Fresh Market News

April 12th & 13th Weekend, 2008. Melbourne.

Overall Clearance rate: 63% on 597 properties to auction.
Expected clearance on an average Saturday's offering.

Million Dollar Melbourne.

Mal James Principal Buyer Agent 0408 107 988.

More and More are seen as Less and Less.

OVERVIEW
Houses
The big test will be next week as there are many houses in the million dollar bracket up for auction.  But the facts are clear in our mind – the market is continuing to turn dramatically from last year. If the market views a home as less than perfect or overpriced, it will attract little  interest. However quality, well priced homes in this bracket are still doing what they did last year – sell well.

As we said last week some “fringe” suburbs are proving difficult for sellers eg Balwyn North and Brighton East (see below). It’s not that these are less than great suburbs it’s just people in many cases are not prepared to pay Balwyn or Brighton prices like they were last year.

 

AUCTIONS LIVE
We attended a number of auctions over the weekend – below are 2 auctions

11 Lawson St Hawthorn East -  A Property We Rated 775 out of 1000 (click here for full rating)

We viewed 11 Lawson St Hawthorn East and rated it quite highly but as land only 775/1000. However the quote seemed high with $1.8million being the top end of the range. The home was built late 70’s/early 80’s but had some drawbacks associated with that era – dated decor, small rooms, less than perfect floor plan. We could not see how renovating the existing property made any sense and therefore overcapitalisation was a real chance if you paid too much for the land and built again. The auction itself was attended by around 70 people and in our opinion it felt like there were buyers there, but nobody bid. A number of vendor bids from Jeff Gole (who is a good auctioneer) and no interest from the street resulted in a pass in at $1.6M. It did sell in later negotiations at $1.687m.

 

 

37 Illawarra St Hawthorn -  A Property We Rated 696 out of 1000 (click here for full rating)

Alternatively another good property 37 Illawarra St Hawthorn on Scotch Hill rated at 696/1000 – auctioned by Tim Fletcher from Fletchers (another very experienced auctioneer) had a very strong result at $2million. The auction was very well attended as it should be for a property on Scotch Hill without freeway noise. Being picky you could say that despite the land size it was a trifle narrow for what will eventually be a $3-4million home. Also being picky you could say the neighbours dominated the site a little – however Adam (James Architect) outlined an ingenious way to design for a narrow block and make the neighbours work for you in terms of street presence. This is a selling agents saying of “quote em low watch em go” applied. At $1.5million the quote was always $200,000 to $300,000 under the minimum expected even in this shifting market. We estimated the property at minimum $1.8m prior to auction (based on previous sales) and said it may get $2m if it was a strong auction. It was a strong auction and it did get $2m. So did the buyers get a good buy? We still think yes and we still think that a $1 to $1.5million dollar home (needs to be well designed and finished) will go well in an area close to transport and a number of private schools and a street that has Kooyongkoot Road as its neighbour.

So why did a property rated we rated slightly more lower get a better price? The market. That is why you must have a two pronged strategy – one if you really want to buy it and you have competition (Illawarra) and one if you don’t have competition and don’t want to pay a huge price (Lawson)

 

MILLION DOLLAR SALES (all results can be found at REIV)

