Market Pulse

There was a buzz in the air today – and with so many auctions scheduled, the market overall performed well for sellers.

A standout auction we attended was 38 Kooyongkoot Road, Hawthorn (John Manton / Justin Krongold Marshall White), selling almost a million dollars over reserve. With $100K jump bids late in the piece it was quite amazing to watch really, and a similar huge result just around the corner at 3 Kembla Road a few days prior, no doubt the stage was set.

For the good properties and the sensible vendors, auctions of 6 bidders are the norm now rather than 3 bidders.

But not everything is making it to auction. A few sold before auction this week – namely 7a Maling Rd, Canterbury (Stuart Evans Marshall White) and 101 Argyle Rd, Kew (Robert Ding Marshall White) this week. Buyers certainly need to be on their toes, available and ready to buy.

Average properties (those on main roads, with tricky floor plans or having privacy issues) are still struggling though, and buyers in the main are wary. That said, applying a blanket approach to square metre rates on properties doesn’t really work. Understanding the precinct, the selling  history of the property and surrounding homes and ultimately whether it is a good or bad home are important factors to a good buying decision. Planning and preparation are the keys.

Of note in Bayside, 80 Canberra Grove, Brighton East has changed hands three times since 2009.  It was bought on the weekend for $1,849,000 after being purchased less than two years ago for $1,420,000, and before that in 2009 for $1,335,000.

65 Champion Street, Brighton (viewed by most as land only) was bought for $2,700,000, or approximately $2,900 sqm.

Two Up and Two Down

The ‘two up and two down’ topic comes up quite regularly when we discuss homes with clients, but we rarely buy these homes. Why not?

A ‘two up and two down’ home is one with two bedrooms upstairs and two bedrooms downstairs. There are often bathrooms serving each floor, and conventional floor plans of varying styles.

Aside from the conventional four-person family (not as common today as it once was), the majority of families or buyer groups are not that well suited to these homes, as parents generally want good separation from the children’s bedrooms as the family grows. Having two children upstairs and one downstairs doesn’t tend to work and is not desired by many buyers.

Compare this with a floor plan that offers one bedroom downstairs and three bedrooms upstairs. This works for four, five or even six person families, as the parents can live downstairs while the kids can dwell somewhat independently upstairs. It can also work OK when the kids leave home, as the ground floor alone is used and there is less need to clean upstairs or ‘rattle’ around in a larger home.

Beware of ‘the two up and two down’ home. While it may suit you now for a particular stage in your life, it may not in the future and it could limit the potential sellers to a small group, which can affect capital growth.

 Auction Highlights:

38 Kooyongkoot Road, Hawthorn (John Manton, Marshall White), under hammer, $5,085,000, 5  bidders

About 90 in attendance for the auction of this smartly designed (albeit a bit dated) family home in Kooyongkoot Rd Hawthorn.

The action has been really hot in this part of the world lately, I along with many others are keen to see what transpires here.

John Manton (Marshall White) is the auctioneer and he looks for a bid in the mid-to-high $3m’s. He gets it not long after and the auction gets going in moderate amounts with two bidders.

At $4,100,000 the property is announced on the market and the bidding steps up a level. There are not many bids, but I am counting five bidders over $4,500,000 and the bidding is now jumping in $100,000 increments. Now that is a sign of a strong auction!

At $5,000,000 the auction starts to wind down a little in terms of bidding and John (with a very big smile on his face!) knocks the property down at $5,085,000 – almost $1,000,000 over reserve.

Amazing – this result could be a real game changer for the Scotch Hill area and no doubt this auction will be the talk of the town today. Great result for John and co-listing agent Justin Krongold.

35 Ewart Street, Malvern (Jack Bongiorno, Marshall White), under hammer, $2,560,000, 4 bidders

Quite a good sized crowd lined the street as Jack Bongiorno took centre stage. Not wasting any time, Jack tabled a vendor bid of $2m to kick-start proceedings.

Bidder 1 jumped in at $2.025m and Bidder 2 came in soon after. At $2.15m, Jack headed inside to chat with his vendor, and to give the crowd some thinking time. Back outside, Jack advised that we were not yet at the reserve.

Bidder 3 entered the contest at $2.19m and Jack headed inside once more at $2.250m, when the ‘on the market’ question was asked.

Back outside and yes, the home was now selling.

An additional bidder joined in towards the end, albeit only briefly, and the hammer fell at $2.560m to a round of applause from the 70 or so spectators.

Kyarra Street, Hampton:

Kyarra Street has seen two homes sold in as many weeks.  Located centrally between Sandringham Village and Hampton Street, it is walking distance to the beach, shops, stations, restaurants and schools.

