<html><body>
We might like to think that life is certain, but it is not. Neither is the market. History shows us that the market is on the precipice of uncertainty pretty much all the time. That’s because the market is actually a composite of people’s opinions. And opinions can change on a five-cent piece.
Buyers and sellers act out of need, out of want and out of instinct. Their many actions culminate in exchanges of ownership. These exchanges are what society focuses on and records in an attempt to give a sense of certainty to the market.
The opinion-recording mechanism that society uses to try to create an element of certainty is price. Price is a very imperfect unit of measurement when it comes to describing the emotional certainty of a transaction. But it’s the most practical and the only uniformly acceptable measurement we have.
In Melbourne in 2012 there is currently a malaise of uncertainty on price that is besetting many an inexperienced buyer and seller out there. This uncertainty is creating a wide range of emotions for many buyers, even if they don’t realise it.
How do you as a buyer live, deal and feel comfortable with your emotions in a world that is currently headlining uncertainty over certainty right now? How do you as a buyer function within the Melbourne property market without going a little crazy when you use price as a measurement to give you certainty?
To get some comfort when you are uncertain there are two magic pills. They are very different, and either can work for surviving this current market.
One magic pill is ignorance. The other is being properly informed.
Ignorance can work well when buying homes in a booming market like that of the early 2000s. But in the current uncertain market, using ignorance is a bit of a crapshoot. While sometimes it can work, we’ve also seen it hurt a lot more people than it has helped – particularly in the outer areas, in overpriced apartments and in poorly located, poorly laid-out or over-priced inner-Melbourne family homes.
The other magic pill for managing your emotions in the property market is information. Being properly informed can allow you to traverse the current market of uncertainty in a manner involving less pain, both now and in the future.
So back to price, which is where all the pain is right now – how do we lessen the pain of price uncertainty? How do you get comfort in your price selections right now?
Simple: you have to understand what price is and how it works.
In our current market you can only look at price with certainty if you look at it as a mechanism that allows a transaction and almost nothing else.
You need to understand that price characteristics change in a falling market. And those changes bring in a whole new genre of commentary called risk analysis. Risk analysis is about examining your chances of achieving your goals. Risk management is about minimising the possibility of missing out on what you want.
At the moment, if you are feeling uncomfortable about price it is probably because you are uncomfortable with what price actually is and does, and with the associated risks.
But how can you get comfortable with price in this market? Understand what it is and what it isn’t.
 
<hr class="system-pagebreak">
 
Is there such a thing as the right price in 2012?
Here is a practical example: A client comes to us and asks, “Is this a good price for this home?” We respond, “On any specific number we honestly don’t know. We can show you how to try and achieve this price or that price within a range, but whether it is a good price is hard to say right now.”
Let’s say that one weekend there are two bidders on a home. The vendor is feeling bullish. Bidder One is prepared to pay $2.1 million and Bidder Two is prepared to pay $2.05 million . The vendor passes the property in at $2.05 million and says he wants $2.15 million. In the end he gets $2.1 million from Bidder One, who is nervous about Bidder Two.
But the situation could have turned out completely differently if on that weekend Bidder Two had already bought a home and so the property was passed into the sole Bidder One, at $1.8 million. Say the vendor had also been told during the week by his spouse that he must buy another home they had seen two days earlier or she’d file for divorce. Our vendor is now a “motivated’ vendor and has moved from bullish to nervous – so he takes the $1.81 million offered post auction from Bidder One who, seeing no other bidders, is prepared to stick to her guns on that lower price.
Which of these prices was a good price? Well, one price was lower than the other, but that was as a result of a convergence of circumstances and opinions. The lower price in the second situation was simply because Bidder Two was no longer in the game, and the vendor was very motivated to sell. But for Bidder One in the first situation, the higher price was also a good price – because she managed to beat off Bidder Two and come to a deal with a vendor who had high expectations.
Is $2.1 million a bad price – is $1.81 million a good price? Well, we don’t know all the circumstances. Was the home the right home for both parties? What if the $1.8 million buyer has to sell in six months because it’s not right for her and prices had dropped by 15%? What if the $2.1 million buyer is very happy bringing up her family in the house and the street and holds on to it for the next 20 years? Which price then was the right price?
The nature of a weak market like the one we’re in now is that we’re relying on a smaller pool of opinions. There may be two bidders, or just one. There’s no certainty. There are just large variances – that is why a $300,000 variance is a very real possibility.
(In a strong market you’re less likely to see these sorts of variances at a public auction, because with three or more bidders, even if one drops out there is still competition to support the price.)
The point is that at the moment prices can vary big time, and for those looking for comfort we recommend you look to your decision-making processes rather than just price.
The good decisions you can make, as a buyer, are to decide whether the house is the one you want, whether you’re prepared to pay what it takes to buy it, what your alternatives are if you don’t buy, what are reasonable price ranges (even if they are wide), what are your strategies to get the lowest price and what are the risks involved in your actions.
If you are to act, then this process will give you some comfort in the uncertainty of price in this market.
Mal James is principal of<a title="James Buyer Advocates" href="https://www.jamesbuyeradvocates.com.au/" target="_blank"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.</body></html>

