It’s simply the most significant two-speed property market I have witnessed in over a decade of buying & advising on Melbourne real estate.
As a buyers agent at Industry Insider, I attended and inspected nine homes in South Yarra and Prahran this week. We witnessed four auctions yesterday, and yes, you can sense the nerves & trepidation from buyers.
Of the homes that went to auction, there was an average of 2 bidders per auction. People are interested in buying, but some are just lacking confidence in doing so. You could call it, waiting in the wings, with promises of a seasonal bounce upwards in volume come Spring time (fingers & toes crossed)
Of the three properties that passed in, there were some commonalities. Buyers are fearful of the cost and time to build in the new post covid world, and let’s face it, Victorians want certainty after what we all went through in 2020 and 2021. Tired and compromised homes are passing in, and buyers not prepared to stretch their bidding limits for homes that need major work.
Another critical element of two of the three properties that passed in yesterday, is that two did not offer any off-street parking. Savvy inner-city buyers understand how important and valuable an OSP is.
In justifying the low supply side of the equation, this free-standing Victorian at 25 Fawkner Street, South Yarra, is the only house online for sale in South Yarra in the 5.5-6M mark. 90% of buyers would classify this as turn-key move-in ready. The 10% would want to change and improve a few items. But overall, this one ticks almost every box! https://www.realestate.com.au/property-house-vic-south+yarra-142255676
Question: How do you value a house like 25 Fawkner Street South Yarra when there are no comparable sales, when demand for move-in ready homes is high, and supply is non-existent? You have to use the summation method of valuing.
Based on the recent sale of this house (below) which we and the selling agents deemed to be (land value only) SOLD $2,950,000 If you divide the land size of 346 m2 you can surmise a sqm rate of $8,526 per m2.
If you take that sqm rate to the land at Fawkner, based on the land size 527 m2, approx times the land value price of 14 Powell. We calculate the land value at 25 Fawkner Street South Yarra to be approximately – $4,493,000.
That’s the land , what about the house? To replace the house at 25 Fawkner Street. I’ve completed a couple of renovations, (pre covid) but I’m not a builder, so this is just an estimation. I don’t think you would get much change from 2- 2.5 Million, then add the pool and the landscaping. Add the two costs (land) & (replacement) together and a few herbs and spices & you have a guide on price. Please don’t rely on my build estimation; take your builder through and see what they think.
AUCTION RESULTS 3RD JUNE 2023
15 Perth Street Prahran Asset Class = A+ Free Standing House on North West orientation
Agent – Zoe Pike of Jellis Craig – Auctioneer – Nathan Watterson
Two bidders –Passed in on a live bid of $2,010,000 – Sold after for $2,050,000
Asset Class = B – Semi-detached house on a corner allotment, construction quality low.
Agent – David Stringer of Marshall White
Bidders Three, SOLD $1,380,000
Asset Class = B, Semi-detached house on the south side, with no off-street parking
Agent – David Volpato of Marshall White
Two bidders – Passed in at $1,880,000 – SOLD after for $1,915,000
Andrew, this was renovated; why did this pass in if renovated homes are in strong demand? Well, it was only two bedrooms, it was south facing and had no off-street parking!
Asset Grade = Free standing house loses points for being a weatherboard versus brick. South facing and no car park, so that brings it down to a B
Agent – David Stringer of Marshall White
Asset Class = B = Semi-detached house on the south side of the two would be a B+ if it were on the North side.
We had access to this property before it was staged and prepared for sale. We opted against making an offer due to the orientation on the block and the amount of work required to allow the floor plan flow for functional living.
Agent – Edward Carlisle of Woodards South Yarra
Auctioneer – Phillipe Batters, possibly Melbourne’s longest-serving experienced real estate agent. Circa 1984, well done Phillipe
Three bidders – SOLD Under the Hammer for $1,802,000 to a buyer that never walked through the home. (Sight unseen) WHY only they will know!
Asset Class = Free standing house with a car space, east-west orientation. We had access to this property six weeks ago and made a lowball offer which was rightly rejected.
Agent & Auctioneer David Scholia of Jellis Craig Armadale
Three bidders – SOLD Under the hammer for $1, 845,000
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