Opening Market 2020 – second surprise

Harry and Lachie, Alice and Mark, happy clients with Gina. Bought under the hammer.

What a difference a week makes and who can figure – go figure.

Last week the Inner Melbourne Clearance Rate was 59%. This week, after the biggest economic fall since the GFC, it’s 81%.

Bidderman has gone up from 1.6 to 1.8 on 42 auctions.

Volcanoes have doubled to 20% (last week 10%) and ducks have halved to 25% (last week 50%).

Under the hammer (sold on the street) was 1 in 3 last week, this week it was 1 in 2. 50% is a very high hammer rate – lots more sold before, so that means agents were on their game and the clearance rate improved over last week.

Was this week a run to safety as the stock market imploded?

Was last week more about stock quality and sleepy agents thinking the homes would sell themselves?

Last week we took an additional stat, which made us think we were in a Coronavirus market. This week we counted a similar indicator and it was even weaker than last week, yet the market did a backflip on its backflip of last week. The drivers of today’s market were not overseas Asian money in any way and yet the market was super solid…. interesting paradigm change? Still too early to call – but we are all watching.

Marty Fox, 114 Carpenter Street, , $2,920,000, 2 bidders.

We had our best February ever and this week 3 buys and 2 sells.

However, all wasn’t rosy in my garden.

I really affected a client’s chances of buying a home and I offered my resignation two days out from the auction and it was rightfully accepted.

Those clients bid on the home themselves but were not able to buy it – even though it was at a good price, within the selling agent quoted range.

This week there have been some real reminders for me, that I am not as good as I think I am at times.

There should also be some real learnings for those out there who “think” they know value.

BUT this is not about a value “mistake” – all agents (including me) make them all the time. In fact, interviewing agents in Toorak right now for a $5m job – well maybe it’s a $7.5m job because that’s the range of agent estimates so far.

No, my mistake was in process. Good valuing is about good process and this error will live with me for some time. The last time I felt this bad was around 15 years ago when I “knew” an agent was bluffing me when he said he would sell to another buyer at a pass-in. I challenged him to sell it and he did. That was Mark Dayman and I really like him; he taught me a valuable lesson about who makes the decisions (clue: not me, my client makes the decisions and I didn’t give them an opportunity). We changed our processes over that mistake  – our clients were devastated and rightfully sacked me.

Today on a home I was over the odds by 20% on the final result on one home – I am not here to defend or mitigate or show you how many times I’ve got it spot on. This week I threw a curveball to my clients when I should have been catching it for them. I caused harm when I should have helped. The issue wasn’t the 20% as we didn’t offer it and we were never going to.

The issue was my process. I really liked this home, I recognised its issues and correctly stated them and arranged architectural options. I went through the full due diligence process including peer review and agent checking. But I accept total responsibility, it was entirely me who got it wrong.

In pricing this week I simply put the numbers forward to the client, knowing it had to go to auction and well I just didn’t think. BIG MISTAKE IN PROCESS. Normally I would ask more questions as to what they expected of me and point out my error rate on values. My error rate is 2 in 10 in flat markets and 4 in 10 in moving markets (meaning I’m greater than 10% off final result). Over the years we have developed processes to mitigate my errors and make all risks clearly understood to clients when the possible error cannot be completely eliminated.

In this instance, I did not prepare the client or follow through correctly on the figures I presented and therefore, I presented the figures in a manner they took as a fait accompli. Those figures and what they thought they meant, shocked them and it broke the trust. My process was so poor.

No amount of spin could reinstate that broken trust and I offered my resignation end of the week, as I still wanted them to buy this home. I thought they had a greater chance to do so without me. Today my clients (ex) were unable to buy – in part because I had unnerved them.

I apologise unconditionally and whilst kind words were said afterwards by them and an offer to continue working, I advised that once trust is broken it’s hard to recover. Our business is not a perfect science, so you do need to be able to move freely, be open about the negatives and the positives and hang in there and work together to get good deals. Trust breaches crush creativity, nimbleness, actioned risk-taking and ultimately good prices for you the buyer or the seller.

Yes, if you break trust with your selling or buying agent or vice-versa that should be terminal and it’s a very common and significant reason as to why you probably got or will get a poorer outcome.

