In the last month, 6 in 10 auctions have not actually been auctions at all.

2pm \ Glen Iris

James Home Rating 728/1000

11 Clyde St, Glen Iris is a 650 sqm, 1980s home on a north rear block.  Agent Quote: $2m to $2.2m.

A quick handshake with managing and quality agents Danielle Waterton and Ian McLennan and it’s down to business. Auctioneer John Morrisby is warming up his larynx and strutting his stuff.

We like John – he’s decent. I’m initially thinking he must have been smoking some hoochy-kooch prior, as he is super animated and alive. But as I scan the crowd you can see it’s not smoke Johnny has been breathing in, it’s the hope and fears of the many, many buyers that are here.

I can see Adam Woledge, one of the best architects going around right now and Adam’s not here to watch? Jonathan Dixon a very experienced high-end agent from Brighton is also here (he’s either lost or here to bid) and there are many more. The crowd was 60 and maybe one of them was only here to look and not bid, but I couldn’t work out which one that was.

Wow, this auction feels as hot as the last one I went to – am I in a bubble, is today a dream?

Bang and it’s started with $1,950,000. I hadn’t opened my mouth and it was $2,100,000 with three bidders. Quickly on the market at $2,240,000 and I was thinking this train is picking up speed and she’s not stopping any stations.

A brief interlude as a “builder” breaks Johnny down to $5,000’s – only for all of us to be gathered back onto the express with some strong bidding to $2,500,000. The final underbidder began to falter around $2,570,000 and a $2,600,000 bid finishes it.

Heartbroken they walked away – this is the downside of this job, seeing others lose who really want it. You genuinely feel sorry for the couple.

Anyway 6 bidders to $2,600,000 on a home that was sensibly quoted, but always could get more and did. This was an A-grader and a volcanic auction.

Buy A-grade not C-grade for the long term.

Can I digress once more – we have bought three homes on market in the last 10 days.

* 7 bidders, 2 bidders and 6 bidders

* All A-graders

* All over their quote by at least 10%

* And what’s more, these were for clients experienced in property. For the first client this was our fourth purchase for them, the second client it was our second and today it was our fourth purchase for the client who bought Clyde.

The 2018 market is not scary for experienced buyers.

The market today again proved we are in transition. 26 Wharton, Surrey Hills, no bidders at $2,800,000.

4pm \ Reflection

During the week I had spoken to key experienced players in EOI’s and Off-markets: Ross Savas and Michael Gibson, Ian Jackson, Marcus Chiminello, John Bongiorno, John Morrisby and Arch Staver and the general summations about EOI’s and Off-markets were:

Nothing has changed from two years ago, a number ($7-13 million) were still selling, proven with Kooyong Road, Albany Road, Heyington Place, St Georges Road, Wheatland Road, Wynnstay Place and several penthouse apartments.

Except overall:

1.  Less were selling, as fewer A-graders were on the market at the high end.

AND

2. Of those that were selling EOI, not all took place within the guide quote – some were above, some within and unlike two years ago – some in this market were now below the guide quote.

When the seller met the market there was some action.

6pm \ Brighton

I’m still trying to work out who had the worst day/month/year: the market or the Liberals.

Getting boring, but statistically, this is what your Inner Melbourne market is doing. In 2015/16 almost every auction had 3 bidders (281/100) and prices were flying, as wounded underbidders from the previous week, pushed the winners harder and harder the next week. In 2018 each auction is averaging one bidder (119/100), meaning the game is between the agent and you and the agent has also shown you, that you have no or very weak competition.

In 2018 there have been way too many homes going to auction that shouldn’t have.

This graphic above shows the results of 3 of our 100 James Auction tests (100 random Inner Melbourne auctions over a 3 week period, 4 times a year).

You can clearly see the decline in bidders and clearance rates – meaning auctions are still just as expensive to run, but a lot, lot less successful than they were.

Agent advice needs to adapt to a changing(ed) market, to give sellers a more even playing field.

It’s not the banks, it’s not the market, it’s not really even the sellers, it’s us buyer and seller agents who need to pick up our act in this market – we are the ones paid for the exchange solution.

With the help of Jellis Craig, Kay & Burton, Fletchers, Nick Johnstone and Marshall White agents we have raised through the 11Climbers group over $300,000 since 2006 for Melbourne Homelessness Prevention (Launch Housing). If this Christmas you want to find out more, please click through. 100% of your tax-deductible donated money gets to the end user and you help keep a Melburnian off the street through eviction prevention. If you like a free Market News during the year, why not donate $50 or $100, please.

2018 Summary

In 2018 Stonnington agents as a group, have been the most professional – they have adapted the quickest to the changes required in this market.

The reason their auction clearance rates are the healthiest is due to unilaterally selling unsuitable homes away from the auction process.

There are not necessarily more bidders in Stonnington, there are just more agents who are more professional at the Top End.

