Gauging the heat in the last four auction weekends…

This weekend marks the start of the final leg for 2016 Melbourne auctions. With only four possible auction Saturdays left, we can anticipate that new auction listings for December will  make their last foray onto our alerts searches in the coming week. By this time next week, we will have every auction listing on our screens, and only the limited private sales, auctions for early 2017 and passed-in sale properties will be listed.

What this means for buyers is basically that the options remaining are what we see.

There will be only limited extras yet to come onto the market showing up online.

There are stronger numbers of properties for sale now than six weeks ago, but in this vibrant auction-season in Melbourne, our market is still difficult for buyers because our supply is down on this time last year (and this peak spring time of other years prior).

Not surprisingly, we are constantly seeing strong auction results (including sales prior to auction) and buyers are missing out on properties which they had prepared to really stretch their bidding limits for. Agents are texting results through to us with genuine surprise for some properties, and buyer frenzy – and frustration – is evident in many suburbs. But not every single suburb or dwelling type is exhibiting consistently strong outperformance.

The results are mixed, and the reasons are varied.

Apartments are not tracking at a pace anywhere near houses are. Inner-ring suburbs are soaring in the inner-north and inner-west. Townhouses with convenient floorplans for downsizers are highly contested. Houses with car spaces are fought over between buyers who care about bringing their imported cars in off the street. And easy amenity to the city is appealing to older, more cashed up buyers.

There are many elements which can adversely impact the chances of success for a buyer with the ‘right’ money, and understanding competition levels by asking the right questions can make the difference between having a genuine chance at auction, and wasting your time.

Yesterday was a perfect example of the need to gauge buyer competition for us.

Our first auction was in Abbotsford for this beautifully renovated, light-filled Victorian brick terrace just moments away from North Richmond Station and surrounded by beautiful homes and nearby cafes. After carefully quizzing the agents about other interested parties and conducting a rigorous comparable sales analysis, we felt that value likely sat in the $1.25-.1.3M vicinity. Our buyer needed to exhaust every last dollar of her budget to be in with a firm chance. Sadly a late bidder trumped us and the property sold just $15,000 over her limit, but who is to know what a cashed up baby-boomer would have been prepared to pay?

A 10am auction in Yarravillle at 15 O’Farrell Street was one which we’d previously shortlisted and pencilled into the diary for clients of ours. But considering their $1.2M budget and weighing up the things that Yarraville family buyers want took us no time at all to decide that this property was not likely to sit in their desired budget so we opted out of the race one week before the auction. Despite being a renovation project for the next buyer and boasting a mere 306sqm, this cute 4 BR house had three things which of late, cashed up buyers have really been fighting for.

Option to bring a car off-street, four bedrooms, and a period facade.

Under tough competition and with a really well-executed campaign, this home sold for $1.401M yesterday.

Our last auction of the day was at 2pm in Ascot Vale, in arguably one of the most favoured streets. This beautiful freestanding period Victorian weatherboard was targeted for our investor’s brief primarily for it’s strong capital growth potential, but also it’s potential for improvement, while still having adequate rental appeal. Strangely though, competition was not as tough as we may have envisaged. Another advocate had considered it and then opted out the day prior. Buyer interest had been splayed somewhat by other properties which emerged onto the market during the campaign. This is always a risk for vendors who sell in spring, and this campaign started strongly with the property being the only one of it’s genre available in the postcode.

Tackling just one other party, we bid strong and firm and had the property pass in to us on our million dollar bid. We negotiated the reserve of $1.02M down to $1.01M with a shorter settlement to entice the vendors and contracts were signed at 2.40pm.

What we gleaned about this campaign, and canvassing other similar properties for sale at the same time gave us the confidence to bid with what could have otherwise been an insufficient budget on such a home.

Recognising the buying conditions, competing properties, and crowd-drivers has everything to do with formulating a limit.

Photographs sourced from REA