The learning here is what I say to every potential client (but I forgot this time)  – only you can determine value – not me – my job is the price and it’s not an exact science. Many think they know the value – but good value is not a lucky number as at the casino. Good value is a good process of doing what you really really want to do and bad value is a bad process of not doing what you really want to do. We as agents give you that process (good or bad) and your price will come from that.

Today, in this one instance, my process was a shocker and I have no excuses – I am truly sorry.

So another Boroondara ratepayer has $1 million (agent Paul Richards opinion) wiped off his family’s wealth by a single dwelling Heritage order, which was apparently discovered after the auction campaign had started. That auction in Glen Iris was pulled today – not good at all.

Big deal you say! Well, it is.

Current Heritage definitions say that one person who you don’t know, can on a drive-by of your home – completely change your life, your finances and your health.

Property owners have rights you say – well suing is not easy – as government definitions allow Heritage open slather.

As well there is a growing “industry” and individual homeowners are the new “add-ons” being sacrificed to feed the ever-hungry Heritage beast.

  1. The Heritage Studies we looked at are dominated by one or two companies – look into their diversity of thought at the top.
  2. Read the briefs – the Heritage consultants are asked by Boroondara to go and identify. They are not asked if there are any. Do you think they would get another study if they couldn’t find any? AND the “definitions” allow a Heritage to be found on every street corner?  Like us real estate agents, consultants are all paid on results. Each result found helps justify the job, but really hurts the individual homeowner. And shock horror plenty were found – how could we as a community have missed all these for the last 50 or 100 years. Lucky we did the study hey, let’s do another one. Well lucky unless you are one of the homeowners about to lose a lot of money and your property rights.
  3. Heritage consultancy seems to be a growing business – the two companies we looked at in this study are advertising for new staff.
  4. The Glen Iris architect at the centre of this – had you heard of him? Well, he was written up on the website of one of the Heritage consultants as an unsung hero. Now we all have our cults and heroes, but my passions don’t cost you $1million.

Surely a truly “independent” investigation into the damage caused to individual homeowners is warranted. There are hundreds of people involved – there are 100 objections alone on this one small Glen Iris study below.

Heritage precincts and existing Heritage orders make sense and we support them 100%, but new isolated Individual Heritage Orders on the individual homeowners are in many cases, only there for the ……………”heritage industry” and hurt the health and finances of the homeowner.

We have recommended Heritage Architects for a number of homes we have bought. Highly skilled and passionate people – their role is really needed in precinct Heritage and consented individual Heritage projects.

But I digress.

Let’s talk about money

If the State government drove a freeway through 20% of your land you’d be compensated. Why should the imposition of single Heritage Orders that affect retirees and families not be the same, when a Heritage order drops values by 20%? If the community benefit is that important, then the community should pay for it, not the isolated individual.

Here are the council’s and state governments responses to your Heritage money problems.

The Glen Iris Heritage Gap Study – Going to Council Monday March 2 – many objections, many individual homes have been targetted

From Boroondara Council

Paragraph two – the State Government and Boroondara Council seemingly don’t care if a pensioner or young family lose money on Heritage

You want to develop your property – and you thought you could – the State Government and Boroondara Council seemingly don’t care 

Your property is falling down around you – the State Government and Boroondara Council seemingly don’t care 

Current owners have no idea when they purchased it was to get a Heritage overlay — the State Government and Boroondara Council seemingly don’t care 

We rang the Boroondara Council

Question: Will there be any compensation for vendors for Glen Iris Heritage Gap Study?

Answer from council: No

Question: Who decides what is an important heritage consideration?

Answer from council: The Glen Iris Heritage Gap Study, Boroondara council

Let’s talk decisions using definitions of Heritage then.

Is there anything not covered? Are these guidelines or open slather. The individual has no protections as you can see from above.

And here is the one definition everything hangs on. Mmmm well that’s clear.

The above definitions make it hard to defend so you need to think laterally.

Join the dots please media and lawyers on the compartments of narrow thought.

We suggest you start with the actual briefs and the make-up of the Heritage studies on the individual homes – are they really independent?

Defending the seemingly undefendable

  1. You have been targeted based on a narrow opinion. You will have to challenge the independence and validity of that opinion. Architects can be wonderful people but they are not the whole of the community. Cultural Heritage is not for experts, it’s for the community. Cultural and Heritage could be better connected with democracy not autocracy.