You may recall 6 Kyarra Street, (Hodges) a period home with good options to extend, providing options for the home to grow with the family (one of Adam’s options: https://www.woledgehatt.com.au/architectural-concepts-6-kyarra-st-hampton/

6 Kyarra sold well with six bidders for $1,640,000.

12 Kyarra (Hodges) was more than double that – similar land (approx.. 600sqm), same orientation and a real ‘WOW’ house.

Two bidders fought for it, the price settling at  $3,305,000.

Agent Opinion: How does the current market compare to others, in your experience?

Steve Tickell (Hocking Stuart, Brighton):

The current market has a definite 2009 feel about it. Buyers in their droves, not enough properties to satisfy their appetite and bidders walking away frustrated from auctions as properties go well beyond the expected price ranges.

With interest rates at an all time low, real estate consumer confidence as good as its been for some time, and a sense that prices could increase rapidly in the months ahead, there’s no doubt we are in for a hectic first half of 2015!

The hot topic of conversation at the moment is the increasing presence of Asian investors entering the market. Whatever your view, there’s no doubt they are definitely making their presence felt right across Bayside, conspicuous with their spirited bidding at auctions, and in the way they attend open inspections in large family groups. For agents they are a breath of fresh air, their enthusiasm for real estate evident for all to see, their competitive nature and keenness to negotiate a test of one’s patience and skill.

They have certainly added a new dimension to the market place, and made life for real estate agents just that bit more interesting. As if we didn’t already have enough to make life interesting on Saturdays!

Although a little hit and miss on Saturday with some properties particularly strong (18 Gowar Ave Camberwell, Scott Patterson Kay & Burton), buyers also demonstrated discernment for properties that weren’t ticking all the boxes.

Saturday’s results, combined with this week’s, will provide some direction of the market leading into Easter.

A standout land result  was 4 Bramley Court Kew (Nic Franzmann, Nikki Van Gulick, Marshall White). 610 sqm sold for $2.63m – which works out to be around $4,500 per sqm.

Intensity for the elusive family home between $1-3million appears to be continuing strongly, particularly if the key fundamentals are ticked.

While demand continues to outweigh supply, buyers may wish to increase their research strategies to maximise their chances of being the buyer.

Today, it was clear to see, after witnessing a high volume of buyers through the inspections, that the numbers have carried over into bidders, often with 4, 5 or 6 bidders competing on the goodies.

With agents continuing to say that the demand outweighs the supply, some buyers may discover that their desire to win (buy) becomes more important than trying to find the right home.

To be the buyer in this market, you need to be prepared to bid the highest amount.  However, it is important that you are still bidding on the right property, not just any property.

We often hear that auctions provide great results for vendors.

Buyers can often feel daunted by the process and led to believe that the emotion drives the price higher.

However, auctions can also be an opportunity for buyers:

Research is important when bidding at auction – as this will help you create a good strategy for the day and minimise surprises.   Research can include:

A well thought out strategy will allow you to bid with confidence and a knowledge that you should already have a good idea about what is likely to transpire.

Good homes to renovate

A question I am often asked is “What style of home is easiest to renovate?” Naturally, there are exceptions to any rule, yet there are some basic things to consider if you are buying a home so that you will have the flexibility to renovate in the future if you wish to do so.

House styles such as Californian Bungalows, Edwardians or Victorians are generally quite easy to extend, as the entry hall is a good width (encouraging good front-to-back flow), the facades are pretty, the main front rooms are well proportioned and the ceilings heights are generous.

Styles such as Art Deco or 1960s/1970s can be great if you really love that style and they can have an amazing internal feel, yet I commonly find these homes can be problematic when it comes time to alter them. Often the front hall and front room sizes are small, the ceilings are low and the front-to-back path is tricky given the compartmentalisation of the rooms (ie central kitchens block the flow).  Many of the internal walls are brick and therefore loadbearing and harder to remove. Generally speaking, most people do not find these homes present attractively to the street either. These houses are often not covered by heritage overlays, as many councils have not deemed these styles worthy of heritage protection. So it may not be worth you investing huge capital in renovating such a house, as you are unlikely to recoup this money when re-selling.

Given renovation costs are not cheap, the simpler you can make changes the better.  You would not want to alter too much of the original home either, otherwise knocking down and building new may make more sense in terms of re-sale.

Other things to look out for:

Naturally, any changes may be subject to council approval. The engagement of a good architect and/or town planner early on in the buying process really can make life so much easier later on.

Auction Highlights:

33 Dillon Grove, Glen Iris (Jason Brinkworth & Daniel Wheeler, Marshall White), under hammer, $1.805m, 4 bidders

I, along with a few others, was interested in this auction, particularly as this property was flagged for a quiet sale at the end of last year.