ALBERT PARK
S 35 St Vincent Pl B 7rm 289sqm $3,005,000 Bennison Mackinnon
PS Hambleton St $1,610,000 Hocking Stuart
ARMADALE
PI 12 Denbigh Rd B 7rm 780sqm undisc res undisc Abercromby's RE
PI 11 Denbigh Rd B 8rm 907sqm $2,500,000 VB res undisc Bennison Mackinnon
PI 66A Adelaide St B 6rm strata $2,500,000 VB lo $2,580,000 res $2,750,000 Jellis Craig
BALWYN
S 35A Burroughs Rd 7rm $1,020,000 Noel Jones
PI 56 Narrak Rd BV 8rm 589sqm $1,550,000 VB res $1,629,000 Jellis Craig
BALWYN NORTH
PI 17 Tormey St BV 9rm 1082sqm $1,350,000 VB res $1,425,000 Jellis Craig
PI 346 Balwyn Rd 8rm 1018sqm $940,000 VB lo $950,000 res $1,000,000 Noel Jones
PI 377 Belmore Rd BV 12rm 695sqm $1,050,000 VB res $1,150,000 Marshall White & Co
PS Longview Rd B 9rm 656sqm $1,120,000 Eastfield RE
BEAUMARIS
PS Bruce St BV 7rm $1,240,000 Buxton/Beaches Real Estate Pty Ltd
BENTLEIGH
PI 7 Smith St B 8rm 676sqm $1,050,000 VB res $1,325,000 Woodards
BRIGHTON
PI 146A Cochrane St BV 7rm 417sqm $1,400,000 res $1,500,000 Buxton
PI 2 Rothesay Av B 7rm 965sqm $2,250,000 lo $2,450,000 res $2,700,000 Buxton
PS Vaucluse St 8rm 586sqm $1,750,000 Buxton
PS William St $1,918,000 Hocking Stuart
BRIGHTON EAST
PI 140 Dendy St BV 8rm 640sqm $2,210,000 res $2,350,000 R T Edgar
PI 5 Davies St 6rm 623sqm $1,150,000 VB res $1,250,000 Buxton
PI 93 Marriage Rd BV 7rm 610sqm $1,350,000 VB res $1,450,000 Buxton
SB 3 Roseberry Av WB 6rm 435sqm $1,100,000 Hodges
SB 8 Sara Av BV 8rm 458sqm $1,190,000 Hocking Stuart
PS Collis St C 7rm 350sqm $1,200,000 Biggin & Scott
CARLTON NORTH
PI 142 Amess St B 5rm 5mx30m $910,000 VB lo $920,000 res $1,065,000 Nelson Alexander
CAULFIELD SOUTH
PS Mercury St BV 7rm irregular $1,000,000 Noel Jones
EAST MELBOURNE
PI 45 Berry St B 7rm 5.7mx33m $2,000,000 lo $2,100,000 res undisc Dingle Partners
HAMPTON
S 10 Lagnicourt St WB 6rm 569sqm $1,020,000 Ray White Hampton
S 20 Ivy St v/land 792sqm $1,125,000 Buxton
S 26 Littlewood St WB 9rm 730sqm $1,545,000 J P Dixon Sandringham
PI 20 Teddington Rd B 6rm 771sqm $1,300,000 VB res $1,360,000 Hodges
PS Myrtle Rd BV 6rm 708sqm $1,210,000 Hodges
HAWTHORN
S 37 Illawarra Rd B 6rm 887sqm $2,000,000 Fletchers
HAWTHORN EAST
S 11 Lawson St B 8rm 836sqm $1,687,500 Jellis Craig
SB 486 Barkers Rd B 9rm 1474sqm undisc Jellis Craig
SB 8 Carlyle St B 6rm 711sqm $1,750,000 Jellis Craig
KEW
S 9 Findon Cr B 8rm 473sqm $1,000,000 Collins Simms
MALVERN EAST
PI 383 Wattletree Rd 7rm 985sqm $2,100,000 VB res undisc Marshall White & Co
MCKINNON
S 2/34 Osborne Av B 3rm strata $320,000 Buxton
SB 16 Amelia St WB 6rm 570sqm $1,200,000 Hocking Stuart
MELBOURNE
PS Spring St C 5rm strata $2,250,000 Robert I. Mitchelson & Co
MOUNT ELIZA
S 1 Canadian Bay B 9rm 2689sqm $2,520,000 David Rew Mt Eliza
PARK ORCHARDS
PS Falconer Rd BV 6rm $1,020,000 Hoskins Wallace
PS Timberglades BV 8rm 4040sqm $1,056,000 Hoskins Wallace
PORTSEA
PS Shelly Ct v/land 1365sqm $1,200,000 Kay & Burton
PS Wattle Gr BV 7rm 2434sqm $1,500,000 Kay & Burton
PS Wattle Gr Rend 8rm 1980sqm $2,100,000 Kay & Burton
SANDRINGHAM
S 18 Sandringham Rd WB 8rm 589sqm $1,090,000 Hocking Stuart
ST KILDA EAST
S 42 Sycamore Gr B 7rm 421sqm $1,095,000 Century 21 Wilson Pride
SURREY HILLS
S 8 Newton St B 6rm 824sqm $1,101,000 Jellis Craig
TOORAK
S 1/33 Albany Rd B 5rm $1,410,000 Kay & Burton
WILLIAMSTOWN
PI 63 Giffard St B 5rm 463sqm $1,275,000 res $1,395,000 Sweeney/Seller Solutions
SB 68 Cecil St B 5rm 321sqm $1,100,000 Sweeney

 

1st and 2nd Homebuyers

Melissa Ryan Principal Buyer Agent 0409 409 357

Buyers, What are you waiting for???

Dear Buyer's - What are you waiting for?

The market is in your favour and prices have softened. So why aren't you taking advantage of the great buying opportunities out there?

Over the weekend I was astonished to see a number of good 1st and 2nd home buyer properties pass in at levels that were very affordable and more importantly where vendors were prepared to sell.

This was the case at one property I visited on Saturday morning. The property is an original period home on a north facing corner block of 590sqm in one of the best pockets of Brighton East. The home is located walking distance to trams, shops and schools. 13 Charles Street has an 80 year history and in this time has had only three owners. Consequently the home is in immaculate condition and has a much loved cheery 'feel'. The property was positively represented by Trudy Biggin and auctioned by Bill Stavrakis of Biggin and Scott. It was passed-in on a vendor bid of $850,000. Like me, the agents were left shaking their heads at the waste of a great buying opportunity. We understand the reserve was in the high $800,000’s and is now for sale at that level.

