Are you noticing the subtle changes of the differing PPP markets? Mal James

Are you noticing the subtle changes of the differing PPP markets? Mal James
Are you noticing the subtle changes of the differing PPP markets? Mal James

GUEST OBSERVER

So at 6.00 pm the James Buyer Advocates Clearance Rate was 83 percent and James Bidderman was 2.5 bidders per auction on the 24 auctions we covered. Mmmmm on the face of it very strong and it is; BUT……………..

Markets, markets, markets. 

During the week, before getting crunched at today’s 507 Royal Parade Parkville auction,  Craig Shearn of Jellis Craig put the fragmenting PPP markets into succinct context.  “Mal I think if anything the north is picking up here, as when I talk to the boys in Boroondara they are finding things a bit tougher. Its still good, but they are no longer full of the glory stories, week in and week out.”

Now I’ve taken some license with his words and paraphrased a bit – but I think it sums up the markets – they have, in 2016, become a lot more interesting.

Footnote: Craig Shearn was spot on re his advice on price, knew who his bidders were and gave a very polished auction performance. From my point of view it wasn’t enjoyable to watch, but it would have been so for his vendor. Hats off Craig!

We’ve prattled on week in and week out re A, B and C graders and the way Price points, Property types and Positions (3P’s) are performing very differently from each other in 2016 – which is a sign of a changing market.

In our opinion the Top End (7m+) has cooled, but it can be confusing for some buyers when we say that. We can’t prove it in the stats yet (lag with price reporting) and of course the K&B and RT Edgar Mexican Waves are still fully operational.

Now that is very different in our opinion from the $3m-$6m market in exactly the same areas, which has good bidder depth from locals on A graders and some B graders.

However, what we can show statistically, is some really interesting positional market differentiations, that buyers need to understand when they are pricing and bidding as we go into Winter 2016.

History: Remember these slides below in March 2015 James Market News. They were graphics that started a lot of work for us showing new buying clients they actually had alternatives in a booming market.

Click to enlarge

Are you noticing the subtle changes of the differing PPP markets? Mal James

Click to enlarge

Are you noticing the subtle changes of the differing PPP markets? Mal James

Now in 2016

Here are some more James Buyer Advocates graphics to show how the worm is turning and how we at James Buyer Advocates are showing Values and Pricing to our current buying clients. All data below is Jan – May 2015 v Jan-May 2016.

Click to enlarge

Are you noticing the subtle changes of the differing PPP markets? Mal James

Click to enlarge

Are you noticing the subtle changes of the differing PPP markets? Mal James

Hey please don’t use stats the wrong way – don’t be too specific as it will bite you – use stats for trend highlighting.

And what the agents know, what we at James Buyer Advocates know and what you as buyers should know is – that while the overall markets are appearing to be “steady’ish”; if you break it down geographically (Position P) you will see ups and downs and if you break it down to home types (Property P) and price points (Price P) then you will see further differentiation from 2015.

We do this on all pre negotiation values and this is only two suburbs and only on land values.

Source: All stats used were REIV and blocks of land were selected as those having a square box on them in the advertising – not too scientific, but close enough and reflective of what we are seeing on the streets.

Why is this all important Mal?

See below. If you lived in Brighton and wanted to move your family near Carey and you thought the local Bayside market reflected what was happening in Balwyn then a smart agent could be showing you some historic information resulting in you paying $333,360 more.

Click to enlarge

Are you noticing the subtle changes of the differing PPP markets? Mal James

Of course you may decide not to pay it and another buyer does, as there are still sales over $3,000 per sqm in Balwyn. The point is not that the above graphic is 100% foolproof, cast iron guarantee on what will be happening to every block on land in Brighton v Balwyn – of course not. But it does show you that in 2016 you have alternatives – there are more blocks selling for less in Balwyn.

If you lived in Balwyn and you wanted to move your family to be near Brighton Grammar and you thought the Balwyn market trend of 2016 reflected the Brighton market, then you would miss out at every auction – as there are more blocks selling for more in Brighton.

When valuing in today’s market prior to beginning negotiations before auction, at auction or in off markets/private sales you want to know.

1. What is really happening not just in the overall market, but also in your little patch, for the type of property and at the price point you want to buy.

2. That ancient history may be as close as last year and no longer relevant.

3. What the agent is seeing v what the agent is saying.

Mal writes weekly auction reports, advice and in-depth market analysis on James' website. This was published early June.

Mal James

Mal James

Mal James is principal of James Buyer Advocates, which advocates on behalf of buyers of property over $1 million.

Tags: 
Auction Property market

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