One year after Morry Schwartz’s no-reserve alpine auction, prices still chilled in Victoria’s ski fields

It’s been almost a year since Morry Schwartz sold 77 Falls Creek apartments in Australia’s biggest auction of alpine property. With the ski season now well underway Property Observer spoke to local agents to see how the market has reacted to the sales.

In late August 2011, Schwartz sold all his apartments in the Huski, Silverski and St Falls complexes in one massive auction event with buyers settling on their purchases after the season wrapped up. 

The no-reserve auctions attracted 350 people with 300 registered bidders. The cheapest property sold was a 13.5 square metre unit in the Silverski complex, which sold for $30,000.

RT Edgar Falls Creek agent Christa Zirknitzer says one year down the track things aren’t as bad as expected.

“Yes, it did affect the market, but it was quite limited,” she says. “People have to reset their price expectations based off that auction if they’re motivated to sell.”

“But there are still buyers left, I just sold one down in the village, and I’ve had an offer on another one.”

Now a recent REIV report says property prices in the Alpine region are down 22% for the year ending March.

She says a lot of vendors were upset with the massive auction, but not everyone was angry with Schwartz.

“A lot of them do say it’s good the properties are now off the market.”

Her colleague Rob Ford in Hotham says the soft market makes it hard to see the effect.

“It’s difficult to say whether it affected us or not. The market has been quite soft for a couple of years now. I didn’t actually notice any difference at Hotham.”

“It definitely took 77 buyers out of the market, but at the same time there are a lot of vendors with stock. And with these properties it’s hard to compare the apples with the apples,” Ford says.

The nature of many of the apartments sold put strict requirements on who could buy the properties at Schwartz’s auction.

Some 40 of the properties sold required bidders to have annual incomes of $250,000 or $2.5 million in net assets as they were offered under an unregistered management investment scheme operated pursuant to Australian Securities and Investment Commission instrument 11-0572.

“Because of the management options, they weren’t applicable to lots of people,” Zirknitzer says.

“A lot of people might look at a room that sold for $250,000 but then we would sell a similar apartment for $400,000 if it was free of any title or management charges,” Ford says.

One thing is clear, though. The market here is determined by the weather. The more snow, the more money there is to be made.

Apartments 208 and 209 in the Silverski Lodge are still up for sale for $44,500. The price is the figure the vendor paid for them in Schwartz's mass sell-off.

And apartment 202 in the St Falls building is up for sale for $495,000.