oc | Thursday 1st October

The market can get better, quicker.

Walking in the weather this week was mind-clearing and I miss those mountains.

It’s 6.00 pm Saturday and it’s been a solid week with the market seemingly turning one small corner, as a few more venture back out.

Two sweet little deals over the line (Sam Rigopoulos from Jellis Craig and Mark Konishi from Belle ), the phone rings again and maybe there is a sneaking thought its an OK time to buy.

Time for sellers to market for a big price? Nope.

Time for buyers to witness some price freefall? Nope.

Just maybe time for all of us to catch our breath and witness a small degree of levelling, as the next corner turn prepares to arrive.

Before we go any further and it’s a positive show today, can we ask how ya doing? Need to chat? Ring us, it’s not money, it’s community. We’re here.

I like New York, The Times and The Daily podcast – this is a short one for when you need a little comfort to drift back to sleep. Enjoy.

A good work week, a nice little interlude, the first in a while. Feels like many of us are waking up! Good stuff!

Executive Summary

  1. Where is the market really at?
  2. Growing the market
  3. Auctions – from May 8th – Please, out with Public and in with Private
  4. Multi-listing
  5. Online Auctions – real life experiences
  6. The May 2020 – 100 Auction Test is ON (sort of)

1. Where is the market really at?

It’s not as good as the Corelogic Index stated at the start of the week and it’s not as bad as the Domain headlines are at the end of the week.

The April market never really had a chance – school holidays, Easter, Anzac Day, deals that were brought forward to March or pushed back to later and of course, the virus. We were surprised that at the end of March, April wasn’t simply cancelled due to lack of interest and we moved straight to May!

Bank lending, our attitudes to other Asia(ns), migration and population growth are the big picture drivers recently and currently they are all a bit iffy.

In particular, the banks are putting some fear back into potential borrowers and it’s hard to blame them – their loan books are unknowns, once the interest moratorium stops.

This will stall any quick recovery in the residential market if it worsens.

As we said last week, Actioning Demand is considerably weaker although, Underlying Demand is there – “lurking”.

Supply is a similar story – there are a lot of lurkers.

The reality is in the current new market, price has weakened.

In the graphic below we try and show you the market differences.

In February, it was all things happening, albeit with some volatility. In April, most players are on the sidelines – just like our footy teams.

2. Growing the market – Growing the trust

How can we remove a few barriers easily and stabilise/grow our high-end market so it doesn’t go lower than it has to, for longer than it needs to?

Last week we said for the market to grow again, the players needed to see Belief, Trust and Fluidity (money). In other words, we need to move underlying demand to action demand

This week, we say congrats to Dan and the Overseas Students support announcement – that is a humanitarian and smart start to keep us slightly positive in the Asia bubble. If we want to accelerate out of our current predicament, then Asia and people within will be a short term key to any residential property market improvement (if our governments’ channel, monitor and manage well).

Today, we are focusing on building Trust by breaking down barriers within our Melbourne market system.

Remove those barriers and associated frictions or they will hold our market lower than it has to be, for longer than it needs to be.

Yes to tax reforms and new ideas and innovations but whilst they are being debated by our pollies, here is what we could get going on May 8th to grow our market NOW.

We think a better market is positive for more taxes, more jobs and more community comfort on our macro and more options for buyers, sellers and agents on a micro-scale.

Please consider Private NOT Public or Online Auctions May 8th.

Please consider Multi listings now.

3. Auctions – No to Public and Yes to Private

On May 8th, please Dan and please Professor Brett we need your help if you want our market and your tax take to grow.

We know you’re busy, so here is the idea in simple bullet points;

A. Virtual inspection experiences are working well. Keep as is.

B. Single person Open for Inspections are also working well – we can live with that. However, if you felt comfortable to relax to say 2 or 3 at a time through a home that would be great – but if not we can live with one on one.

C. Auctions – Online auctions may be a way of the future but that future is some time off – please read our experience this week below.

May 8th or as soon as you deem safe, we suggest – PRIVATE AUCTIONS limited to 10 people on the premises – all socially distanced of course – similar to funerals. This can be easily achieved in this market with selling agents putting all potential bidders through a verifying process to limit the numbers PRIOR TO PRIVATE AUCTIONS BY INVITATION ONLY – NOTHING PUBLIC.

Dan and Brett, we know this works as a number of agencies such as Abercromby’s, Kay & Burton, Marshall White, Buxton and Jellis Craig have run private auctions in the past. We have attended and bought at many and only once have we seen even near 10 potential bidders, at any one private auction.

Face-to-face auctions can bring confidence and trust back in the market, which in turns improves the market.

With improvements, there are more options for buyers and sellers, more jobs directly and indirectly and more taxes for you Dan.

Moving Underlying Demand to Actioning Demand

D. Maybe you could insist all agent quotes contain the reserve to reduce the chances of unnecessary travel. But hey, that’s only a hobby horse of ours, not a dealbreaker!

4. Multi-listing

Let’s get our markets back to rising gently by WORKING TOGETHER through Multi-Listing.

Attention please: Sellers

We think a multi-list system that works overseas very well and is particularly suited to off-markets can work here in Melbourne.