A relaxed crowd of approximately 100 gathered in the shade cast by the many leafy trees in this lovely family-friendly Glen Iris locale.

Auctioneer Daniel Wheeler (Marshall White) gave a spirited preamble. After a lengthy pause, anticipating response from the crowd, he muttered “I thought that sounded all right?” This got a few chuckles from the crowd. Daniel then placed a vendor bid of $1.5 million.

After a minute or two of further banter, Bidder 1 then offered a $10,000 rise. The auction skipped along ,with a few other bidders joining in and was announced on the market at $1.765 million.

When it looked like the property was going to be knocked down, Daniel asked the bidders “Are you still in?” One of the first bidders put up their hand in a relaxed way and the auction kicked into another gear.

The property eventually sold for $1.805 million (four bidders). Solid result for the vendor and listing agent Jason Brinkworth who, for many vendors in this precinct, is the “go-to” man.

10 Albert Street, Malvern East (Jason Brinkworth & Daniel Wheeler, Marshall White), passed in, $1.71m, 1 bidder

It was a quieter day at 10 Albert Street.  Auctioneer, Daniel Wheeler, opened the bidding with a vendor bid of $1,700,000 and it seemed as quickly as the auction started, it was going to end.

The crowd was spread around the peripheries, providing no indication that they were intending on bidding.

6 Albert Street, of similar land, sold in October last year for an undisclosed amount between $1.3-1.4million – a single storey home with a less conventional floorplan (the rear providing options as a self contained flat), $1.7million felt like a bold starting point.

Although the floorplan for 10 wasn’t completely modern, it offered good bedroom options and living zones, over two levels.

To Daniel’s credit he persisted and after returning from a half time break, at the death knock came a $10,000 genuine bid.

Wasting no more time, the property was quickly passed in for private negotiations.

38 Stokes St, Port Melbourne, Justin Holod (Marshall White), under hammer, $1,632,500, 3 bidders

Under a hot Melbourne sun, with the bay glistening at the end of the street, auctioneer Justin Holod took centre stage in front of a big crowd of around 80 and highlighted the many attractions of both Port Melbourne and the two storey townhouse on offer.

Looking for an opening bid of $1m, but unable to secure one from the crowd, Justin instead tabled a vendor bid of this amount.

Bidder 1 was quick now to enter and before long, bidders 2 and 3 had entered the competition.

At around the $1.4m mark Justin announced that the reserve had been met. Bidding continued strongly until the hammer came down at $1,632,500.

Agent Opinion: How is the $1m+ market shaping up for 2015?

David Hart, Buxton (Brighton):

The market has bounced out of the blocks very strongly in 2015. There is very strong buyer activity with a number of off-market sales transacting, as well as extremely large attendances at open for inspections, with pre auction offers common. I have no doubt this is being driven by the lack of quality stock available in Brighton and Brighton East so far this year. People are not afraid to make purchasing decisions for the right properties.

The $1million plus home market in these areas is well within reach of a huge portion of the market, and any well-presented, well promoted and well-priced property in this range is almost guaranteed competition.

One of the ‘first’ auction weekends for million-dollar-plus Melbourne homes – and it was a solid one.

Supply levels are perhaps not what many would have thought, and this is driving competition. All auctions we attended today had four or more bidders and the vibe was strong. It seems 2015 will be starting off where 2014 ended.

There have been more than 80 groups through 27 Golding Street Canterbury (a really well renovated period home on small land) in its first two opens – very healthy numbers for Andrew MacMillan and Nathan Waterson (Jellis Craig).

There are really only three weeks for new properties to be advertised, as 28 March is the last big auction weekend before school holidays and Easter.

With multiple under-bidders still hot to buy, it may be reasonable to assume that intensity at auctions may increase, particularly if choice remains low.

A bigger opportunity for buyers may come from those who have just bought. Unless their properties are ready to market immediately, it may be that a quiet sale will provide them with better timing outcomes than an auction date post-Easter, school holidays and the Anzac Day public holiday.

We are being advised regularly of genuine “off-market” opportunities for our clients.

Jenny Dwyer (Hocking Stuart Sandringham) commented: “Buyers through opens for property specific homes are particularly high, representing numbers more commonly seen in the eastern suburbs.”

Off markets –

There are plenty of these around at the moment:

Auction Highlights:

2 Netherlee Street, Glen Iris, Daniel Wheeler (Marshall White), under hammer, $1,790,000, 7 bidders

One of the “first” auctions of 2015 and a good crowd of around 100 turns up in light rain for the auction of this “land buy” in a leafy Glen Iris street.

