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The weekend of June 1 saw the start of winter auctions for 2013.
A running joke in the industry is that if you’re a buyer intending to bid on a weekend auction - pray that it rains!
We at Secret Agent wanted to ask ourselves a very simple question. Could rain affect auction prices?
Would it have a detrimental effect on property pricing?
Our initial thoughts were that it wouldn’t impact results. If a buyer was set to bid on a property, the weather wouldn’t impact the way a serious purchaser would peruse it.
However, we started following some interesting research on the correlation of stock market performance and the weather, and this started our quest to establish if in fact the Melbourne property market was influenced by the weather.
The research mentioned was prepared by the University of Berkeley, and compared the DowJones Industrials and weather patterns from 1948 - 2010.
The market recorded an average reduction of 2.8% on cloudy days over that time period (62 years of data).
We looked at the winter months when an auction occurred on a wet day (i.e. more than 4mm of rain) and there was an average price difference of of 5% less as opposed to auctions that took place on a dry day with less than 4mm of rain.
This finding was compiled with 2012 Melbourne sales results that occurred on a Saturday (i.e. at auction) between June and August 2012.
<ul>
<li>Average auction result with less than 4mm of rain, $1,003,300</li>
<li>Average auction result with 4mm or more of rain, $956,800</li>
</ul>
The lower 5% difference could be expected for property owners auctioning on a rainy day!
The one saving grace to this situation is that some correlations over the past decade show that prices on a whole are stronger in winter than those at other points in the year.
The reason for this is the scarcity of stock in winter. A vendor could be wise to sell in winter, but only on a dry day!
Paul Osborne is managing director of buyers' advocate <a href="https://secretagent.com.au/" target="_blank">Secret Agent</a>.
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Wet winter days can impact auction results: Paul Osborne

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Melbourne buyers' agent Paul Osborne of Secret Agent has looked at some of Melbourne's top inner suburbs to get an indicative price per square metre. 
The monthly focuses on houses in Melbourne's inner-city suburbs within a six-kilometre radius of the Melbourne GPO, addressing 26 suburbs.
"Our square metre-rate comparison is the first of its kind for the inner-city suburbs of Melbourne," he says.
"As expected for the period July to September 2012, East Melbourne was the most expensive of the 26 suburbs reviewed, with a median price of $12,676 per square metre of land.
"The most economical inner city suburbs were Brunswick at $2,546 and Brunswick East at $2,514.
"The median price per square metre in the premium suburb of Hawthorn at $3,281 demonstrates the traction that the inner city suburbs have in the property market," he says.
 
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At $2,514 per square metre Brunswick East has cheapest house prices in inner Melbourne: Paul Osborne

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We get the odd frustration from having an auction operate under a different formula from the standard schedule 1 auction (explained below).
A few weeks ago, we were bidding on behalf of a client for the property 74 Falconer Street North Fitzroy (pictured below). Half an hour before the auction, we were made aware that one of the owners of the property were intending to bid at their own auction. The sale situation was a deceased estate.
<img src="/images/stories/2012/09/falconher.jpg">
A number of siblings were the beneficiaries, and one sibling wanted to buy the property from the other siblings. They used an open market strategy, and we ended up being outbid by that sibling at the auction.
It was a disappointing situation. We felt that the entire campaign should have this mentioned in its marketing material rather than being made aware just 30 minutes prior to the auction.
As a guide to these confusing situations, we’ve included below the different types of auctions so buyers can be best informed about these and what they mean.
By law, the estate agent must display the auction rules 30 mins prior to auction. The auction can either be schedule 1, 2, 3, 4 or a schedule 1 with an alternative.
Here is the breakdown:
Schedule 1:
The most common auction in Victoria. A schedule 1 auction allows the agent to place a bid on behalf of the vendor, however no co-owner bidding to take place.
The alternative to schedule 1 is exactly the same listed above with no vendor bidding at all. This is the purest auction possible. However, most auctions will not use this.
Schedule 2:
Where two co-owners own the property, one co-owner may bid for the property, plus the auctioneer may also take a vendor bid on behalf of the owners.
Schedule 3:
The property has two owners or more, and some (but not all) co-owners may bid for the property. The auctioneer may also take vendor bids.
Schedule 4:
Two or more co-owners own the property. All co-owners may bid on the property, however vendor bids cannot be taken by the auctioneer.
This can be a marriage situation were both husband and wife are bidding for their own property together with the open market!
A good tip for property buyers is to always look at the rules of the auction before you intend to bid. Even take a photo with your smartphone to ensure that the auction you are bidding on is a pure auction. Owners bidding on their own property can distort the price paid to unrealistic levels, and you don’t want to be left buying a property at a figure that isn’t market driven.
Paul Osborne is the founder of Melbourne buyers' agency <a target="_blank" href="https://secretagent.com.au/">Secret Agent</a>.
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Make sure you understand the type of auction you are attending

