oc | Sunday 23rd January

Scotch College’s buying tactics – Dustin Martin and Ralph Carr

4 Belmont Avenue Kew. Sold after auction, 1 Bidder undisclosed

Mr Patterson, she’s obviously seen you auction before! 4 Belmont Avenue, . Sold after auction, 1 Bidder undisclosed. Knit one, purl one.

End of Year Bumper Edition Contents:

  1. Yesterday’s Rout
  2. 2017 Year in Review
  3. Younger People’s compassion and tax problem
  4. Around the Grounds
  5. Scotch College’s curious auction strategy
  6. Emotion v $ when deciding on a home
  7. Transparency
  8. The “Reserve” malaise widens
  9. Ralph Carr and Dustin Martin
  10. Thank you’s
  11. 2017 – Top 5 Reads at James Market News
  12. Next Edition

Hammer Watch

It’s never as good as it seems and it’s never as bad as it seems – this is what we thought after today’s rout at Inner Melbourne $M+ auctions.

In completing our three week 100 auction test (Oct 22/28th and Nov 25th), the market recorded its poorest performance for the year and in fact, its poorest performance for many a year.

Of the 29 Inner Melbourne $M+ auctions we reported on today, the clearance rate was a measly 58%, with an icy cold Bidderman of 1 (bidders per auction).

We don’t think today was a statistical anomaly – meaning we do think the stats today continue the trend that we have witnessed since winter. However, we don’t think the market is as bad as today’s stats make out.

Some segments of the market have been easing since late last year and the overall market has been more clearly weakening since winter (A-graders excepted).

Today, the general quality of properties on offer was less than stellar, again highlighting the market dichotomy between the well supported A-graders and the unsupported C-graders. B-graders are getting mixed receptions.


Let’s take a closer look at the diagram above:

  • If you bid today, then in 66% of auctions – that’s two in every three – you were the only bidder (Ducks and Lones). We did not record any Volcano auctions today (4+ bidders)
  • The Hammer rate – meaning those auctions that sold under the hammer – was 19%. Yep, only 1 in 5 auctions ended with an auctioneer gavel slam and the words – SOLD.

What does this mean?

  • If you think buying your dream home is a matter of turning up at auction and waiting ’till others put their hand up, you do the same and then hope the home will be knocked down to you – then you are naive in the extreme, as four in five homes are not bought under the hammer. If you bid today, then on two in every three occasions, you would have been the only bidder – meaning your competition was not another buyer; your competition was the agent (seller)
  • You need strategies to buy well right now. It’s easy for you to be the only buyer and to be $200,000 or more above the next buyer (if indeed there is one). Pass-in Powerlifting, Clayton’s Reserves and Sergeant Shultz agents (I know ’nuffing’) are alive and well throughout the Inner Melbourne auction scene this spring.

HOWEVER – as buyers, we may finally be seeing a break in the traffic … Happy Days!

Not saying definitely crack open the Champagne, but there are some homes that are now cheaper this year than they were last year. This would be the first time since 2011.

Bring on 2018 as growth sanity is seemingly returning – although, YES –  the market can change back in a heartbeat.

Still some good buying left before Santa hits the slopes. These are our best off-market buying times, as sellers consider selling now rather than running the market opinion gauntlet ’till February.


Same auction weekend,

one year apart,

vastly different results.

Nov- Nov

The above stats exaggerate the change, but clarify the trend.

2017 Year In Review

We feel 2017 is best summarised as one of less urgency.

In 2016, the market train lost its driver – the OS Chinese bidding machine. In 2017, most of the bidding passengers realised this and wound back their panic. Subsequently, the overall bidding intensity from locals and overseas buyers alike diminished and the overall run up the price staircase eased.

Contributors have been China’s tightening regulations on money movement, FIRB tax increases and bank lending tightenings (lead by APRA) – well done to the Reserve Bank/Scott Morrison etc – this has had a contributory effect.

The easing is best evidenced in the reduction of bidder numbers and the split between A and C graders.