  2. Renovations are another key to your defence as it changes the nature of what is claimed as culturally important.
  3. Possibly considering advertising and taking on joint cases – although that seems difficult as its really a case by case basis due to broadness of Heritage definitions.
  4. We recommend you consult this firm LOVELL CHEN to assist you in your defence – they are Heritage Architects – we’ve found them smart and ethical. They were successful on Haverbrack Avenue. We have recommended them before. We have no financial interest in the recommendation.

For the record, this stance is not from self-interest – we totally support known-when-purchased individual Heritage orders and we support consideration of new precinct wide Heritage orders (eg whole street or area) but not isolated Individual Heritage orders added after purchase without owner consent. We do not work for developers and no client or co-worker has a Heritage issue. We have no financial interest in this article.

This is about fairness and property rights of the individual.

This is not an isolated case – here is another article – the cost to the owner was a failed auction, barrister and heritage architect fees to defend and it was thrown out anyway. SURVIVING STONNINGTON HERITAGE . Declaration: We did buy this home for a client at auction after the Individual Heritage Order was thrown out.

All volcanoes well over the quote

Robin Parker $3,105,000, 6 Bidders. 87 Abbott Street, .

SANDRINGHAM, 87 Abbott Street. Robin Parker () Under the hammer $3,105,000 6 Bidders
ISP: $2,500,000 – $2,700,000

HAWTHORN, 9 View Street. Adam Garvey (Garvey & Company) Under the hammer $3,605,000 5 Bidders
ISP: $3,000,000 – $3,300,000

GLEN IRIS, 53A Maitland Street. Andrew Hayne (Marshall White) Under the hammer $2,680,000 5 Bidders
ISP: $2,200,000 – $2,400,000

, 11 Foote Street. Kaine Lanyon (Marshall White) Under the hammer $2,602,000 4 Bidders
ISP: $2,200,000 – $2,400,000

, 50 Mills Street. Stephen Tickell (Belle Real Estate) After auction $undisc 4 Bidders
ISP: $2,100,000 – $2,300,000

MALVERN, 24 Embling Road. Justin Long (Marshall White) Under the hammer, $5,406,000 4 Bidders
ISP: $5,000,000 – $5,250,000

CANTERBURY, 8 Stanley Grove. Peter Vigano (Jellis Craig) Under the hammer $3,780,000 4 Bidders
ISP: $3,000,000 – $3,200,000

HAWTHORN, 83 Illawarra Road. Hamish Tostevin (Marshall White) Under the hammer $3,060,000 4 Bidders
ISP: $2,500,000 – $2,750,000

Read all 43 reports here

David Hart, 46 Black Street, Brighton. $3,450,000, 2 Bidders.

BRIGHTON, 19 Huntingfield Road. David Hart (Buxton) Under the hammer $3,450,000, 3 Bidders
ISP: $3,000,000 – $3,300,000

MIDDLE PARK, 40 McGregor Street. Oliver Bruce (Marshall White) Under the hammer $3,040,000, 3 Bidders
ISP: $2,700,000 – $2.950, 000

BRIGHTON, 119 Cochrane Street. Stefan Whiting (Buxton) Under the hammer $3,110,000, 2 Bidders
ISP: $2,700,000 – $2,900,000

BRIGHTON, 46 Black Street. David Hart (Buxton) Under the hammer $3,625,000, 2 Bidders
ISP: $3,000,000 – $3,300,000

BRIGHTON, 114 Carpenter Street. Marty Fox (White Fox) Under the hammer $2,920,000, 2 Bidders
ISP: $2,400,000 – $2,600,000

, 20 Scott Street. Sam Gamon (Chrisholm & Gamon) Under the hammer $2,640,000, 2 Bidders
ISP: $2,500,000 – $2,650,000

SANDRINGHAM, 72 Edward Street. Mark Earle (Buxton) Under the hammer $2,600,000, 2 Bidders
ISP: $2,200,000 – $2,300,000

BRIGHTON, 134 Head Street. Adam Gillon (Buxton) After auction $undisc 2 Bidders
ISP: $2,500,000 – $2,600,000

BRIGHTON, 112 Esplanade. John Crouch (Century 21) Bought Before $undisc
ISP: $4,750,000

BRIGHTON, 7A Tennyson Street. Barb Gregory (Marshall White) Bought Before $undisc
ISP: $3,200,000 – $3,400,000

MIDDLE PARK, 163 Richardson Street. Oliver Bruce (Marshall White) Before auction $undisc
ISP: $3,000,000 – $3,300,000

SANDRINGHAM, 1A Southey Street. Passed in $3,500,000, 2 Bidders
ISP: $3,300,000 – $3,600,000

ALBERT PARK, 1 Dinsdale Street. Passed in $2,600,000, 0 Bidders
ISP: $2,600,000 – $2,800,000

MIDDLE PARK, 117 Harold Street. Passed in $5,800,000, 0 Bidders
ISP: $5,800,000 – $6,300,000

Read all 43 reports here

53a Maitland Street Glen Iris. Andrew Hayne, 5 Bidders, $2,680,000.