maljames-vHwm28JUAa

How to have confidence in your property buying decisions, even though the market is always on the precipice of uncertainty

<html><body>
Right now, values, pricing and results should be a little inconclusive to all. Anyone telling you she knows for sure what the market is going to do up until Christmas is a lot smarter than we are, Gunga Din.
The current mid-winter 2012 market is best characterised as being historically low in terms of exciting new stock. Another key characteristic is that it is a significantly falling market in terms of expectations for B- and C-graders (or properties that have some faults in terms of floorplan, presentation and location), and a gently falling market in terms of expectations for A-graders (or well-presented properties with sensible layouts in prime positions, the most sought-after class of the property market). See our graphical representation below:
<a href="https://marketnews.com.au/2012/08/price-catching-a-falling-star/the-worm-2012-2/" rel="attachment wp-att-26953"><img class="aligncenter size-large wp-image-26953" src="https://marketnews.com.au/wp-content/uploads/The-Worm-20121-597x326.jpg" title="The Worm 2012" width="470" height="257"></a>
In some of our pricing recommendations, we are using 2007 to 2009 comparables to support where we feel market sentiment may be for any particular home right now.
In 2008 everything was negative. In 2012, there are buyers out there, but we haven’t been seeing them because they are not interested in the poor-quality stock currently being offered in the $1 million to $2.5 million range. This winter the transacting market above the $2.5 million price point is so small that commentary, in our opinion, is supported by best guesses rather than factual evidence. Bidders in big numbers are generally only acting when a good home appears, and then they are aggressive on price in two ways:
<ul>
<li>
Up – if there is proven competition and there is a reasonable reserve (although competition is not as strong as it was in 2007 or 2010).</li>
<li>
Down – if there is no proven competition or if the reserve is courageous.</li>
</ul>
There are five key property buyer questions:
<ol><ol>
<li>
How long will this lack of quality stock continue? Buyers are wondering whether they should buy now and take second best, because they really don’t want to be looking for another year. Another sub-thought is: if stock is going to be so weak for a long time, we might as well buy a B- or C-grader now rather than wait another year and then still only have B- or C-graders to choose from.</li>
</ol></ol>
 
<ol><ol>
<li>Falling prices mean – How do I, as a buyer, catch a falling star (price)? How do buyers get an A-grader against some competition while minimising the burn marks on their hands if prices continue their re-entry from the once seemingly unstoppable surge into the stratosphere that was  inner Melbourne early 2010?</li>
</ol></ol>
 
<ol><ol>
<li>
How do I assess risk to me and my family going forward? The first decade of this millennium was all about playing market offence and looking for homes that would grow most strongly in value. Remember the words capital growth? This second decade looks to be all about playing market defence. As in, how do buyers look to best protect their family interests in a flat or falling market?</li>
</ol></ol>
 
<ol><ol>
<li>
How do I deal with bank and sworn valuations that are historic pieces of information? In many cases these values are no longer reflective of the sudden and significant change in the market. How do I deal with an official valuation in a future that may well be different from my purchase price now?</li>
</ol></ol>
 
<ol>
<li>
How do I buy a home when I am the lone ranger (the only bidder) on the property? How do I hang my hat on a value when all I can see is an agent quote that seems lacking in substance and supporting current data? How do I take comfort and keep my sanity when I can’t get surety and vindication through seeing competitive transparent auctions?</li>
</ol>
This fifth question is really a compilation of the above four. If you are informed, you can get it right and you can make good decisions and you can sleep OK going forward.
Mal Jamesis principal of<a href="https://www.jamesbuyeradvocates.com.au/" target="_blank" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
</body></html>