Today we completed the last of four separate – three week 100 auction tests. (Over a three week period, we randomly report on 100 auctions – this we did four times during the year – Beginning of the year, After Easter, Footy Finals and Melbourne Cup).

You can see in spring 2016 there were 281 bidders with an 88% Clearance Rate on our 100 auction test.

In late spring 2017 we counted 162 bidders with a 71% Clearance Rate, for the same 100 auctions.

That is a 42% drop in bidder numbers in a little over 12 months.

The continued drop in bidder numbers is the reason we are now finally seeing a weakening in Clearance Rates (which usually lags Bidderman) and then ultimately why some segments are seeing price drops.


The above table represents the increasing fragility of our upper end.

It looks better on the surface (Clearance Rates) than it actually is underneath (Bidderman)

Yes, it is late spring and that is often the weakest time of the year to sell a home however, there is no denying the stats for the market right now.


The clear evidence is that the greatest drop in bidders, and in turn prices, has been for C-graders.

A-graders are still continuing to resist market changes and whilst population increases continue to occur, through skilled migration (internally and externally);

we won’t be jumping off the A-grade bus any time soon.


Young Homebuyers orange banner

2017 for Young people: As long as we oldies view our young people as a dollar commodity, to rent our investments; then we will have increasing disharmony in our community.

This will come back to bite us as we get older and we then hope for younger peoples’ compassion. It won’t be there, as we have not taught them.

Tax laws: When our tax laws allow me to buy a $million home with $8,000 after tax dollars and no deposit AND yet that same home would cost a young couple $50,000 in after tax dollars and a 20% saved deposit, then we have major inequities and unfairness in our Australian society.


7 Hambledon Road Hawthorn. Sold after auction $3,300,000

Get that grin off your face, Antony. What’s it like knowing that no matter what you ask, the buyer (Scotch) will pay? 7 Hambledon Road, . Sold after auction $3,300,000.

, 18 Greville Street (James McCormack, ) undisclosed after auction, 3 Bidders

Malvern, 2 Glendearg (James Tomlinson, Marshall White) undisclosed after auction, 3 Bidders

Hawthorn, 7 Hambledon Road (Antony Woodley, Marshall White) $3,300,000 after auction 3 Bidders

For all 29 James Auction Reports

Hey, Scotch College, we are curious about the above auction and your strategy?

Any avid reader of the dailies knows, that Scotch loves to have its purchasing of neighbours splashed all over the tabloids – in fact, these days they are almost “press releasing it”.

Our genuine question is  – Why?

Maybe there is a plan, to pay as much as they possibly can for each site?

This is what occurred at 7 Hambledon, Hawthorn this weekend, a neighbouring street to Scotch.

1) At the auction there were strong comments made from the crowd, about Scotch’s ownership in the street.

2) These signs (below) appeared up and down the street, just before the auction.


3) As well, a copy of this note was sent to households in Hambledon owned by Scotch.


Why would a school so overtly telegraph a property they wanted to buy?

If it’s to prevent other bidders bidding, then how does that sit with the Sale of Land Act legislation, prohibiting that?

If it’s about the seller, why would the school antagonise a person they want to buy off ?

At today’s 7 Hambledon auction we understand the school got past all other buyers, but was then powerlifted a whopping $300,000 after the pass-in.

Is there a missing link in the auction strategy – or is it us, who is missing something?


I scream, you scream - we all scream for ice-cream! 47 Greig Street. Under the Hammer $1,710,000 3 Bidders

I scream, you scream – we all scream for ice cream! 47 Greig Street. Under the Hammer $1,710,000, 3 Bidders.

, 18 Kendall Street (Kaine Lanyon, Marshall White) $2,925,000 under the hammer, 2 Bidders

Brighton East, 27 Ferguson Street (Stephen Smith, Marshall White) $1,872,500, 2 Bidders

, 47 Greig Street (John Bongiorno, Marshall White) $1,710,000, 3 Bidders

For all 29 James Auction Reports

Our text response to a client mid-week about which home to buy – $ v emotional

“Dear Julie and Sam,

Over the years I have been through very difficult family times including divorce and illness and sibling splits.

