oc | Tuesday 7th December

This is beginning to feel like boom conditions but it’s early days and it may just be another short spike. After all this is Berocca February.

Richmond, 43 Hunter, Elliot Gill,  Bought Under the Hammer, $1,800,000, 3 bidders.

Richmond, 43 Hunter, Elliot Gill, Bought Under the Hammer, $1,800,000, 3 bidders.

At 6.00 pm on Saturday, the James Clearance Rate for Melbourne’s $M+ property was 76% on the 29 auctions we covered. The Weekly Review Bidderman, our bidders per auction measurement was at 2.8.

It was hot out there today as predicted – 80% of auctions we covered today had 2 or more bidders.

Welcome to the first game of the season – the pre-season jousting is over as today were put to the sword for the first time in 2015.

All was revealed in rawness at many and varied battles fought on hundreds of nature strips throughout Inner and Wider Melbourne today.

Who were the winners and who were the losers? Who was wounded in combat and who remained unscathed? And who collected the booty?

Our auction reports are a large and representative sample of $M+ . So you be the judge. How has the market started?

Overall Summary of Melbourne’s Million Dollar-Plus Auctions:

  • Ducks ($M+ auctions with no bidders) 8%
  • Lone Rangers ($M+ auctions with one bidder) 12%
  • Norms ($M+ auctions with 2 or 3 bidders) 42%
  • Volcanoes ($M+ auctions with 4 or more bidders at auction) 38%


Last week we talked about February’s Berocca effect.

This week it’s about Chain of Reasoning.

Today there were a number of homes bought by a bidder who understood the proposition and paid the price. There were a number of bidders on exactly the same home who missed out, completely confounded as to why somebody else saw at the price that was paid.

It’s partially to do with affordability at the lower end but at the upper end it’s more about the different chains of reasoning. There are as many chains of reasoning just as there are bidders. However, three clear chains of price reasoning have emerged when it comes to buying homes in Melbourne right now.

18 Gowar St, went to auction today. It sold for $2,765,000 with 5 bidders.

It last sold in 2008 for $1,825,000 with, if I recall correctly, only one bidder.

Nothing of substance has been done to the property in the interim.

So how did bidders get to the price they did on Gowar today?

Three Chains of Reasoning:

  1. Past Sales with an increase factor eg $1.8m in 2008. So to pay the price today on this reasoning, the buyer would have to comfortable that property had gone up 50% in the 7 years since it last sold. If they thought the market had only gone up 30% then they weren’t going to be the buyer.
  2. Comparable sales. In the street $2.1m was the previous highest number. So to pay the price on this chain of reasoning, the buyer would have to be comfortable that 18 Gowar was significantly better than any other home in the street and that other homes in the area of this quality would attract a similar $2.7m price. If they felt similar homes in this street and in this area were sub $2.5m then they weren’t the buyer.
  3. What Asian/ Asian Australian bidders are prepared to pay – $2.765m and then pay more. In other words, the Chain of Reasoning is based on doing what needed to be done rather than a specific price.

No judgement here on a correct Chain of Reasoning just pointing out how we all think differently.

Middle Park, 165 Ashworth, Geoff Cayzer, Bought Under the Hammer, $2,430,000, 5 Bidders

Middle Park, 165 Ashworth, Geoff Cayzer, Bought Under the Hammer, $2,430,000, 5 Bidders

Around the Grounds


As we have reported since 2008, Chinese and Chinese/Australians push the market to new heights each week. And with the Australian v American dollar swing we do not see this phenomenon stopping anytime soon.

There has been a doubling of Balwyn prices in recent times. This is due to the ‘Balwyn formula’ of developers building big homes on smaller blocks exclusively for the near insatiable from the overseas Chinese market. This only eased around 2011 when the exchange rate was very different – in fact our whole market eased at that time due to dampening Chinese .

The price gains in Boroondara land have rippled through to all homes in the area and in fact have rippled through to all Melbourne home buying.

None of this is new but you do need to have smart and alternate strategies if you want to buy a home in the and Inner East areas.


Two key campaigns of interest in the Bayside – one that has just happened before auction and one that will probably happen next week.