The five key questions spring property buyers must ask: Mal James 

<html><body>
<a href="https://www.propertyobserver.com.au/residential/how-to-avoid-the-winter-home-buying-blues-the-case-for-and-against-buying-now/2012070455426">At the time of my last blog post</a>, the fridge door had opened on the market and the mood was a little sombre.
July hasn’t really given us any more pointers as to where things are going, given that – as you would expect – there has been such a small number of transactions.
In our opinion, right now the overall million dollar-plus market is about as exciting in terms of stock quality as an Opp Shop – lots of junk and the occasional gem.
For example, at 97 Page Street, Albert Park, 80 people showed up to the auction by Greg Hocking. It was bought under the hammer for $990,000 with three bidders.
Meanwhile, just down the road in Elwood there were two auctions – at 15 Kingsley Street and 38 Byrne Avenue. Our reporters turned up at both these auctions, but no one else did except for the auctioneer. Consequently, there were no bids and no action.
We consider $80-100 million-plus auctions a good solid weekend in Bayside and the inner east.
Last weekend we could only find around 30.
Only a handful tipped the excitement scale above lukewarm and a few didn’t even make the $1 million mark.
This weekend the numbers are not much better, with just under 40 auctions.
However, the following week, August 11, we are getting back to normal, in this lower stock year, with around 70 auctions scheduled in the million dollar-plus price segment.
So we are keeping our overall market opinions to ourselves – other than to say she is pretty quiet and unexciting by any measure, but that this is not completely unexpected.
Things have also been quiet at the $3 million-plus price level in all areas during the month of July. This is fairly understandable given that:
<ol>
<li>Many agents who sell at this price level are in Europe or elsewhere during July.</li>
<li>Given the winter school holidays, this time is historically as quiet as January in terms of $3 million-plus family home action – meaning almost nil.</li>
</ol>
With the Olympics as a market-perceived interrupter, it doesn’t look like things are going to hot up in a hurry much before the start of the AFL footy finals, when traditionally spring brings those first buds of $3 million-plus homes out onto the market.
Having said that, there was some limited action in July and here are three interesting homes that show the price vagaries of the market with regards to the current 2007 to 2012 cycle.
<ul>
<li>
Brighton, 16 Albert Street, with Andrew Urquhart of JP Dixon – sold for around the mid-$3 million. This was a new home, a couple of hundred of metres from the beach on almost a 1,000 square metres of land. The 2012 price represents a decrease on the early 2008 sale (start of GFC) of around 6%.</li>
</ul>
<ul>
<li>
Balwyn North, 1 Cascade Street, with Andrew Keleher of Jellis Craig – bought for around $3 million. This had an older style front with ultra modern extension on 800-plus square metres. It’s been on the market for a few months with this agent. It was a strongish price for the area, despite the fact other agents had been asking in the mid-$3 millions for it recently. The 2012 price represents a 10% increase on the late 2007 sale price, which shows there is still some life left under the right circumstances.</li>
</ul>
<ul>
<li>
Canterbury, 34 Maling Road, with Tom Ryan of Jellis Craig – on a big block of land and tennis court (3,000-plus square metres), this period home had potential but was in need of renovation (James Home Rating 626/1000). It sold for, we believe, around $4 million. If this was the case then it was almost exactly the same price as two years ago when it last went to market.</li>
</ul>
</body></html>