I have made dumb decisions to sell good $ assets to reduce debt and then found I had built debt back up again, only this time without the income.

I think I have made so many mistakes, but I got one thing right.

I helped keep my family together – in one place for the last 25 years and it’s a place they have remained connected to. It’s a place that is close to shops and train and it has size of land and you can walk to many things. I remember so fondly walking my kids to school.

My father is next door and nearly 90 and people drop in all the time – I see him and Mum every day – access and ease.

Our family home has been so much more than a bank account and I think it has been so, for the rest of the family.

When over coffee I’m asked do you have any regrets in not keeping certain assets – I say yes, when I think I still have a $m in debt to pay off – but then I think how grounded and centred my kids are, due in part to stability in a home they loved – the real home family assets – safety, serenity, sanctuary.

Of course family is people, not bricks and mortar – but a good environment helps the people.

No theory of the future ever pans out entirely as planned, when humans can effect it – especially ones you’re related to.

My best advice in choosing a way forward, is go with what is best for your family.

What’s best in your heart and then pick up the dollars, wherever they may fall after that decision.

Not make a dollar decision and then pick up the family pieces wherever they may then be.

Our job is to assist you and to allow you to be informed – your job is to decide. Either decision makes financial sense – which is best for your family?

Good luck.”

And there is another guy called James out there – we admire your family decision this week – very caring.


39 Finlayson Street Malvern sold under the hammer $2,610,000 2 bidders

39 Finlayson Street, Malvern sold under the hammer $2,610,000, 2 bidders.

Prahran, 18 Greville Street (James McCormack, Marshall White) undisclosed after auction, 3 Bidders

Malvern, 39 Finlayson Street (John Morrisby, ) $2,610,000 under the hammer, 2 Bidders

Malvern, 2 Glendearg Grove (James Tomlinson, Marshall White) undisclosed after auction, 3 Bidders

For all 29 James Auction Reports

Transparency for buyers?

This recent conversation, between an agent and myself, as we were pushing for a particular turn of events, after we had put in a pre-auction offer.

Agent: Mal you claim to be a man sticking up for fairness for buyers and yet you are always pushing pre-auction offers and trying to avoid the transparency of an auction process.

I nearly chocked on my lentils.

Mal: Friend, your company gets more pre-auction offers than any other company – some with our most aggressive deadline behaviour – precisely because of your lack of transparency.

Agent: But Mal, we want a transparent process for buyers, so that we are seen to be fair and above board with all buyers.

This time my coffee did go down the wrong way.

Mal: Your company is the second poorest of all Inner Melbourne agencies, when it comes to auction transparency with your Clayton’s reserves and Agent powerlifting strategies. That is the reason we employ so many pre-auction offers, from so many sources – it’s actually due to your lack of transparency at auctions – especially at pass-ins.

With 2 out of 3 auctions not selling under the hammer, your pass-in and Clayton’s reserves are in many cases, the least transparent auction processes for buyers.

The reason we are here today before the auction attempting to do what you say is not transparent, is because we have so little faith in how transparent you will be with us and other buyers at the auction, this weekend.

Postscript: We did the deal, the agent asked us to let it be handled a certain way and in exchange we would get full transparency – we trusted and we actually got full transparency and we were successful. Our buying clients are happy, so are we and so is the seller and agent. Thank you.


6 Oak Street Hawthorn. under the hammer $4,010,000 3 Bidders

6 Oak Street, Hawthorn. under the hammer $4,010,000, 3 Bidders.

, 38 Hopetoun Avenue (, Jellis Craig) $4,508,000 after auction, 1 Bidder

Hawthorn, 6 Oak Street (Sam Wilkinson, Kay & Burton) $4,010,000 under the hammer, 3 Bidders

Kew, 4 Belmont Avenue (, Kay & Burton) undisclosed after auction, 1 Bidder

For all 29 James Auction Reports

Midweek the internet asking price is $2,750,000 – $3,000,000; but they won’t take under $3,200,000


Interesting little visit to this Inner East property this week, where I met two 80-year-old owners who showed me through their home. My client had asked the owners if I could come on his behalf and explained who I was at the start.