If you are waiting for prices to come off again in the next month or the next six months, the answer is they probably won't and the reason is very simple - SUPPLY and DEMAND.

The real estate market in Melbourne is governed by the timing of school and public holidays. You may have noticed that the first quarter of 2008 has seen a huge amount of stock squashed into the weeks between Labour Day, Easter long weekend, Term 1 holidays and at the end of April, the Anzac Day long weekend. Vendors prefer not to auction on Long weekends or during school holidays.

So what will happen in the second half of the year after the Queen's Birthday weekend?

The market will change again and more than likely in the vendors favour. The reason again is simple. There will be no more long weekends. From mid June to early November there will be a more even spread of property on the market and therefore less property for buyers to choose from.  Going into winter there is normally less property on the market anyway and consequently we may see a rise in prices. Don't wait buyers, buy now and feel comfortable that by the close of the 2008 market, your new home will have grown in equity.

Happy Buying.

 

Architectural advisory

Adam Woledge Registered Architect 0413 318 079

Renovations are not always clever.

Renovations can sometimes go wrong in places and be ill considered.

A living example of this currently up for sale at 25 Cowper Street Brighton. A lovely period style home with a lot going for it – i.e. great street, north facing rear, generous off street parking, ornate period details in excellent condition - has been recently modernised, however the meals area is far too narrow and the front bedroom area has been compromised (ie foot of the bed is too close to the fireplace) to include a stand-alone robe unit.

This may have seemed a good idea on paper, (clients often fudge drawings to make things fit) however in reality these don’t work spatially. Most people walking through this house should look a little beyond the WOW and understand that further modifications are needed.

 

 

Investors

Peter Sinclair Principal Buyer Agent  0423 778 774

Buy one or two?

A lot of clients ask for advice on spreading their portfolio; not unlike the concept of spreading your investments in the share market to protect you from highs and lows of stock market performance. In our experience, property, when bought well, works a little differently.

This is how I generally answer the question.

Purchasing a single property worth $1.5 million in an area that may see significantly higher growth than in the areas that you may buy two properties for $750,000 each. We recently purchased a property in Brighton for a client midway between 1 and 2 million in a very good location on about 450 sqm of land. They had been considering a dual buy strategy and wanted to buy two properties (apartments) in Port Melbourne. Last twelve months Brighton median price has increased by nearly 10% more than Port Melbourne. Both solid areas and both with positive outlooks, but even if the gap narrows a little and there is only 1 or 2 or 3% difference, over a long period of time the 1 or 2 or 3%’s make a significant difference to your future wealth.

The figures really don’t matter, but the principal is the same; buy one ripper instead of two average properties. As long as the homework is done, there is not a lot to go wrong.

Of the properties I visited during the week, two rate a mention. 2/58 Wattletree Road in Armadale - A Property We Rated 421 out of 1000 (click here for full rating) had been cleverly renovated to suit the owner’s lifestyle. A three bedroom townhouse, one of eight on the block, has effectively been turned into a one bedroom plus study townhouse. The open bathroom on the top floor would make it difficult for anybody to rent the property as two bedrooms, other than to a family with a very young child or a couple with no kids. I rated the property harshly; apart from the unique renovation, it also fronts onto Wattletree Road. The one strong feature was the amount of land on title. Agent’s quote is $600,000 - $660,000 and it is scheduled for auction on April 19.

4/41 Broadway in Elwood - A Property We Rated 418 out of 1000 (click here for full rating) must have had 40 or 50 groups at its open for inspection on Saturday. Good location, period building, low sale quote. It is a company share title and some lenders do not like these and as a result will loan only 60 or 70% of the value. The garage was on the other side of the road, the building appeared to be in poor condition and the apartment itself also needed work. Also rated quite poorly, but it will sell well given its location. Agent’s quote is $440,000 - $480,000 and it is scheduled for auction on May 3.

 

Auctions I attended on the weekend 12th/13th April.

383 Wattletree Road Malvern East.

Lovely family home on nearly 1000 square metres of land, but on a very busy road. Agents quoting $2,100,000. Not a bid. Passed in on a vendor bid and according to The Age on Monday remains unsold.

 

2 Rothesay Avenue Brighton.

Superb block of land, again nearly 1000 square metres, surrounded by very nice homes on the eastern side of St Kilda Street.  but on a very busy road. Agents quoting $2,500,000. One bid, passed in at $2,250,000 with a later offer of $2,450,000. and according to The Age on Monday remains unsold.