The state of the $3 million-plus property market: Mal James

<html><body>
Let’s start off with the winter 2012 $1 million question:
Is it a good time to buy or is it a good time to wait?
The argument for waiting and renting
We all need roofs over our heads.
What is the difference between paying rent to a landlord and rent to the bank (that’s what a mortgage is – you are renting money from the bank with the interest you pay)?
On a $2 million home that you resell in two years for the same price (if you sold it because it was a bad decision) you may have spent say $300,000 – stamp duty ($110,000), reselling fees ($60,000) and mortgage payments ($130,000). Now if that home went down in value and you had to sell it, it’s quite possible you could end up with a half million-dollar loss on top of that. If, however, during that same time you rented a $2 million home, your total outlay would be somewhere between $80,000 and $120,000 for rent.
Renting in that scenario on a $2 million home could be a $200,000 to $400,000 better decision.
Suggested guidelines if you are to rent.
Are you new to the area? Rent a home in the area you are planning to buy in, as this should help you understand the subtle nuances of precincts.
Rent a good home. If you rent a crap home just because it’s cheap, it may be counterproductive, as all you will want to do is rush to leave. That puts pressure on you buying a home, which can often be negative as you are forced to make a hurried decision.
Rent for 12 months. In this market it may well take you some time to find the dream home.
Important rider: We are making a case for short-term renting as a way of giving you time to find and buy the right long-term home. But long-term renting is rarely the answer to long-term emotional and financial happiness in Melbourne. We have met very few rich and long-term happy renters.
The argument for buying now and trading up
Most selling agents have begun to trot out the line that now is a good time to buy if you are trading up. We have to agree.
In this market, the gap between lower-priced and higher-priced homes is getting smaller.  Therefore if you can find a good home now (and it is still possible), then trading up is certainly better now than it was during the stronger market of, say, early 2010.
Say in early 2010 when we had a strong market and lots of stock, your $ 1.5 million home had one bidder and you sold it for $1.5 million. And then you went and bought a $3 million home that had three bidders and you bought it for $3.2 million. At that time the mortgage gap was $1.7 million.
In 2012 your $1.5 million home may have had two bidders and sold for $1,420,000 – prices have dropped a bit but because stock is short on good family homes at your level and you priced it correctly, you had bidders. You had already bought a ripper $3 million home off market that was negotiated over a three-month period for $2,720,000. In this case the mortgage gap was $1.3 million.
Similar houses, different times. You’ve also paid $20,000 less in stamp duty and your mortgage  is cheaper to maintain. $1,700,000@ 8% = $136,000 as opposed to $1,300,000 @ 7% = $95,000. Yes, the figures are approximates, but you get the drift.
Of course it needs to be the right long-term home –<a href="https://www.propertyobserver.com.au/https://www.propertyobserver.com.au/residential/how-to-avoid-the-winter-home-hunting-blues-step-two-%E2%80%93make-good-decision/2012062755313" target="_blank"> a good decision</a>. Buying now because rates and prices are cheaper only makes sense if it’s a good decision for your long-term emotional and financial happiness. But <a href="https://www.propertyobserver.com.au/https://www.propertyobserver.com.au/residential/how-to-avoid-the-winter-home-hunting-blues-step-one-%E2%80%93-stay-patient-mal-james/2012062655275" target="_blank">be patient.</a>
Mal James is principal of<a href="https://www.jamesbuyeradvocates.com.au/" target="_blank" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
</body></html>

How to avoid the winter home buying blues: The case for and against buying now

<html><body>
<a href="https://www.propertyobserver.com.au/residential/how-to-avoid-the-winter-home-hunting-blues-part-one-%E2%80%93-stay-patient-mal-james/2012062655275" target="_blank">Yesterday I talked about the importance of staying patient in the cooler winter market. </a>The consequences of a bad decision are much worse now, and time is needed to make the best possible decision.
In the late 1990s and early 2000s the consequences of decisions were not quite so obvious due to runaway capital growth pretty much right across the board. Even a bad decision was a good decision because almost anyone who bought was better off than those who didn’t.
Over the past seven years or so (traditionally one property cycle), since around 2006-07 the game has changed. When it comes to home buying, there is now a significant gap between those who have made good decisions and those who have not.
Good decisions: We can give you specific examples of clients who have bought since 2007 and who since that time have seen 50% increases in buying and selling. One home that was bought for $1 million in 2007, for instance, sold for $1.5 million in 2012. Not that we have encouraged such quick turnaround – but sometimes circumstances change.
Poor decisions: We can also point to sales that have resulted in up to 20% losses since 2007. We have seen some substantial losses in the Golden Mile Brighton, as well as a period home in Elsternwick with a big auction and even homes in Boroondara. If you bought a $2 million home in 2007 and sold it for $1.7 million five years later, that is a substantial loss.
Highlighting the good decision vs. bad decision numbers.
Back in 2007, the $1 million buyer and the $2 million buyer were $1 million apart. Now in 2012 they are only $200,000 apart. Meanwhile, the buyer who made the good decision has had to pay only half the mortgage repayments of the poor decision buyer. Sure, this is an extreme case, but it has happened.
The winter of 2012 is a time to keep making good home buying decisions.
Mal James is principal of<a title="James Buyer Advocates" href="https://www.jamesbuyeradvocates.com.au/" target="_blank"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website. 
</body></html>