32 Normanby St, Brighton with Andrew Boyce just sold for $3,600,000 before auction making land in the area $3400 per sqm. While this is only one deal it does confirm what we said last week regarding good Brighton land. There was no value in the house  – which unusually for the area could be bulldozed. This is an excellent yardstick for professional and amateur alike.

12 Kyarra St, with Stephen Wigley. Next week this could well be a landmark breakthrough auction. Good home, well marketed and with an increasing Chinese factor now drifting into Bayside. While it’s not a given, it does feel that Kyarra could set a just under or just over $3m record and it could be the $3m breaker for the Linacre Road precinct.  Last year we  saw Binnie Street break the ice in Brighton East for $3m sales and it was followed by 3 more quick sales over $3.5m – if Kyarra breaks $3m then the market may see a few more.


This  week and next week marks the start of the 2015 upper end pre -Easter Season for Stonnington. Expressions of Interest are warming up, ’s Mexican Wave will start to gather some momentum and agents like Abercromby’s have started a half dozen key properties all with the intention of piggy backing off each other. This creates cross pollination excitement with the hopeful end result of a sold sticker on each and every one.

Glen Iris, 18 Cusden, Paul Williamson, Bought Under the Hammer, $1,570,000, 5 Bidders

Glen Iris, 18 Cusdin, Paul Williamson, Bought Under the Hammer, $1,570,000, 5 Bidders

Bigger Auctions:

  • Camberwell, 18 Gower Avenue (Scott Patterson, Kay & Burton), under hammer, $2,765,000, 5 bidders
    This auction drew a medium-sized crowd which was eager for the results … (See more in Auction Reports)
  • Glen Iris, 36 Bourne Road (Andrew Hayne, Marshall White), under hammer, $2,540,000, 5 bidders
    From the start you could tell that this would be a special auction … (See more in Auction Reports) 


  • Kew, 10 Heather Grove (Reilly Waterfield, Fletchers), under hammer, $1,940,000, 7 bidders
    A bumper crowd of more than 100 gathered to watch auctioneer Reilly Waterfield … (See more in Auction Reports)
  • Brighton, 24 Cochrane Street (Julian Augustini, Hodges), under hammer, $2,201,000, 6 bidders
    “Location” was the key word in Julian Augustini’s glowing appraisal of … (See more in Auction Reports)

Biggest Pass Ins:

  • Malvern, 42 Somers Avenue, passed in, $3,785,000, 2 bidders
    A late auction but it was still stifling hot, kudos to auctioneer … (See more in Auction Reports)
  • Toorak, 12 Kilsyth Avenue, passed in, $2,600,000, 0 bidders
    A totally renovated townhouse, offering delightful alfresco living, is on offer today … (See more in Auction Reports)


Agent Survey: The bottom end of the $m-plus market appears to have started with some gusto. What about the Top End, for example, $3 m-plus? Are you seeing real strength or is it too early to tell and we won’t know more until around Easter? 

Michael Gibson (Kay & Burton): Activity over the last three weeks at the top end of the market has been pretty active and is similar to what we were experiencing late in 2014. Our outlook is for a pretty solid year all round.

Peter Kennett (Hocking Stuart, Brighton): With the market really only kicking off in Brighton/Sandy over the next two weekends, the $3 million-plus market hasn’t really been tested publicly yet. Having said that we are getting between 20-40 groups of mostly fresh buyers through our opens in this range. My main one over the next two weeks is 9 Tovell, Brighton, which has had excellent inspections with five repeats of which three have been Asian buyers.

I think things will be good to great over the next six months with stock shortages and the lowest interest rates in 60 years. My view after 30 years of selling all sorts of properties in the Bayside, is that the back six months of this year won’t be as strong as the first due to stock numbers building then, unemployment climbing, unstable government and troubled economy – sell sooner rather than later.

David Wood (Hocking Stuart, Albert Park): A handful of $3 million-plus properties will hit the market in the next 30 days so it will take until the end of March to tell. Enquiries for $3 m-plus is extremely strong and we imagine it will be competitive and pick up where 2014 finished. Enquiry is being further driven by interest rate cuts and this effects the whole market as sellers who get prices in the $2 million range have more money to leap frog into the next price level.


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