Some bigger crowds and some are still selling well at auction. 159 Prospect Hill Road, Canterbury, Doug McLauchlan, Under the hammer, $2,520,000 (Quote $2,300,000 to $2,500,000), 3 bidders.
At 6.00pm the James Clearance rate for $M+ Inner Melbourne family homes was 50% on the 26 Auctions we covered in the Pre Xmas 100 Auction test today.
James Bidderman that is, bidders per auction, was 1.2, indicating the overall market is still easing/falling in price.
Bidderman needs 2 to tango and 3 to party – 1 is the loneliest number if you’re the buyer and 0 is if you’re the seller.
So what’s the market news today?
Price too high and no bidding or price correctly and you sell.
Whilst we only saw one volcano (4 or more bidders) out of the 26 auctions we covered, we did see a wider spread of bidding, although still more than a third of auctions had no bidders (ducks).
Hammer rate 19%
For all those buyer nifties who still think auctions are just about putting your hand up and there are no negotiations, check out the under the hammer rate today, 19%.
That means over 80% were NOT sold under the hammer to those simply putting their hands up. Buyer nifties you need to have a negotiation strategy or you will pay more. You will have to deal with a selling agent face to face, unless you have somebody representing you. That was plug of the week.
We still see strength in well-priced A-graders
This week again we “fought” against 6 bidders during an EOI negotiation over $2,500,000 for a home quoted $1,800,000 to $1,900,000. Plus more strong bidding on an A-grader today – see below.
Either our clients have the unluckiest buyer agents going around, or there is still some heat in A-graders (at the new, right price levels). Our average Bidderman on the last 5 homes we have bought, has been 3 bidders each and yes, only one of those has been under the hammer.
Overpriced there is nobody competing against you – priced correctly on A-graders, it is still a s….fight more times than not.
On well priced A-graders the market has changed (in price); not stopped (in transactions).
On A-graders a mistake is to only focus on how low to go, without a balancing thought on the risk of missing to another buyer.
If it’s an A-grader and the price feels OK to you, then it’s likely it will also feel OK to other buyers.
General (and imperfect) land statement:
Land Prices off 15% from the peak
Brighton, 22 Sussex Street. David Hart (Buxton) 2 Bidders – $5154 per sqm today. The second good sale in Sussex – 2 weeks ago land only @ 45 sold for $4,709 per sqm. In Feb 2017 12 Sussex, also land only, sold for $5,477 per sqm. Between 5% today (but house value today may have skewed) and 15% land price drop 2018 on 2016/17.
Hawthorn, 21 Kinkora Road. Hamish Tostevin (Marshall White) (Q-Rate) 2 Bidders – Grace Park $3863 per sqm but with Heritage Overlays. In late 2016 we bought 22 Chrystobel, also Grace Park with Heritage Overlays and big reno needed at $4,629 per sqm. A 15% land price drop 2018 on 2016/17.
And today we bought 19 Sunnyside Ave, Camberwell (James Home Rating 759 A-Grader) which had multiple bidding at 10% over the quote at $3818 per sqm. We bought number 11 Sunnyside (near identical land only, north rear) in Dec 2016 at $4,515 per sqm. A 15% land price drop 2018 on 2016/17.
(Michael Hingston of Jellis Craig, one of Boroondara’s Top 5 Auctioneers @ 19 Sunnyside).
What’s happening in our inner Melbourne family home market?
We are seemingly moving away from a regulated market, to a more opaque and unregulated one.
Early last year, due to market conditions, auctions were seemingly all the rage. In this late 2018 market, auctions are seemingly no longer the favoured option for a number of sellers.
There were no homes auctioned in Stonnington this weekend with a quote range exceeding $3 million.
$3 million in Toorak, Hawthorn and Brighton is sadly not high end, so this supports the fact that even lower down the property food chain, we are seeing new ways to sell other than auction, such as “Off-marketing” and “Expressions of Interest” (EOI).
Why the apparent change away from auctions?
Cooling success rates (clearances) due to fewer bidders – today averaging around one per auction – you need two per auction for real competition.
But why EOI or Off-market – it doesn’t magically create more bidders, does it?
The seller is attracted to an Off-market (unadvertised) sale strategy as he or she doesn’t want to spend $30,000 on auction advertising, only to tell the world that their home is not worth the quote, as there was no public bidding. Today 38% of auctions had no public bidding and did just that.
Off-markets are a longer, more private, less regulated (no quoting rules) selling strategy, waiting for the right buyer.
Is Off-marketing the panacea it has been made out to be?
By definition, Off-marketing is a secret and last time we checked good sales come in part, from good advertising and good advertising isn’t about keeping secrets.
Many sellers who have some sale urgency and engage a poor Off-market agent, see little effort after the initial burst of activity; once the agent’s database of buyers is exhausted. The only thing the sellers then hear is “lower the price, can’t get any buyers through”.
If you have a need for new buyers, good advertising is a proven way to attract them.
However, advertising alone doesn’t negate the damage, in fact, advertising exacerbates the damage of a regulated and transparent, but ultimately, unsuccessful sales process by auction. And this is currently occurring for around 50% of sellers.