This is not an auction, this is a private sale.

Our client was interested in purchasing and so I asked the owners “Would you like me to make an offer, or do you want to tell me the price you want, as you have an internet advertised range of $2,750,000 – $3,000,000?”

The male owner said we don’t mind what you do, but we are not selling under $3,200,000.

Mmmm –  this is not an agent guide (there are no agents, no Statement of Information, no comparables), there is only the figure put down by the owner ($2,750,000 – $3,000,000) and that advertised figure is lower than what he/she is prepared to sell it at.

Mmmm – wondered if they enjoyed watching The Block – not really surprised anymore, after the CAV’s new interpretation of the “reserve” legislation has been splashed across National TV – which states the owner can say whatever they like (reserve wise), even when they know it to be untrue. Interesting times we live in.

I was very polite, no pressure and when told the figure I did not argue, I just stood up, thanked them and we said our goodbye’s.

We haven’t responded after my visit and we won’t be.

We are now looking to offer on another block of land nearby.

Our clients don’t accept this kind of behaviour.


3 Gould Street Brighton. Passed in $2,650,000 1 Bidder

3 Gould Street, Brighton. Passed in $2,650,000, 1 Bidder.

, 1 Barnato Grove $7,000,000 passed in, 0 Bidders

Canterbury, 26 Chaucer Crescent $3,600,000 passed in, 0 Bidders

Malvern East, 34 Manning Road $3,350,000 passed in, 1 Bidder

For all 29 James Auction Reports


To Ralph Carr and Dustin Martin – well done.

We’ve never met either, but we say congratulations to the greatest public negotiation and the best client selection of a negotiator, we saw in Melbourne this year.

What Ralph Carr achieved this year with Dustin Martin and what he also achieved with Travis Cloke some time back, was brilliant – not so much in the result (incredible), but in the left field mindset and structure that carried it out.

And for all their criticism, it’s congrats to Dustin Martin and Travis Cloke for making such good decisions in their choice of negotiator.

We have changed our company over the last year based on …… well, let’s call it the “Ralph Carr School of Negotiation.”

  1. Have clear principles
  2. Have a clear plan
  3. Don’t be all things to all people – be nimble
  4. Don’t work within the system – work along side the system
  5. Be patient
  6. Be bold (maybe left field as well)
  7. Be a bit Hollywood
  8. Hold your nerve
  9. Be decent and do the right thing in the end.

For our final Inside James we would like to focus on points 1, 3, 4 and 5.

1. We have three clear principles – we’ve had them written down for over a decade

  • To make a positive difference to those that want our help.
  • To treat others as we would like to be treated.
  • To be in balance with our clients, ourselves and our community.

3. Last year we reduced from 15 to 6 people, so as we could give more personal service to our clients

We rejected the notion of working on your business and we decided to work in our business – our quality of work, life and income has gone up dramatically. We can respond to situations more personally and far quicker – we have so much more time, now we don’t work on the main business issue (HR).

We have time – I personally now do appointments day on/day off, so as I have time to recover from bruisings and think about the next steps for the next client.

Day in / day out stress for the dealers, does not lead to everyday good dealmaking – it just leads to everyday dealmaking.

4. Over the decades we have learnt that;

you can’t be a great negotiator and only do one or two a year. But we have also learnt that you can’t do a hundred either and be a great negotiator;

as you become so systemized, that you become part of the system and great results rarely come from being part of a broken system. At our peak (numerically) we dealt on over 100 deals a year – at our real peak (quality) we now deal on around 50.

Ralph Carr doesn’t represent a hundred footballers and so he doesn’t have to pay homage to the interests of the system with the individual deals he strikes – in other words, he can rock the boat and not worry about pressure being applied by the club, to the other players he represents.

This is so true in our business – we can rock gently/not so gently; as every deal is not just a flow on from the deal before, to the deal after. Relationships are great ………….. but not if you have to sacrifice your current client to keep them.