Gentlemen rise to the top in these markets and Warwick is a true gentleman of property. 7 Torresdale Court, Toorak, under the hammer $5,620,000 2 bidders.

Toorak, 7 Torresdale Court. Warwick Anderson (RT Edgar) $5,620,000, 2 bidders

Glen Iris (Stonnington), 11 Clyde Street. John Morrisby (Jellis Craig) under the hammer $2,600,000, 6 bidders

Armadale, 7 Inverness Avenue. Gowan Stubbings (Kay & Burton) sold after auction $2,280,000 , 1 bidder

Armadale, 42a Adelaide Street. Tim Derham (Abercromby’s) under the hammer $1,960,000, 2 bidders

Armadale, 19 Adelaide Street. Justin Long (Marshall White) under the hammer $5,678,500, 3 bidders

Not sure what an A-grader is and why they are still selling in this market. This James Q-rate was done 3 weeks before the auction. Click on it to hear James audio and see video opinion

Malvern, 26 Elizabeth Street. Mark Wridgway (RT Edgar) before auction, undisclosed

Malvern East, 29 John Street. David Volpato (Marshall White) before auction, undisclosed

Toorak, 16 Ross Street. Oliver Booth (RT Edgar) before auction, undisclosed

Toorak, 8 Ruabon Road. Passed in $2,500,000, 0 bidders

Armadale, 78 Wattletree Road. Passed in $2,325,000, 1 bidder

Malvern, 6 Embling Road. Passed in $5,800,000, 0 bidders

Malvern East, 2 Bates Street. Passed in $3,750,000, 0 bidders

Prahran, 30 Airlie Avenue. Passed in $2,300,000, 0 bidders

Read all 40 James auction reports

2018 Summary

Boroondara is the worst performing geographical sector in 2018.

In part, it’s due to factors such as the major retraction in the overseas Chinese market, which has for a decade dominated Kew, Balwyn, Canterbury sales.

However, it is also due to the inability of many agents to present alternative solutions to buyers and sellers in a falling market.

Many of these homes that went to auction today, shouldn’t have.

Mmmm, what’s Plan B? 75 Riversdale Road Hawthorn. passed in $2,600,000 0 bidders

Kew, 18 Hartington Street. Michael Wood (Marshall White) after auction, $2,085,000, 0 bidders

Ashburton, 7 Taylor Street. Andrew Wilkie (Jellis Craig) after auction $1,760,000, 2 bidders

Hawthorn, 6 Camden Road Hawthorn. Andrew Gibbons (Marshall White) before auction, undisclosed

Hawthorn East, 23 Bowler Street. Anthony Smith (Woodards) under the hammer $1,245,000, 2 bidders

Hawthorn, 23 Kinkora Road. Passed in $4,000,000, 0 bidders

Surrey Hills, 10 Benwerrin Road. Passed in $3,200,000, 0 bidders

Hawthorn, 33 Manningtree. Passed in $3,025,000, 0 bidders

Balwyn, 31 Monash Avenue. Passed in $3,000,000, 0 bidders

Surrey Hills, 26 Wharton Street. Passed in $2,800,000, 0 bidders

Hawthorn, 75 Riversdale Road. Passed in $2,600,000, 0 Bidder

Surrey Hills, 84 Guildford Road. Passed in $2,550,000, 0 bidders

Camberwell, 24 Glencairn Avenue. Passed in $2,400,000, 0 bidders

Hawthorn East, 17 Miami Street. Passed in $1,951,000, 1 bidder

Kew, 31 Rowland Street. Passed in $1,710,000, 0 bidders

Hawthorn East, 5 Miami Street. Passed in $1,686,500, 2 bidders

Read all 40 James auction reports

2018 Summary

In the last month in Bayside, not one volcano auction (4 bidders or more) was recorded by us.

2 in every 3 auctions during this supposedly good time to sell (either side of Melbourne Cup) were not actually auctions at all, as they were either ducks (0 bidders) or lone rangers (1 bidder).

Bayside needs a widespread change in how it does business in 2019.

6 Sunlight Crescent, Brighton East – Jack Johnstone, 3 Bidders.

Brighton, 8 Hector Street. Samm Brown (Marshall White) bought before auction $2,820,000

Albert Park, 157 Kerferd Road. Lachie Fraser-Smith (Jellis Craig) sold after auction $2,332,000, 3 bidders

Brighton East, 6 Sunlight Crescent. Jack Johnstone (Marshall White) after auction $2,275,000, 3 bidders

Brighton, 47 Montclair Avenue. Nick Renna (Jellis Craig) under the hammer $1,570,000, 2 bidders

Hampton, 5 Lagnicourt Street. Robin Parker (Marshall White) before auction, undisclosed

Brighton, 45 Brickwood Street. Stephen Smith (Marshall White) bought before auction, undisclosed