TOORAK, 11 Toorak Avenue. Justin Long (Marshall White) Under the hammer, $4,575,000, 2 Bidders
ISP: $4,000,000 -$4,400,000

ARMADALE, 20 Glassford Street. Iain Carmichael (Jellis Craig) Under the hammer $3,550,000, 2 Bidders
ISP: $3,000,000 – $3,300,000

MALVERN EAST, 37 Westgarth Street. James Tomlinson (Marshall White) Under the hammer $undisc, 3 Bidders
ISP: $2,605,000 – $2,800,000

MALVERN EAST, 13 Turner Street. Doug McLauchlan (Marshall White) After auction $undisc, 1 Bidder
ISP: $2,700,000 – $2,970,000

MALVERN EAST, 32 Emo Road. Charles Boyd (Jellis Craig) After auction $undisc, 1 Bidder
ISP: $2,400,000 – $2,600,000

ARMADALE, 62 Denbigh Road. John Morrisby (Jellis Craig) After auction $undisc, 1 Bidders
ISP: $2,950,000 – $3,200,000

GLEN IRIS, 36 Erica Avenue. Andrew Hayne (Marshall White) Before auction $undisc
ISP: $2,500,000 – $2,750,000

MALVERN, 214 Wattletree Road. Andrew James (Belle Property) After auction $undisc, 0 Bidders
ISP: $3,000,000 – $3,300,000

MALVERN, 31 Glendearg Grove. Passed in $2,600,000, 0 Bidders
ISP: $2,500,000 – $2,750,000

MALVERN, 67 Claremont Avenue. Passed in $4,000,000, 0 Bidders
ISP: $4,000,000 – $4,400,000

TOORAK, 8/2 Lansell Court. Passed in $3,500,000, 0 Bidders
ISP: $3,500,000 – $3,800,000

Read all 43 reports here

8 Stanley Grove Canterbury. Peter Vigano, 4 Bidders, $3,780,000.

HAWTHORN, 19 Fairview Street. Anthony Grimwade (RT Edgar) Under the hammer $6,070,000, 2 Bidders
ISP: $5,000,000 – $5,500,000

MONT ALBERT, 93 Windsor Crescent. Walter Dodich (Kay & Burton) Under the hammer $4,025,000, 3 Bidders
ISP: $3,480,000 – $3,800,000

HAWTHORN, 8 Lawes Street. Sam Wilkinson (Kay and Burton) After auction $3,625,000, 1 Bidder
ISP: $3,400,000 – $3,600,000

KEW, 4 Balmoral Street. Doug McLauchlan (Marshall White) Under the hammer, $3,450,000, 2 Bidders
ISP: $3,200,000 – $3,500,000

CANTERBURY, 30 Logan Street. Peter Vigano (Jellis Craig) After auction $3,200,000, 2 Bidders
ISP: $3,000,000 – $3,100,000

CANTERBURY, 45 Matlock Street. Stuart Evans (Marshall White) Bought Before $undisc
ISP: $2,850,000 – $3,100,000

HAWTHORN EAST, 14 Mowbray Street. James Tostevin (Marshall White) Bought Before $undisc
ISP: $4,000,000 – $4,400,000

KEW, 45 Campbell Street. James Tostevin (Marshall White) Bought Before $undisc
ISP: $2,600,000 – $2,800,000

CANTERBURY, 171 Mont Albert Road. John Redfern (Marshall White) Bought Before $undisc
ISP: $2,800,000 – $3,080,000

CANTERBURY, 12 Grange Avenue. Passed in $4,800,000, 0 Bidders
ISP: $5,200,000

CANTERBURY, 49 Chaucer Crescent. Passed in $2,900,000, 1 Bidder
ISP: $2,700,000 – $2,970,000

Read all 43 reports here

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