How to avoid the winter home hunting blues: Step two – make good decisions

<html><body>
If you don’t have a lot to look at this weekend, go and choose a really good coffee house (such as Porgie and Mr Jones in Auburn Road, Hawthorn East or Coin Laundry Armadale Street, Armadale or The Little Ox in New Street, Brighton). Do this without the kids, sit down and have a chat and a think.
If you are feeling frustrated, annoyed, scared – well, perhaps “chill” for a moment, as they say.
Buying a home should be a 20-year decision. Even if you have been looking for a year, you are probably less than 5% into that time frame. Unless you’re aged 90 and hoping to get the first-home buyers’ bonus, you have got time.
Right now the market is on the side of those who are considered and patient.
If your frustration is escalating, consider a change of habits. Very few properties are selling on the first day they hit the internet. (Although it’s true that a few are being bought off market or before auction, and for that you need a plan.) But looking at the internet four times a day like a teenager constantly checking her Facebook page will not help your mental state. And your mental state is so important in home hunting.
Try not to be afraid that you’ll never find something. Unless you are a Martian with unique requirements, you will find a home. Right now stock is short for lots of people, but things will improve. Don’t buy crap out of a sense of frustration.
If you are in the wrong head space you can end up making poor decisions – and those poor decisions can affect your whole life.
Review your results
So you’ve been looking all this year. How did you go? Have you bid on anything, were you close or have you not found anything of interest?
Back in 2010, if you hadn’t found anything after looking for six to 12 months, our advice would have been to look at your requirements and see how realistic you were – because in 2010 there was a lot on offer. However this is 2012 and the levels of correctly priced, exciting stock have been considerably lower. So your goals may be reasonable, it’s just there’s little stock choice. Our best advice is try not to make a kneejerk reaction to shift to a different set of goals without considerable thought.
Consider changes
In 2012 we suggest you take a more general overview. That’s code for “don’t be too hard on yourself”. Even if you haven’t found your dream home, think about whether you have seen homes within your price range, type and area that are similar to what you want? If your answer is yes, our advice is don’t change course – be patient. If your answer is no, then it may be time to consider a different suburb, a different type of home or more money. Dare I say it– it may be time to seek professional advice to ascertain your best options.
Reinvigorate your plan
Take the next couple of months to review. When the school holidays have become just a painful memory and we are heading into the footy finals and starting to see the first flush of early spring home releases, that will be the right time to smarten up you act. Spend some time now on getting clear on what you can do, getting motivated on what you want and resting so you are set to go when the stock options improve.
Mal James is principal of<a target="_blank" href="https://www.jamesbuyeradvocates.com.au/" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.</body></html>

How to avoid the winter home hunting blues: Step one – stay patient: Mal James

<html><body>
So what do you do if you’ve found a home, it’s for private sale, and you want to make an offer? How you kick the ball into play, to use the vernacular, can be even more important than the actual amount – especially at the highest level. Too often buyers’ first efforts are way out of bounds and the game is over on the first move.
Slamming a deadline on a low-ball price, for instance, not only has limited chance of acceptance, but can also offend – making a future, more realistic offer harder to get over the line. On the other hand a careless high-ball comment can make it almost impossible to offer sensibly afterwards.
Before you step over the negotiation white line please understand that the first thing you say and how you say it often becomes the foundation around which negotiations are built.
If those foundations are faulty, your dreams may come crashing down on a home you could have bought had you done your homework, executed a plan well and shown some respect.
I know it can be hard to accept, but sellers and their agents have feelings, too.
Mal James is principal of<a href="https://www.jamesbuyeradvocates.com.au/" target="_blank" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
</body></html>

Be cautious when making your first offer on a property, or negotiations could end before they begin

