadale, which saw bidding from five parties.

Great little single-level period home with front and rear car access, and a short walk to High Street shops and Union Street Reserve.

The facade was pretty and the rear, while very liveable, was a series of lean-to structures – all of which could easily come down and make way for an ‘easy’ extension. Auctioneer James Tomlinson gave a concise preamble and the auction opened at $2m. With quiet, timid bidding from multiple parties, the property sold under the hammer for $2.46m. Any one of the five bidders could have (and probably should have) bought this home … who says the most money always wins?

22 Warida Avenue, Malvern East

Auctioneer Damien Davis and agent Talia Tomaino (Jellis Craig) conducting proceedings at Warida Avenue, Malvern East.

The good-sized crowd at this auction surrounded and spilled into the pretty front garden to watch Damien Davis from Jellis Craig run proceedings. The 1930s home had lovely period features throughout the original front part, with a more modern rear extension overlooking the pool and alfresco area. The crowd was shy to start with, but a vendor bid of $1.7m brought out a couple of bidders. After two discussions with the vendors, the property was declared on the market at $1.96m. A third bidder tried unsuccessfully to vie for the property, before being outbid by a young family, who won the keys for $2.1m.

7 Motherwell Street, South Yarra

Gerald Delany (Kay & Burton) opened proceedings at Motherwell Street, South Yarra, with a vendor bid.

This house, with a dated renovation with good bones, north rear and OSP, was a little slow off the mark. Auctioneer Gerald Delany (Kay & Burton) opened proceedings with a vendor bid of $2.3m. With three bidders, the bidding gathered momentum when the third entered the fray. On the market at $2.531m, the final result settled at $2.675m.

Agent Opinion: How have you seen the market in 2016, and how do you see the first quarter of 2017 looking?

Stuart Evans, Marshall White: The market in 2016 has been a market starved of quality homes in Boroondara. Pent-up demand has created strong results consistently throughout the year.

The first quarter of 2017 is shaping up well. We are seeing vendors commit to a February / March campaign already. This will provide frustrated 2016 buyers finally with more opportunities to secure their family home. Well presented, well located homes will see strong interest in the first few weekends of open for inspections in late January. I believe this will culminate in strong bidding for auctions in the first quarter of 2017.

A sign of rising demand, as buyers move into neighbouring suburbs: Mathew Cox, from Buxton, fires up the large crowd at 9 Mount View Avenue in Parkdale, which saw frenzied bidding and a strong result.

Observers of Melbourne’s property market have been talking about the boom for several years. The intensity shows no sign of letting up, with buyers in 2016 increasing the intensity levels at auctions up yet another notch. The REIV reported an 80% clearance rate on the 976 properties auctioned this weekend.

We believe this booming demand is not attributable to one single factor but a combination of several, such as more expats returning home, downsizers with increasingly strong budgets (and poor performing super funds), heavy interest from overseas buyers (especially from China), rising frustration for first-home buyers and strong local investment interest.

Many buyers who began the year looking at properties are still searching, attending opens and trying to find the elusive right property within their budget that will allow them to finally enter the market.

This demand is pushing buyers into areas they may not previously have considered and we are seeing some very strong results in areas we haven’t before, such as 9 Mount View Avenue in Parkdale. This was an updated home, with a north rear with good garaging and lifestyle options on 711sqm (approx.). Situated on the east side of the Nepean Highway, where 12 months ago a result over $1 million was considered strong, it sold on Saturday for  $1.815m.

Buyers who have felt they can no longer afford to buy where they want and have moved their search further out are in part leading these strong results, as they are taking their higher budgets with them, unaware of where the property may actually sit in the overall Melbourne market.

Of course, if you’ve bought your dream home, price can very quickly fade into a distant memory. If down the track, however, you realise the home is not what you want or where you need to be, it can be very costly to start the process again, particularly if the market is not a booming one such as we are currently experiencing.

Another risk that buyers should watch out for in this racing market is the recently renovated home. Buyers should ensure they undertake full diligence to make sure no shortcuts have been taken, so there are no unwanted surprises once you have moved in.

Auction Highlights:

 Land Sales:

Off Markets:

Properties we like, schedule for auction December 10:

8 Ash Grove Malvern East – Heather Elder/Rae Tomlinson, Marshall White 

84 Bowen Street Camberwell – Scott Patterson/Rebecca Edwards, Kay & Burton

2 Dundas Place Albert Park – Simon Carruthers, Geoff Cayzer, Cayzer

27 Arthur Street Sandringham – Stephen Wigley/Cain Malthouse, Hodges

Auction Spotlight:

18 Soudan Street Malvern

Entertaining auction at Soudan St Malvern by Jack Bongiorno (Marshall White).

Picture perfect conditions at this well renovated, single level brick Victorian home in Soudan Street Malvern. This home was well located, with an easy walk to the train station and local coffee shops – Millstone and Café Claremont to name two. Auctioneer Jack Bongiorno gave his usual, spirited preamble and then kicked the auction off with a vendor bid of $3.8 million. Not long after, an Airbus 380 flew overhead impressively low, which takes the focus off Jack and bidders for a brief moment, before the auction kicked back into action. After consulting with the vendor, the property was announced on the market at $4.2m. Three bidders in all took part here , and the property sold under the hammer for $4.24m to the original bidder. 

105 Willis Street Hampton

The pool and green backyard provided a pleasant backdrop to this auction.

Stephen Tickle from Hocking Stuart held the auction at 105 Willis Street in the sunny rear garden, tempting everyone with a dip in the pool as proceedings heated up.  The large family home boasts a contemporary style, with an extensive list of technology and designer fittings. Bidding opened at $2.65m, rising steadily before stalling a $2.91m. After a half-time break with the vendors, three bidders eventually pushed the price past reserve before all were trumped by a single knockout bid of $2.98m from the successful buyer.

20 Victory Street Sandringham

Plenty of welcome shade for the auction crowd at Victory St Sandringham.

The beautiful gum trees on Victory Street Sandringham provided sought-after shade for auction attendees at number 20. Paul Bond from Hodges espoused the many benefits of the location, including the option of renovating or rebuilding, before proceedings started. A strong opening bid of $1.8m was quickly built on by back and forth bids between two bidders.  Once the first bidder stepped out, a third – and eventually the winning – bidder joined the auction. A solid finish of $2.142m for the ecstatic buyers.

Agent Opinion: What is your outlook for the early part of 2017?

Jenny Dwyer, Hocking Stuart: As we head into the new year, people are now starting to reserve auction spaces for February and March to take advantage of the ‘pre-Easter’ market. There is the expected continued demand from buyers left disappointed by the legacy of this spring market, where supply has been unable to meet demand.