It’s very hard to go a week without numerous reports hitting the headlines suggesting a possible market crash. Despite facts being stressed concerning our population surge and shortage of ‘useable’ housing, a minority find a public voice to beat the drum of impending disaster. No market or investment is risk free, which is why it’s important to protect and minimise risk through a carefully strategized plan prior to making any financial decisions. Weekly we witness buyers bidding at auctions with the heart rather than the head, often paying above market value to secure the house of their dreams. However the market we’re experiencing at present is a perfect ‘negotiators’ market’, and with a little patience and the right advice, its possibly the best market to step into before we start to see prices creep upwards once again as stock diminishes as it always does during the winter months.
In a balanced market, it’s important for vendors to keep expectations at a conservative level if they’re to be assured of a successful result. Agents are reporting good stock for the next month, however as it diminishes we’re likely to see competition push property prices higher (all be it at moderate levels), as our inner and middle ring suburbs suffer once again from low supply and continuing high demand.
However anyone thinking the market is about to crash would have done well to accompany us on the auctions this weekend. We attended 5 auctions – all had huge crowds, multiple bidders, and achieved above average prices which proves we’re a long way from the doom and gloom scenarios often spruiked by the bubble ‘naysayers’. Considering there has been a lot of stock on the market of late, it’s no surprise to see a plethora of second home buyer’s either upsizing or downsizing, as many sell before they purchase, and this is the main force behind
However although some of today’s results proved positive for a number of vendors, there is still plenty of stock on the market for buyers to take their pick – and with good negotiation skills – healthy opportunities are there to take advantage of.
3 Central park Rd, Malvern East – Is a beautiful 5 bedroom Edwardian house on a corner block of 925 sqm. However with a heritage overlay it was only ever likely to attract interest from home buyers rather than developers. A crowd of at least 150 people attended this auction. Quoted at 2.5 – 2.7 Mil and with such seemingly healthy interest, the auctioneer didn’t waste any time in asking for an opening bid right at the top of the range. He many have unwittingly priced out a few bidders who were hoping to start at a more conservative figure, and when no one offered to step forward, he placed a vendor bid of 2.7 Mil and invited jumps of 20K increments.
A good 7 mins later and almost looking as if it would pass in with no interest, two bidders stepped up to take the challenge. The price made its way to 2.82Mil before the action ceased. The pause to go inside and talk to the vendor’s failed to see it placed on the market despite the price being a good 100K above the quoted ‘interest’ level. The agent – giving the well-used excuse of what a hard decision it is for the owners to make a choice after 33 yrs of residing in the home, and assuring the crowd it wasn’t far from being placed ‘on market’ – enthusiasm diminished. The property passed in, only to be sold later via negotiation for 2.86 Mil. (Price undisclosed)
Just round the corner – 28 Wheatland Rd is a property that couldn’t quite match the prestige of Central Park Rd, but attracted an equally large attendance. This 3 bedrooms, 1 bathroom, un-renovated Edwardian, on 601 sqm of land, had a quote range of 1.4 – 1.5Mil. The opening bidder, who had taken time prior to the auction to question the auctioneer openly during his pre-amble on the risks of purchasing a property in case it was vandalised prior to settlement (!) – tried his luck at opening the event well below the quoted range at 1.1Mil. He was quickly outbid by the agent with a vendor bid of 1.35Mil, and from there on 3 bidders took the challenge pushing the price upwards until it was placed on the market – without pause to consult the vendor – at 1.45Mil The pace didn’t slow, and the house sold under the hammer for 1.490 Mil. (For once within the quoted range!)
29 Carlton St in McKinnon quoted at 1.020 to 1.120 Mil – is a beautifully renovated Californian Bungalow, on 460 sqm of land with 5 bedrooms, and therefore was always going to attract a large crowd of home buyers. Situated in the heartland of the McKinnon School zone – a very tightly held neighbourhood with little stock – the crowd easily bordered on 200. There were four buyer advocates in attendance, none of which were successful for very good reason. Opening on a genuine bid of 1.1Mil, this auction literally ‘flew’. In no time at all the property was placed on the market at 1.25Mil however that wasn’t the end. How any valuer will price this one is beyond me. Three buyer advocates didn’t even bother placing a bid as two buyers took the bit between their teeth to push the result way passed market value to a whopping result of 1.417 Mil. The highest price achieved so far this year in McKinnon.