Elsternwick, 1 Regent Street. Passed in $3,000,000, 0 bidders

Hampton, 136 Thomas Street. Passed in  $2,500,000 0 bidders

Hampton, 3 Raynes Park Road. Passed in $2,050,000, 0 bidders

Brighton East, 19 Dunoon Court. Passed in $1,725,000, 0 bidders

Brighton East, 11 Alford Street. Passed in $1,700,000, 1 bidder

Elwood, 83 Byron Street. Passed in $1,260,000, 0 bidders

Read all 40 James auction reports

With the help of Jellis Craig, Kay & Burton, Fletchers, Nick Johnstone and Marshall White agents we have raised through the 11Climbers group over $150,000 since 2015 for African Child Surgeries (PlasterHouse). If this Christmas you want to find out more, please click thru. 100% of your tax-deductible donated money gets to the end user and you help a child get out of an awful situation – we have seen the results first hand 3 times. If you like a free Market News during the year, why not donate $50 or $100, please.

As we begin to wind down for 2018 we think the market could be summed up by

Pockets of strength, but lacking overall depth.

This is true, but it is also spin.

What is also true of 2018, it’s been a shocker for many sellers,

* (average land price drop around 15%),

* a shocker for agents and advocates (between 30% and 50% down on turnover),

* a shocker for Ad revenue

* and a shocker for many buyers who are looking for good properties (A-graders few and far between).

That was not spin and neither is this.

The Inner Melbourne market is a healthy one, one that is in transition.

Our market is one of robust fundamentals (population, money, land), one that is moving from a runaway express looking for a place to crash, to a more manageable vehicle looking to be lost in the freeway of life.

Perhaps the levers have been pulled too hard on the money supply – but probably not and in time they will be eased. Congrats again to the governments, APRA, FIRB and the Reserve bank boys and girls, you have done a sensational job in the last 18 months in arresting a disaster that was about to happen.

Why we think things are getting healthier.

Look at the new political topics of discussion:

* Infrastructure

* Population and immigration management

* Tenancy laws and negative gearing

* Homelessness and young people

rather than

* More, more, more money for us oldies who already have more than enough, when we sit down and think about it.

Looking forward to 2019 and the February auctions.

We will finish with our prediction on what will happen in the markets.

Sorry, no bloody idea short term,

Long-term our fundamentals remain as strong as ever!

In 2018 we were back to normal – well-priced quality sells well and the rest only does if you lower the price enough.

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 21st December – 9804 3133.

We return after our break mid-January 2019

Main roles we are involved in now:

* Peninsula properties

* Off-markets and homes that can be bought now, going to market in 2019

* Discussions around selling and buying strategies with existing and potential clients for next year

Thank you’s

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

Thank you.

Thank you to Ross Savas and James Connell in particular and to all the key estate agencies (Richard Earle, Al Craig, Andrew McCann, John Bongiorno, Michael Gibson, Scott Patterson, Nick Johnstone, David Hart, Jeremy Fox and many, many more) who have never restricted our ability to report auction results in 2018 – even when the results have shall we say been ……. less that great.

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

To the James Reporters (Randall, Kathy, Brig, Catherine, George, Phoebe, Nat, Kieran and others throughout the year)  – thank you and see you at our Christmas Lunch.

To Simone thank you very much for coordinating the auction reporters and reports and all the other things you do, like fixing up my many mistakes – backed up by Phoebe and Nat.

To Anne, thank you for your ear on some tricky issues and help with the 11Climbers community group.

Thank you also to Craig and Ali Tiley, Nick and Lil Mazzeo, Mark Cubit, Richard Keany, Kevin Altermatt, James Connell, John Baldock, Antonio and Marisa Grossi for your assistance with 11Climbers and to all those who have donated during the year to Launch for the Melbourne Homeless or African Child Surgeries through PlasterHouse.

To Chris, Stephanie and Victoria thank you for the legals and keeping us and our clients off other solicitors’ Christmas card lists.

To architects Henry Tinsley and his team, Geoff Challis. Kathryn Robson and the many others who have helped from time to time – thank you.

Thank you to Luke and others for flexibility in our pest and building requests.

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

To Randall and Kathy, well done on your Q-rates – brilliant start.

Thank you to Emily Powell and Alice Stolz for encouraging a Market Moves article in the Domain Magazine going forward.

Thank you to the Hayward clan; Lyndon, James, Chris and Helen for their work for the Warleigh Grove Housing project to encourage more intergenerational living.

To Wan Yi and Soushi at AWD, our IT people, we really appreciate all your efforts.

To our accountant Stephen from Hillyer Riches – we don’t know how to say this, but we actually understand the reports you send us – thank you for your care.

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

To Gina thank you, thank you for all you have done this year, a mighty effort in a very difficult market.

And finally to our James Buy and Sell clients – thank you for your significant support, for hanging in there with us – yes, it has been a tougher year, but you know what, not really – we’ve actually enjoyed it – we really have.

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