MORE AGENTS with MORE BUYERS to your home.

FREE TO ADVERTISE HERE (10,000 readers weekly) and it costs NO MORE in commissions.

How does it work?

Who does it benefit?

Can it work for you?

Any problems with Multi Listing?

Watch this 2-minute video?

So it’s free to start and it costs no more – what’s the catch?

The catch is – it is different and innovative!

Maybe I should consider, not a lot to lose!

Sellers – Do you want more buyers to your door from more agents at no extra then please call

Gina 0457 835 255 or Mal 0408 107 988 or ask your agent to get in touch to REGISTER INTEREST.

Agents – it’s totally free to advertise your client’s home and your services and 100% of the commission will go to the active buying and selling agents – 100%, no admin fees or agency cut. Commission sharing is simple: as is any conjunctional – you nominate the amount and confirm via an email. Database – it’s yours, not ours, we don’t want it.

Gina 0457 835 255 or Mal 0408 107 988

Buyers – if you want to be kept informed.

Gina 0457 835 255 or Mal 0408 107 988 or ask your agent to get in touch to REGISTER INTEREST.

More information on the soft launch in the next week. Suggestions welcome – let’s get our markets back to rising gently by WORKING TOGETHER through Multi-Listing.

Moving Underlying Demand to Actioning Demand

Online Auctions may be the way of the future – but right now they would be harder than a street auction for many buyers.

5. Online Auctions – A review from a buying insider – us!

There is a lot of talk in the media, but little within the Melbourne market about Online Auctions.

Here are our thoughts from our first one just gone:

  1. They are harder for an inexperienced buyer to prepare for, than a normal auction.
  2. The identity requirements for an auction online are more onerous than a street auction BUT are fair and reasonable.
  3. Our best advice is agents should avoid any proprietary technology and go with what buyers feel comfortable with, such as phones and streaming. At least have them as a side by side option.
  4. We spent hours preparing the admin and logistics and had 3 people involved in the auction plus the client. One on the phone to lawyer and agent, one typing in and confirming bids and one thinking and coordinating with the client. How an inexperienced buyer by themselves does it – is beyond us!
  5. The agent was helpful, ethical and our client had the highest bid – so no sour grapes in our comments.
  6. Our strongest recommendation to the industry – Auctioneers please sit down and slow down. New technology requires new protocols.
  7. Overall, we got a real buzz for our client in victory, but personally, first up we found it challenging. Second up will be easier but many buyers won’t get a second up.
  8. Buyers, we recommend you have support if you are taking this on.
  9. In fairness – it did get the job done at a price above the reserve.
  10. Overall it worked, but it wasn’t easy.

6. The May 2020 – 100 Auction Test is STILL ON

It’s just we have changed the rules.

Instead of 100 Auctions, as we tested in May 2019 and 2018, we have randomly chosen 100 high-end homes (that may have gone to public auction) and we will give them 5 weeks to see if they sell – as per a 4-week auction campaign plus a bonus week. Let’s see how many are sold and that will be our May 2020 clearance rate.

May 2019 – 1st, 2nd and 3rd weeks

Bidderman2

May 2018 – 3rd week

BiddermanMay2018

These are our sample 100 for May 2020

Cut off June 6th @ 6.00 pm

Here is our May 2020 test Top-end criteria (adjusted to the wet track conditions)

Below 30% – very tough as in a GFC type market

Above 40% – better than you think

Above 50% – the market is almost rocking all things considered.

Anecdotally, some deals of the last week. Yep, things are still happening, just not as much!

Hi Mal, here is the story with the sale of 18 Redvers St, Surrey Hills

  • Quiet Cul-de-sac location
  • The current vendor purchased the property around 50 years ago
  • 3 bedroom/2 bathroom/Single level house – appeal was a flat block
  • Price Guide: $1.5m-$1.65m – online auction
  • Sold prior to the auction (via a buyers advocate) for $1.73m under competition

Tim Heavyside

Hi Mal, 209 Page St, Middle Park

  • Unrenovated SF Vic Wb on a lane
  • Listed for Private Sale at $1.5m-1.65m on 15th April, online with photos and floorplan
  • Private one on one appts. commenced as expected/allowed in the current environment
  • Buyer A stepped in and got serious on day 6, happy to pay towards the top of the guide
  • Buyer B also showing interest at a similar time frame
  • Offer at top of price guide on say day 7 triggers the property onto the market, Buyer B notified and a sale deadline is agreed upon for day 8
  • Day 8, both buyers compete/submit their highest and best offers, property sold on Day 8 for $1.686m

Kaine Lanyon

Hi Mal, 5, 7 & 9 Rose Street, Brighton – circa $9m

Each owner’s journey began approximately 24 months ago when they decided to list their properties together with the intention to offer all three properties as a single development site. The site consisted approximately 1900 square metres in the Martin Street activity zone with rear lane access.

The owners engaged two agents from different real estate agencies in Brighton over the 24 month period, but unfortunately, were unable to secure their price. I listed these properties in February 2020, despite current restrictions and uncertain times, the properties have now been sold off-market (approx. $4,688 per sqm).

Sam Taylor

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