The clearance rate last weekend came in at 53%, yet still we’re seeing record numbers of vendors opt to market their properties for auction rather than private sale – Why? Well as a method of sale, the auction system is still regarded as the best way to attract attention throughout the marketing campaign.
Selling via private treaty in a downgraded market can back fire if buyers ‘perceive’ they have ‘plenty of time’ to make an offer. An auction effectively puts a ‘used by’ date on the property and creates enough activity with the advertising campaign and a conservative quote range, to get plenty buyers through the house.
If the property doesn’t sell under the hammer it’s no big deal because the attention created during the 3 weeks prior has been enough to ensure a successful sale usually 1 or 2 weeks afterwards.
As many sales agents will tell you, a passed in result can sometimes give interested buyers the ‘impression’ they’ll pick up a great deal. The vendor obviously didn’t get their ‘wish price’, and most buyers prefer negotiating behind closed doors during which it’s easy to ‘perceive’ they’re negotiating a bargain, rather than battling against the competition on a Saturday afternoon when it’s ‘deepest pockets wins’.
Therefore we shouldn’t get too caught up on the ‘clearance’ rate each week, but keep an eye on the overall weekly turnover to give a better indication of current trends. If we compare the number of properties sold thus far this year, with the number sold for the same number of weeks in 2010, we are only down 7% – and compared with 2009 we’re up 6%. We witnessed 10 auctions this weekend – 6 of which sold, 3 passed in, and 1 passed in and sold via negotiation. All had genuine bids – however with enough press screaming out the words ‘buyer’s market’ we’re not seeing many achieve ‘bullish’ results. Most are selling for comparative market value, with the odd top of the range result for listings which stand out as the rose amongst the thorns.
SOLD under the hammer
37 Windermere Cresc, Brighton – a dated 3 bedroom house on 537 sqm of land walking distance to both the beach and train station. This isn’t a home that’s going to fly under the radar. It’s an entry level opportunity for a young family to get into a sought after pocket of Melbourne. Quoted at $1.25M-$1.375M a crowd of around 60 turned up. As tradition dictates, the auction opened on a vendor bid of 1,250Mil, however with 3 bidders there was enough ‘sport’ to make an entertaining event. Six bids later at 1,330Mil the house announced ‘on market’, and 15 bids later – some $90K past reserve, it sold for 1,420Mil. Good properties are scarce; they get good results in all markets!
37 Denton St, Brighton East – a 2 bedroom + study fairly dated unit – one of two on the block. This particular pocket of Brighton East isn’t the one that traditionally ‘flys’. The location can neither be described as close to the bay nor close to the train station, however for a buyer looking to get a foot through the door it provides a window of opportunity. Quoted at 600K – 670K the auction opened with a genuine bid of 500K, however this was quickly eclipsed by the agent with a vendor bid of 600K. From there on 2 bidders competed. Rising in $10K dollar lots, the unit was announced on the market at 660K and sold soon after for $665K – a fair result in this market.
17 Haines St, Hawthorn was another home not likely to go unnoticed. A double fronted two story renovated house on 551 sqm in this location isn’t all that common. As such there was a good crowd and 2 bidders attending. Bucking the trend the auction opened on a genuine bid of 1.6Mil. Being a fair way from reserve, the agent put in a vendor bid of 1. 65Mil. Three bidders was enough to keep the price climbing until it hit reserve around 1.8Mil. A few bids later, it sold, for 1.88Mil.
11 Darlington Place, Richmond is another stand out beauty. Perched on Richmond Hill, this double fronted Victorian was quoted at 1.1-1.2Mil. Opening on a genuine bid of 1Mil 4 bidders took up the race. At 1,350Mil the action slowed a little and so it was announced ‘on the market’; it sold a few small jumps later for 1.380Mil.
175 Roseneath St in Clifton Hill turned out to be an interesting auction. A freestanding warehouse development is a style that always attracts competition. The auction opened at 1.3Mil, and with 5 bidders competition was rife. However it was at 1.5Mil – not quite on the market – when the auction stalled. The auctioneer then managed to encourage the highest bidder to raise his own bid by 50K to get it on the market rather than letting it pass in! It’s not often you see a buyer bidding against himself, however it had the desired effect because once announced on the market at 1.55 Mil it inspired a few more bids before selling for 1.790Mil.
A big family home at 145 Woodland St, Essendon attracted a good crowd, but only 2 bidders. Opening on a genuine bid of 800K, it rose in steady 10K until it reached its reserve at 880K. Slowing down to 5K and then 2K increments, the house finally sold 37K above reserve for 917K.
21 Swinton Rd Kew, is a well located 698 sqm block of land bordering the Yarra and offering potential for a developer to take advantage of a stunning city views. Opening with a vendor bid of 1.5Mil, the agent called for 50K bids. Two bidders raised their hand, however the bidder seen first by the agent was only willing to offer 10K (1.51Mil) thus forcing the agent to place a second vendor bid of 1.55Mil. There was another bid 10K – but with no further competition the house passed in at 1.56Mil. Reserve has been published at $1.7Mil
94 Mill St, Albert Park – a renovated freestanding period home usually attracts a higher level of competition. The crowd was large in number, but only 2 bidders were brave enough to compete. Opening on a vendor bid of 2.3Mil, the number pushed to 2.42Mil before passing in. Ongoing negotiation may see a successful result next week.
54 Dorothy Ave, Belmont. The agent didn’t manage to inspire anyone to open the auction despite his best efforts with his pre-auction spiel. He opened on a vendor bid of 250K – however it was clear no one was willing to raise a hand. With a land size just under 600sqm, and located a fair distance from the train station, the property passed in on a vendor bid of 250K
PASSED IN and sold via negotiation
Finally 13 Monash St, Ascot Vale proved to be another disappointing auction for the vendor. Opening on a genuine bid of 750K, the price struggled between two bidders to get to 790K, before the auctioneer felt compelled to place a vendor bid of 810K. One more 10K punt was squeezed out the buyer before the home passed in at 820K. However with after a fairly lengthy negotiation, the home finally sold for 875K