Melbourne’s million-dollar market could be turning around, but no momentum in super-prestige property

Melbourne’s million-dollar market could be turning around, but no momentum in super-prestige property
Mal JamesDecember 8, 2020

Analysing the data from recent auctions, 25% had three or more bidders while only 10% were ducks (i.e. no bidder auctions). These are the sort of stats that provide early indications of a strengthening market. Should this demand be sustained on the solid auction numbers in the next few weeks leading up to Easter, it’s safe to say for now that the $1 million-plus market, as a whole, has performed a lot better than most expected and that we may be in fact be in a stabilising price phase.

However if we have a repeat of 2011, where demand fell away after a fairly positive pre-Labour Day 2011 market, then all we are seeing now is a bit of price spiking.

As we keep saying, it is early days. But the numbers are substantial and if the clearance rates continue to improve and the bidder numbers continue to increase then in time we could see an end to price falls and prices could in time begin to climb again (the current market has been trending downwards since Anzac Day 2010).

Our focus for the above statements is the $1 million to $2 million segment. We are still not seeing any significant positive momentum in the $3 million-plus market. Sure, agents are claiming they’re getting offers on properties and yes, some long-term stales are being cleaned up. But they are at lower prices and happening when the vendor is meeting the market not the other way around. So before we acknowledge any uniform improvement across all segments of the market, we need to see the top level perform in greater numbers and a lot more consistently.

Overall the $3 million-plus market is seen by optimists as treading water and by realists as still edging backwards.

Do all the good deals have to drag out?
Not necessarily. You can make it hard for yourself and the other side if you want, but good negotiations aren’t necessarily long, unpleasant and drawn out. Indeed, why wouldn’t you negotiate in a timely manner if it is right for both parties?

There are many deals out there in real estate land that haven’t worked out just because both sides have insisted on taking what they think is the “moral” or “right” stance (otherwise known as the “ego” or “victim” position). But over the decades we have found that the best position for buying and selling is the “agreement” position.

The fact is that there is no relationship between the time and pain involved in a negotiation and the quality of the outcome you end up with.  Otherwise how could anybody think a 15-minute Saturday auction was a good thing?

So don’t rush. Don’t go in unprepared or without good representation. But at the same time don’t snatch defeat from the jaws of victory for no good reason other than it seemed too quick or too easy. How dumb would it be if the negotiation could have been good, simple and quick and you still said no? Helllooo, sucker.

Mal James is principal of James Buyer Advocates, 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.

 

Mal James

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

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