With no. 7 selling in October last year for $2,020,000 (similar land size, yet north-facing rear, dual street frontage and a prettier facade and house bones), it will be interesting to see how this auction transpires – this property (no.2) looks as though it might go for 10-15 percent less. It is a level block of land and has good precedents either side to build forward on the block, which is a big plus.

As the auction starts, the rain grows heavier and the sea of umbrellas increases. Auctioneer Daniel Wheeler kicks the action off with his usual spirited preamble, a little shorter than normal, which is fair enough in this weather.

The auction starts with a vendor bid of $1,400,000 and Bidder 1 comes along with a $20,000 increase. Others join in the flurry of action and, at $1,670,000, the half-time break is taken.

At $1,680,000, the property is announced on the market and sells for $1,790,000. A total of 7 bidders put up their hands, which is an impressive number.

A good result for the vendor with an entertaining auction by Daniel and well run campaign by fellow agents Justin Krongold and Jason Brinkworth.

14 Belmont Ave, Kew, James Tostevin (Marshall White), under hammer, $4,360,000, 4 bidders

Well over 120 people gather in the front of this beautiful Italianate renovated brick home in Kew. James Tostevin gives a spirited preamble as the sun streams down, which is a welcome change from the intermittent rain that has just passed.

The auction opens quickly, as James looks for $3,400,000 and he gets it from Bidder 1. Bidder 2 comes along not long after with a $50,000 rise and, before long, it is a measured tussle between the two bidders.

Bidders 3 and 4 come along and at $3,900,000 the property is announced on the market. Some more bidding back and forth between bidders 1 and 4 and at $4,310,000 it looks like Bidder 1 will win the day. As James is about to knock down the property, Bidder 4 chips in with a call of $4,350,000 and the crowd gasps. Bidder 1, though, chips in a counter bid of $4,360,000 and that does the trick.

Entertaining auction and well run campaign by James and Andrew Gibbons – vendor should be pretty pleased here.

6 Kyarra St, Hampton, Sam Paynter (Hodges), under hammer, $1,640,000, 6 bidders

Cracker auction at 6 Kyarra today with six bidders vying for the prize under the guidance of auctioneer Sam Paynter.

The auction opened on a genuine bid of $1,250,000 in front of a huge, talkative crowd of around 100. Sam tabled a vendor bid of $1,300,000 to ease things along before a flurry of bids from bidders 1,2 & 3 really got things moving.

With a lot of entertainment from Sam, and a television crew at hand, the auction ambled steadily along and eventually the bidding slowed down considerably with perhaps around 40 bids at $1000 each.

On the market at around the $1,500,000 mark,  Sam stayed professional and patient throughout, with the keys to the home eventually handed to Bidder 6 at $1,640,000.

Architectural Insight

Lose the View to the Loo!

One little pet hate I have when inspecting homes is the inappropriate (or thoughtless) positioning of the toilets within the floor plan itself or within the bathroom. There isn’t anything nice about a toilet that is prominently on view as you walk past through a hallway or if you looking through a doorway into a bathroom, irrespective of whether it is clean or not.

I recently went through a two-storey home that had a powder room located right at the top of the stairs, and when the door was open (as it was in the this case), the toilet was on full view. A simple change to the arrangement could have addressed this (see below), and I am not sure why the designer did not consider this, as it would have been such a simple thing to do. It is much better to view a vanity by hiding the toilet behind the door swing.

Often toilets are located in open bathroom areas. This is usually OK but again rather than a central, prominent position, it is much better to locate the toilet to the corner of a room or, better still, behind a screen.

These days modern homes will have multiple toilets (sometimes matching the number of bedrooms!) and I believe it is even more important to hide them away.

When inspecting a home, designing new or renovating, really think hard about what you can see from many vantage points. Ugly aspects such as exposed toilets are not a good look, and can be detrimental to the appeal of the home. If you do happen to buy a home with poor toilet positioning, this can be fixed by changing the door swing or moving the toilet itself – but this could be costly.

Agent Opinion: How is the market shaping up for 2015?

Richard Earle: In terms of how we’ve seen the market open up, we have had very good attendances at open for inspections, and we are extremely positive we are carrying good momentum through from the last quarter of last year, particularly in Boroondara. We have seen a strong number of auctions for February, and indeed now March, and the first quarter has opened up well indeed, albeit with not a lot of auction results as yet, but certainly the open for inspections have been very, very good.

The overall dynamic for the year ahead, we think supported by the wonderful private schools, the period style homes, the great values in terms of great city access etc, all  those factors, along with our great resources, should  continue to see us surge in the market in the coming six months.