We have no interchanges of cash between selling agents and ourselves – the money we receive for referring the best agents into our clients, who want to sell – goes to Launch Housing/Hanover for the Homeless – it does not come to us, as we see that as an avoidable conflict. It is in the hundreds of thousands. Agents rarely, if ever recommend us. We are not reliant on them.

Ralph Carr was completely unpredictable to the outsider and we assume the insider, and he wasn’t worried about busting some buns – that’s so important in big time, long term negotiations.

5. Patience in this market, is worth hundreds of thousands of dollars

and patience is not just a product or months or weeks – it can also be a product of seconds in a phone conversation.

Well done Ralph on your strategy and well done Dustin for being smart enough to listen – we take our hats off to you both.

Thank you’s

Thank you to our readers, with increasing numbers you have said, with your eyeballs, that what we are doing is important to you. Thank you.

Thank you to all the key estate agencies (Richard Earle, Al Craig, Andrew McCann, James Connell, John Bongiorno, Michael Gibson, Ross Savas, David Hart, Jeremy Fox and many more) who have never restricted our ability to report auction results in 2017 – even when the results, have been a little harsh.

Overall congrats to the CAV, Andrews Government and the REIV on the underquoting strategy introduced in May 2017 – well done on Underquoting – let’s also get “reserves”right as well please.

To our profession (buying and selling agents) – what we saw briefly in May and June was how the majority of us could operate without widespread systemised deceptive quoting. It was a credit to all of us – do you think we can continue it please?

To the James Reporters (Randall, Kathy, Brig, Catherine, George, Rhi, Sim, Kieran and others throughout the year) who on most weeks are out there in their ochre jackets, writing up the storm – thank you and see you at our Christmas Lunch.

To Simone and Rhi, thank you very much for coordinating the auction reporters and reports.

To Chris thank you for the legals and keeping us off other solicitors’ Christmas card lists.

To Randall thank you for the endless proofreading – it is very reassuring to know you are in slips, picking up what we drop.

To Gina – the toughest of editors, but almost always right. Thank you for your caring and strength.

And finally to our clients – thank you for your significant support – yes, we are bit weird and left field – but without your trust and support – we would be…… well, we’d be baristas or book sellers …… interesting, but not half as much fun.

Thank you

Housekeeping: During the year we planned to award $5,000 for 5 x Young Homebuyer Articles and $5,000 for Agent Quoting awards (one of our poorly received ideas). We awarded $3,000 to Young Homebuyers and $0 to Agent Quoting Awards. This $7,000 promised shortfall, was added to our company’s PlasterHouse donation through Saint Johns Church, East Malvern ($25,000 – up from $18,000). We hope you feel that squares the ledger Ok.


We broke some big stories in 2017 and we stuck at issues supporting the individual, by encouraging or explaining change.

We try and support the individual over the system. We try and highlight the issue whilst being constructive and we also try and have a laugh (even at ourselves).

We think today’s highlight of Scotch’s exploits, encapsulates this. The Big guy, not really following the Marquess of Queensberry rules versus The Little Guy – less powerful  (other buyers and/or seller).

We support the individual’s right to a fair go – irrespective of the backlash.

Below are 5 of our biggest stories for 2017. Enjoy.

1. Stonnington Council Destroys Auction

2. Are you serious Scott Cam – Are you serious CAV?

3. You think newly zoned land is the same – it’s not – it’s a $700,000 difference.

4. Game Changer – Myvore Auction

5. Deeper Examination Into Our Markets

Next James

First weekend after Australia Day 2018.

Is it too early or politically inappropriate to say Merry Christmas and a happy and safe New Year to you and your family, from all at James Buyer Advocates?

James Buyer Advocates remains open for new and existing clients, up until Friday 22nd December – 9804 3133. We return after our break mid January 2018

Subscribe to our Market News Newsletter

Tags: , , , , , , , , , , , , ,

Be with James

Would you like to talk to us about finding or negotiating on your next home?
We buy 100 homes for our clients every year.
We buy Inner East and Bayside over $2m.
View more MasterClass Articles

Inside James Market News