In 2018. it’s not just advertising.
Enter the EOI (Expressions of Interest)
EOI is a sales strategy that encourages high-end advertising combined with a buyer deadline process like an auction, however, that final process is away from the public gaze.
There is a mystique – meaning whilst the agent still has quoting legislation, he or she doesn’t show publicly the level of interest that the quote engenders.
The buyer still has to put an offer in, but with no public vindication, that’s when the fun begins.
On the one hand, a good agent can, to an extent, influence the perception of competition but on the other hand, this lack of transparency may not encourage the trust needed, to get the best offer from the standout buyer.
We have bought three homes in the past month through EOI campaigns with Justin Follett, Ian Jackson and Meg Pell and all three had different processes, different rules and different levels of stress for our client, other buyers and the sellers.
EOI is designed to be a brutal process.
The interaction between buyer and agent is often greater than at auction and the bruisings for all the participants can be deeper.
To be successful at an EOI can require greater skills and fortitude on both sides of the fence when compared to an auction – especially if your main objective is to secure.
This is not a criticism, this is the idea of EOI’s and Off-marketing. Reduced regulation and opaque negotiations is the “re-leveling” of the playing field demanded by sellers, as they try and deal in a more discerning and sophisticated “buyers” market.
Next week: A deeper examination into EOI’s and Off-markets from both the buyers’ and sellers’ point of view.
Final Bumper Market News December 1: Conclude EOI and Off-markets. Have things in 2018 really changed at the Top End on how we buy and sell?
More Auctions (9) than bidders (7) down by the Bay.
Great result in Sussex.
62 Blessington Street, St Kilda – sells after auction $2,650,000. John Carter – Hocking Stuart. 2 Bidders.
Brighton, 22 Sussex Street. David Hart (Buxton) After Auction, undisclosed, 2 Bidders
St Kilda, 62 Blessington Street. John Carter (Hocking Stuart) After Auction, $2,650,000, 2 Bidders.
Brighton¸ 5 Clarkson Avenue. John Clarkson (Buxton) After Auction, undisclosed, 1 Bidder.
Middle Park, 105 Erskine Street. Passed in $2,500,000 0, Bidders.
Hampton, 8 Talbot Street. Passed in $2,670,000, 2 Bidders.
Sandringham, 31 Victoria Street. Passed in $2,700,000, 0 Bidders.
Brighton, 400 New Street. Passed in $2,900,000, 0 Bidders.
Q-rate Middle Park, 26 McGregor Street. Passed in $3,400,000, 0 Bidders.
Q-rate Brighton, 43 Bay Street. Passed in $5,150,000, 0 Bidders.
View all 26 auction reports here
Solid land results at Grace Park and Camberwell Hill but around 15% down on the peak!
Hamish Tostevin sells 21 Kinkora Road, Hawthorn under the hammer. $6,100,000 with 2 bidders.
Q-rate Hawthorn, 21 Kinkora Road. Hamish Tostevin (Marshall White) Under the Hammer, $6,100,000, 2 Bidders
Camberwell, 19 Sunnyside Avenue. Michael Hingston (Jellis Craig) Under the Hammer, $3,460,000, 3 Bidders
Q-rate Canterbury, 29 Parlington Street. Tim Derham (Abercromby’s) Under the Hammer, $2,830,000, 3 Bidders
Kew, 21 Stirling Street. Richard Earle (Jellis Craig) Under the Hammer, $2,800,000, 2 Bidders
Canterbury, 159 Prospect Hill Road. Doug McLauchlan (Marshall White) Under the Hammer, $2,520,000, 3 Bidders.
Q-rate Glen Iris, 8 Barina Road. Daniel Wheeler (Marshall White) After Auction, undisclosed, 1 Bidders.
Glen Iris, 28 Barina Road. Todd Braggins (Marshall White) After Auction, undisclosed, 2 Bidders.
Hawthorn, 14 Hawthorn Glen. Passed in $4,400,000, 0 Bidders.
Q-rate Hawthorn, 78 Kooyongkoot Road. Passed in $2,550,000, 0 Bidders.
Kew, 21 Valentine Avenue. Passed in $2,510,000, 1 Bidder.
View all 26 auction reports here
Stonnington moving away from auctions to EOI’s and Off-markets?
Lone Volcano at Leopold.
18 Wheatland Road, Malvern. Passed in $2,500,000 with 0 Bidders.
Prahran, 32 Closeburn Avenue. Justin Long (Marshall White) After Auction, undisclosed, 1 Bidder.
Malvern East, 2 Nyora Street. Andrew McCann (Jellis Craig) After Auction, $1,635,000, 2 Bidders.
Glen Iris (Stonnington), 13 Leopold Street. Daniel Wheeler (Marshall White) After Auction, undisclosed, 4 Bidders.
Prahran, 13 Packington Street. Passed in $1,650,000, 0 Bidders.
Armadale, 9 Gladstone Street. Passed in $1,700,000, 0 Bidders.
Malvern, 18 Wheatland Road. Passed in $2,500,000, 0 Bidders.
Malvern, 68 Elizabeth Street. Passed in $2,700,000, 1 Bidder.
View all 26 auction reports here
