Economy

Property: It’s patchy at the top

SmartCompany /

The latest round of weekend auctions – the last before the spring break brought on by football finals and school holidays – produced a mixed bag in Melbourne and Sydney. What stood out most was lack of quality and lack of choice.

Melbourne’s top price was $11 million for 12 Lansell Road, Toorak, a classified home on 32,000 square feet. The price might sound incredibly cheap, but it’s fish-bowl living created by large blocks of flats on each side and even the house ain’t that flash. Not Toorak with a triple-A.

The price of land continued its upward spiral, with a B-grade block at 5 Moonga Road, Toorak, selling for $2,640,000, which equates to $425 per foot. It’s an “out there” result because it has a large, two-storey property on its northern boundary (any home here runs the risk of becoming a cave) and you could have bought land in Moonga Road a year ago for $300 a foot.

In Malvern, 12 Henderson Avenue passed in without a bid. The vendors are looking for $4 million; given the position you would have thought there would have been a frenzy, but the house just doesn’t work. It’s a rabbit warren and buyers at this level are not rabbits.

Elsewhere there were no real surprises: 22 Airlie Street, South Yarra on 5000 square feet sold for $3,010,000 against a $2.5 million expectation.

A house at 2 Yarradale Road, Toorak, sold for $3,340,000, about right for C-grade Toorak.

One exception was 9 Currajong Avenue, Camberwell, which sold for $2,665,000 against a $2.2 million expectation. This for a weatherboard! The lesson? People are looking at “fringe” areas such as Camberwell, Hawthorn and Canterbury as an alternative and prices are responding.

Once again there were examples of an emerging trend of buyers going up against investors. It’s no longer unusual to see six or eight bidders competing for inner-city apartments, something agents could only have dreamed of six months ago. Now it’s common to see dad bidding for the kids (spend the kids’ inheritance early, on the kids: saves on the funeral).

Looking for an agent over the next couple of weeks? Look in Noosa, or Europe. With the grand final and school holidays upon us, this is the year’s second-biggest shutdown. Only Christmas–New Year is quieter.

Meanwhile, in Sydney, clearance rates are about 65% and sellers are resisting the springtime impulse to sell. The shortage of quality stock has meant disappointed buyers and solid prices, especially closer to the city.

In the eastern suburbs, Woollahra, Vaucluse and Point Piper continue their bullish run driven on by the end of the APEC conference, foreign money, investment bankers and the return of some investors.

The three-bedroom, Rothwell-designed 3/10 Wentworth Street, Point Piper, with views of the harbour, bridge and Opera House sold at auction for $8.2 million – more than $27,500 per square metre. If that is a true indication of the market, it might explain why the eight apartments of the Bezzina-designed Sienna, at nearby 38 Wolseley Road, Point Piper, appear to be selling slowly with asking prices starting at more than $48,000 per square meter.

Around the corner at 4 Lindsay Avenue, Darling Point, the owner accepted $18.5 million for a five-bedroom home on 900 square metres of land overlooking McKell Park.

Head inland a little and Woollahra and Paddington remain hot spots despite a hint of pre-election nerves, which led to some sales prior to auction. A bullish pre-auction offer of $3.125 million was accepted for a master-built three bedroom town home with no ensuite on 190 square meters at 37 Jersey Road, Woollahra, representing an increase on the $2.8 million paid a few weeks earlier for the unrenovated 51 Jersey Road, Woollahra, a few doors away. These sales again show the popularity of fully finished properties close to amenities.

Vaucluse remains tightly held, especially in the prime pockets around Parsley Bay. In yet another recent sale before auction, $4 million bought the “built to the front boundary” town home at 22A Fitzwilliam Road, Vaucluse.

Over the Bridge, Cammeray continues its upward spiral, with $1.27 million being accepted off-market for a well maintained three-bedroom weatherboard cottage in need of upgrading on a large level block with an English country garden at 111 Bellevue Street, Cammeray.

Further up the line, tightly held pockets continue to generate a lot of competition with $2.69 million being paid for a five bedroom house at 41 Tindale Road, Artarmon, and $2.52 million for a five bedroom house in the triple-A rated Roseville Avenue, Roseville, at number 25.

There were some interesting sales in the west, with a hefty $4.1 million picking up a five bedroom mansion at 9 Woolwich Road, Hunters Hill, proving again that this suburb continues to benefit form reduced aircraft noise.

Further west, $2.115 million secured a four-bedroom house at 69 Newton Road, Strathfield.

David Morrell is a principal of Morrell & Koren, buyers’ advocates. This story first appeared in Eureka Report.

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