May 13, 2017
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.
Whilst there were some notable pass-ins, the solid results were still plentiful, with many homes selling well above the announced ‘on the market’ prices.
- 49 Edwards Avenue Port Melbourne (Craig Corby, Frank Gordon Real Estate) – partially updated bank home on good land (hard to imagine many of these homes were circa $1m only a few years ago) – $1.995m
- 27 Thanet Street Malvern (Iain Carmichael/Genevieve Hoyle, Jellis Craig) – a Nicholas Day townhouse with good proportions (although main bedroom still upstairs) – $3.175m
- 12 Harold Street Sandringham (Stephen Tickell/Nick Kiloh, Hocking Stuart) – modern home with courtyard style back yard – $2.955m
- 6 Kingsley Street Camberwell (James Tostevin/Charlie Tostevin, Marshall White) – well located with a thoughtful renovation – $3.55m
- 36 Clinton Street Brighton East (Bede White/Greg Costello, RT Edgar) – approx. 596sqm – elevated land with large building to north – $1.63m or $2,734sqm.
- 20 Crellin Grove Camberwell (Michael Fonti/David Gillham, Noel Jones Camberwell) – approx. 633sqm, south-facing rear – $1.9m or $3,001sqm
- 37 Prince Street Hampton (Scott Hamilton/Louise Herterich, Buxton) – approx. 650sqm, west-facing rear – $1.789m or nearly $2,752sqm
- 50 Outer Crescent, Brighton – (Nick Johnstone/Russ Enticott, Nick Johnstone Real Estate) – approx. 600sqm opposite Furbank – $3.11m or $5,183sqm
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
93 Stanhope St Malvern
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
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:
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.