With over 350,000 spectators expected to make their way to the Spring Carnival over the weekend, I didn’t expect to see huge crowds attending the auctions, however even though the housing market has taken a knock over the last few months, there is clearly enough people at least ‘monitoring’ the market to attract groups of buyers to the auctions who haven’t been deterred by financial jitters.
It’s fair to say those vendors who need to sell, have now accepted our market is constrained by sentiment and questions of affordability; and therefore most have reduced expectation to the level needed to ‘do the deal’. There is also the added pressure of stock in the inner and middle rings dropping markedly in comparison to last year, and the knowledge that if you don’t take advantage of what’s on offer now; you can guarantee there won’t be many more chances until we kick off again after Christmas – (which essentially means February.) Therefore unlike last weekend, where many were hanging back with a preference for after auction negotiation, today’s results were producing at least a few competitive sales – albeit with slow starts.
The major consensus of opinion is that they’ll be an interest rate drop on Tuesday – so confident is the call, you’d think the reserve bank had already announced it in advance! However; whether there is or not, is irrelevant because it’s not likely to have any noticeable effect on housing market prices – at least not in the short term. Interest rate movements generally have repercussions on the market when they shift in a succession of ‘short sharp shocks’ which kick buyers into action – a minor alteration to interest rates one way or the other is unlikely to have this effect. It does, however, get people thinking when there is a change to the RBA bias, but whilst the priority is focused on saving and not spending, it’s unlikely this trend will change overnight. Therefore although a cut will be a welcome breather for mortgage holders, small business, and retail traders, it’s not going to make much of an inroad into the current real estate domain.
There are only a few more weeks left for new stock to come onto the market before the agents take their annual break – especially if it’s an auction sale. Auctioneers are warning bidders they only have 6 weeks left to purchase prior to Christmas. This line was repeated more than once during the weekend’s preambles. However at the moment it’s full steam ahead and impossible to paint the market one colour – it’s a mixed bag. While some suburbs have slumped and continue to do so, others have experienced healthy gains and are showing signs of recovery. The opportunists and active investors still have time to take advantage of the lingering listings and odd distressed vendor if they want to get a foot through the door prior to the New Year. There are a few bumper weekends left before we can take stock and benefit from a bit of hindsight over what’s been turbulent year – and not one many will hope to repeat in 2012. As for the clearance rate – another weekend of ordinary figures – 53% – however turnover holding steady with a total of 706 properties sold.
Passed in on a Vendor Bid
12/29b Hampden Rd Armadale seemed to have all the ingredients to attract competition but the essential one – bidders! Quoted $550-$620K a decent sized crowd of 50 or so people turned out to watch this 2 bedroom Art Deco apartment go under the hammer. The rain had just stopped and therefore it was nice enough to stand outside and enjoy the show. A good pre-amble from Andrew James gave an upbeat review of the location – close to transport, shops and so forth. However none of this inspired. After failing to get an opening bid he kicked off with a vendor bid of $560K. A short trip to see the vendor and a warning that should he pass the apartment in without a genuine bid, buyers risked an ‘auction after the auction’ as no one would have right to exclusive negotiation still didn’t inspire. The property passed in on a vendor bid with a reserve of $640K. As is always the case these days, a fair few approached after the auction to ‘talk’, however no negotiation was concluded.
Sold under the hammer
Mortgagee auctions always gain attention with buyers generally expecting the reserve to be lower than would be the case should there be an emotional vendor. 49a Daley St, Bentleigh, was perfectly suited to attract a crowd – especially considering the location was a mere hop from Bentleigh’s shopping strip and train station. The home was suited to a range of buyers – downsizers, first home buyers, young couples- 2 bedrooms 2 bathrooms and no owner’s corp added to the attraction. The crowd attending was close to 100 – however I suspect many were neighbours. It had been quoted $580K+ however as with all the auctions today, the bidders weren’t eager to start. Eventually someone pitched in with a bid of $450K which didn’t impress the auctioneer who straight away came over the top with a vendor bid of $520K. Two buyers took the fore, and after a series of tit for tat bids the property reached its reserve of $580K. The hammer finally went down at $605K which represented fair market for a mortgagee sale.
‘Flew’ selling under the hammer
2/33 Toolambool in Carnegie was set up to attract the largest crowd of the day. Perfectly placed for first home buyers and investors and quoted in the low $300K– a good sized one bedroom with the unusual feature of a large courtyard which is fairly unique for this type of property. A crowd of over 100 attended and the auctioneer seemed to have no doubt there was healthy interest. However it didn’t stop the need for a vendor bid to kick things off which he pitched at $290K. Six bidders attended this auction and in no time at all it had reached its reserve of $335K. The hammer went down at $353,000 which again represented fair market value for what was on offer.
Sold under the hammer
The prize for the best development/renovation project of the day had to go to 39 Belsize Av, Carnegie – an old Edwardian house on a block of land measuring 679 sqm with an 18m frontage. Around 30 people showed up to watch the auctioneer put on a show. However, quoted at $760,000 – $840,000, no one gave any initial interest and the auctioneer was forced to open on a vendor bid of $760K. Met with further silence, the auctioneer took his half time break and returned to place a second vendor bid of $780K. It looked as if the home may pass in however one of the agents in the crowd had worked his magic on a budding bidder and managed to inspire the confidence needed to kick in with a rise of 10K. This created a small snowball effect and competition eventuated between two bidders. The property was announced on the market at $820K, but didn’t sell until it reached a healthy $853,500.
Passed in – not unexpectedly – on a Vendor Bid
Finally 54 Hanby St Brighton made its auction debut today. Purchased only 3 years ago in 2008, the house offered all the right ingredients for a luxury lifestyle (theatre, gym, swimming pool, moments to the beach, huge land size etc etc). However today’s market isn’t favouring the luxury home market in Brighton and a bumper result wasn’t therefore expected. In front of a small crowd of around 30 people the auctioneers pre-amble didn’t trigger any bids. He was forced to open the auction with what he termed as a ‘modest’ vendor bid of $3,3Mil and after a short break inside, and another attempt to rally the crowd, he made a second vendor bid of $3.350Mil before passing the home in with an undisclosed reserve.
Catherine Cashmore