<html><body>
From the results over the past few weeks, it would be easy to conclude that the market is all over the place – up one week, down the next.  But it's not as inconsistent as it may appear. It's just very picky at the moment when it comes to stock and price.
Before Easter we had a good supply of stock and we had vendors prepared to sell at market price. The result was solid clearance rates. After Easter things got quiet again. Then last weekend we saw some solid results across the board on quality market priced stock. And then this weekend we were back to slightly weaker clearance rates. Why?
The constant stream of economic news isn't helping, but we feel that the inconsistency really is down to stock quality and seller pricing – which seems to be changing on a weekly basis right now.
In fact, there could have been some more healthy results this weekend, if more vendors had been prepared to accept what the market was offering.
<img src="/images/stories/alfredst2.jpg">
Take, for instance, 61-63 Alfred Street, Kew (pictured above), which last sold in May 2009 under the hammer with six bidders for $4.85 million in front of a big crowd. This time around another 100-strong crowd saw two bidders fight it out to $5.3 million. But instead of being sold under the hammer, it was passed in. It was being marketed by Jellis Craig agents Jim Shang and Richard James.
<img src="/images/stories/carolinest.jpg">
Another case is 6 Caroline Steet, Hawthorn East (pictured above), a good little single-fronter investment home being marketed by Marshall White agents Zali Booker and James Tostevin. In 2010 this sold for just over $1.3 million at auction. This time it passed in at $1.23 million, but not without strong demand from five bidders. The seller had the chance to sell if he wanted to.
Some may look at those pass-ins and see a market in trouble due to no sales. Yet there were a total of seven bidders across the two auctions, and the pass-in prices were not too far away from the previous sale prices. That indicates that we would have had a stronger clearance rate if sellers wanted to meet the auction price on the day.
Yes, there is weak bidder interest for overpriced and/or low quality offerings. But there is strong bidder interest on well-priced and quality homes – it's just that many times the level of that interest doesn’t quite match the expectations of the seller.
Mal James is principal of<a href="https://www.jamesbuyeradvocates.com.au/" target="_blank" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
 
 
 
 
</body></html>

Top-end Melbourne property market not as inconsistent as it appears: Mal James

<html><body>
The Reserve Bank‘s interest rate cuts can have mixed results at the top end of the property market.
The Reserve Bank gave us all a bit of a surprise with its recent rate cut of 50 basis points. But the impact of the rate cuts at the top end could be mixed.
The diagram below shows the progress of two identical hypothetical negotiations that started before Easter. Back then the difference between what the sellers wanted and what buyers were prepared to offer was $600,000.
<img src="/images/stories/malmay11.gif">
With the interest rate cuts, a couple of results could eventuate – especially at the top end where often there is only one buyer.
On the one hand, a lower interest rate may give the buyer confidence to offer a higher price, as long as he is feeling secure in his job. At the same time, if the seller was say overseas and had an exposure to currency movements, the interest rate change might make the seller nervous.
A large exchange fluctuation can alter the value of an offer more radically than any agent argy-bargy. So a seller at exchange risk may alter her price and help the deal and a buyer who is secure in his job may also help the deal in going a little stronger, as he finds borrowing to be marginally cheaper. With just a $100,000 difference between offer and expectation there may well be a deal done.
Alternatively, the events of the last few weeks may have the opposite effect. The seller may have looked at some of the recent strong sales on the top-end market and have lifted their expectations even higher, thus widening the gap. The buyer, on the other hand, may look at the interest rate cuts as an indicator of a struggling economy, and become more concerned about his future employment prospects, prompting him to reduce his original offer. Now the deal is even further apart, with a difference of $900,000 between offer and expectation.
The point of this hypothetical is to show how complex negotiations can be at this level, and how as a buyer you’ve got to navigate through a number of possible scenarios.
How do you get validation if you want to do more in the way of due diligence than take the selling agent’s word as gospel?
Personal research: At the moment researching the high end without being in the know has a higher degree of difficulty than an Olympic half pike from the high tower – there seems tremendous secrecy surrounding every sale. With secrecy comes its close friend “uninformed speculation“. And when you throw into the mix limited numbers of sales, inexperienced buyers can bake a very different cake when it comes to value.
Valuers: This is fast becoming a profession under siege as margins are cut dramatically by banks. This means cost-cutting internally, which can lead to a lowering of standards. And once habits of careful fact checking are replaced by wham-bam phone calls to those who have vested interests in rubbery figures, all of a sudden we no longer have credible valuations. Which is not to say that there are not some excellent valuers out there for the top end. But you need to question whether you should rely on those who have massive contracts with large developers, or who approach their valuations at 60 kilometres per hour with a Google maps mentality. Sure, they’ll fit in with what the selling agents tell you. And there won’t be any problems with the bank lending you the money. But if the figures you’re given are unreliable, you may have a big problem on your hands when it comes to resale.
Solution: Deal with the people who do the deals. Engage them to act on your behalf and ask them to justify and prove their selling or buying price thoughts. If the deal is big enough get verification though a reputable valuer – not one recommended by a selling agent, and not one who specialises in $400,000 Werribee homes – but a real one. The fee is between $3,000 and $4,000. In this low transaction and therefore weak information market they can be more valuable than a building inspector.
So how do you negotiate in this market?
When validation is not possible and the market is unclear going forward, you really need to be on your game when making decisions – presuming that good decisions are your aim.
So as boring as it sounds, be clear on your goals and whether they fit this market. For instance, buying a home with a short term time horizon and wanting low risk are almost mutually exclusive concepts right now.
Longe- term buying may well meet your emotional and financial goals.
Let’s skip the search strategies and some due diligence and get to pricing.
In this market its about price framing rather than price negotiation – by which I mean that haggling over $100,000 is really not the main game, it’s getting into the correct $1 million segment in the first place that’s the most important.
Mal James is principal of<a title="James Buyer Advocates" target="_blank" href="https://www.jamesbuyeradvocates.com.au/"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
</body></html>

Rate cut and currency changes could have mixed results for top-end property

<html><body>
With Easter 2012 over, many of you will be suffering withdrawals not just from chocolate but also from information about the property market – and more importantly from a lack of homes to look at.
Winter 2012 seems to have come early in terms of lack of properties listed for auction. Even with the holidays now over, there are still only a handful of auctions listed for the weekends left in April. In fact this is shaping up as one of the lowest mid-year auction months that I can remember for some time.
That doesn’t mean that there are no properties on the market at all. There are still plenty of off-markets (unadvertised homes), pre-markets (before they get to market), private sales with no advertising and stales (homes that were advertised a year ago and are now either off the net or on the very last page of the listings).
However, what this does mean is that if you are a buyer looking for an A-grade result in April 2012 you aren’t going to get the best deals by sitting back, thumbing through the glossies and turning up on a Saturday.
As a buyer it is important you understand what is going on, and you are not necessarily going to get that from the Sunday papers. With no public pointers such as meaningful $1 million-plus clearance rates you are going to have to look deeper than the dailies for your market indicators.
For instance, I am still surprised at the number of market watchers who talk to me mid-week in coffee shops or at Sunday sport who think that because they’ve heard the market is OK that prices must have been going up. In 90% of the 400 or so transactions we’ve looked at this year, the sale price has in fact been at or below vendor expectations of last year, not above. And while there has been a good spread of solid auctions, they have rarely exceeded “trade” price expectations. The main reason the market was healthy pre-Easter was because vendors were meeting the market, not because buyers were leaping to ridiculous heights to grab the gold.
On the other hand, when demand is still strong and stock is down as it is right now, prices tend to stay firm. Before Easter our demand indicator Bidderman, which shows an average number of bidders per auction, showed us that there is a healthy level of demand out there when the 3Ps are right – price, property and position. So there is still plenty of competition out there when the property comes up at the right price.
Hence, to use a sailing analogy, your search for a $1 million-plus home in bayside and Melbourne’s inner east in the next few weeks may require you to change tack. As with sailing, you will need to look for the winds in different spots and possibly away from the crowds.
So, what can you do to maximise your chance of finding your dream home at a good price this month?
1)      Do your own research. You need to look past the highlighted sales results that skilled agents will present you. These may not be giving you the full picture. As an informed buyer you need to balance out this information with that from results not highlighted by the selling agent. As a buyer it is incumbent on you to do your own independent homework if a good decision making process one of your home-buying goals.
2)      The early bird who has clear and relevant goals catches the worm – it might seem a worn-out saying, but it’s super relevant in this market. Yes, turning up is three-quarters of life, but you still need to perform. Your winter home searching effort needs to include weekly phone calls to agents, short, sharp emails, letterboxing, Excel spreadsheets. The good homes are not just going to fall into your lap as they did before Easter or in previous years. If you do, you may get some chances other don’t.
3) Get a rental. With very limited stock on offer, you’ll need an extra level of patience to avoid making a mistake. If your dream home is not there, it’s not there. In that case a six-month rental strategy may be far better in the long term than a ‘quick draw McGraw’ 10-year buying strategy.
Mal James is principal of<a href="https://www.jamesbuyeradvocates.com.au/" target="_blank" title="James Buyer Advocates"> James Buyer Advocates</a>, which advocates on behalf of buyers of property over $1 million. Mal writes weekly auction reports, advice and in-depth market analysis on James' website.
Winter photograph courtesy of <a href="https://www.flickr.com/" target="_blank">Flickr</a>.
</body></html>

Buying property in early winter demands a change of tack: Mal James

A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

[smartcode_project_cta:default project_id=152125]

Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Mal James

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News