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The decade of 2000 to 2010 was a special one. With the exception of 2008, property prices went in one direction – up!
Melbourne clearance rates highlight the occurrence. 
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<a rel="shadowbox" href="/images/stories/2012/08/osborne.jpg" title="Click to enlarge"><img src="/images/stories/2012/08/osbornethumb.jpg"></a>
Source: <a target="_blank" href="https://www.reiv.com.au/">REIV</a>
According to The Economist, Australian house prices are still 36% overvalued.
Melbourne has been Australia’s most dominant city over the past decade. Over the past few years (2011-12), the Melbourne market has started to experience the hangover effects from the 2008 GFC government stimulus that artificially boosted auction clearance rates and helped propel the exuberance.
Sections of the market around the inner-city pockets are still showing resistance to the changing market conditions.
There are numerous examples of those sales that haven’t fared well in the current market. These are the places that have been sold twice within the past five years or have at least attempted to do so.
It's a list of properties that haven't been so lucky:
<img src="/images/stories/2012/08/osborne12.jpg">
43 Summerhill Avenue, Glen Iris
Then: May 15, 2010, sold for $1,491,000
Now: Back on market at $1,299,000
 
<hr>
 
<img src="/images/stories/2012/08/osborne11.jpg">
217 Rossmoyne Street, Thornbury
Then: May 1, 2010, sold for $920,000
Now: August 18, 2012, passed in at $790,000
Asking price $849,000 
 
<hr>
 
<img src="/images/stories/2012/08/osborne6.jpg">
27 Collett Street, Kensington
Then: February 9, 2008, sold for $580,000
Now: July 21, 2012, sold for $547,500
 
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<img src="/images/stories/2012/08/osborne7.jpg">
60A May Street, Fitzroy North
Then: October 30, 2010, sold for $1,440,000
Now: June 2, 2012, sold for $1,432,000
 
<hr>
 
<img src="/images/stories/2012/08/osborne4.jpg">
8 Bayview Street, Prahran
Then: June 18, 2010, sold for $1,020,000
Now: March 31, 2012, sold for $960,000
 
<hr>
 
<img src="/images/stories/2012/08/osborne5.jpg">
15 Collett Street, Kensington
Then: November 6, 2010, sold for $627,000
Now: March 13, 2012, sold for $589,000
 
<hr>
 
<img src="/images/stories/2012/08/osborne3.jpg">
10 Quantock Street, Canterbury
Then: September 17, 2010, sold for $2.1 million
Now: October 18, 2011, sold for $1.83 million
 
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<img src="/images/stories/2012/08/osborne10.jpg">
319 Richardson Street, Princes Hill
Then: November 14, 2009, sold for $1,045,000
Subsequent: September 18, 2009, sold for $1,033,000
 
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<img src="/images/stories/2012/08/osborne8.jpg">
47/1 Queensberry Street, Carlton 
Then: December 21, 2007, sold for $953,000
Subsequent: August 12, 2009, sold for $840,000
 
<hr>
 
<img src="/images/stories/2012/08/osborne9.jpg">
462 Canning Street, Carlton North
Then: August 18,2007, sold for $1,175,000
Subsequent:  July 24, 2009, sold for $1,100,000
Paul Osborne is the founder of Melbourne buyers' agency <a target="_blank" href="https://secretagent.com.au/">Secret Agent</a>.
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Nine Melbourne homes feeling the hangover effects from the 2008 GFC government stimulus: Paul Osborne 

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Talk often centres around Melbourne being an expensive city, and it is – make no mistake about it.
But how does Melbourne compare internationally?
We’ve analysed a number of Melbourne’s top suburbs to get an indicative price per square metre rate for property, and compared them to the world leaders across the globe.
For starters we’ve sourced the most expensive cities across the world to see how they compare. The top 10:
<ol>
<li>Monaco: $58,000 per square metre. This is world’s most expensive place. It helps when you don’t have to pay taxes!</li>
<li>London: $48,000 per sqm</li>
<li>Hong Kong: $45,000 per sqm (Houses only)</li>
<li>Geneva: $33,000 per sqm</li>
<li>Hong Kong: $27,000 per sqm(Apartments only)</li>
<li>Paris: $25,000 per sqm</li>
<li>Singapore: $24,000 per sqm</li>
<li>Moscow: $23,000 per sqm</li>
<li>Zurich: $23,000 per sqm</li>
<li>New York $21,500 per sqm (Apartments only)</li>
</ol>
(Data compiled for last quarter 2011)
We’ve used the average square metre price in Melbourne as our comparison point. We’ve also compared the most recent quarter prices and benchmarked them to houses only, so apartments have been excluded from the data.
So how do we compare for different suburbs? Here is an interesting selection:
• East Melbourne: $11,133 per sqm Melbourne’s highest-priced inner-city suburb, East Melbourne takes the cake.
• Carlton: $9,409 per sqm
• Fitzroy: $6,888 per sqm
• Brunswick: $3,380 per sqm (With 48 sales recorded, this was the largest data set collected for a suburb)
• Abbotsford: $6,785 per sqm
• Hawthorn: $3,443 per sqm (Suprising result)
• Albert Park: $8,181 per sqm
• North Melbourne: $7,230 per sqm
• West Melbourne: $4,986 per sqm
• Yarraville: $2,229 per sqm
• South Melbourne: $7,652 per sqm
Surprising outcomes were the low per square metre rate attributed to Hawthorn. Brunswick was the most accurate data example thanks to a pool of 48 transactions. The inner west showed the most favourable square metre rate, with Yarraville at just over $2,000 per square metre. West Melbourne was the most affordable suburb on the doorstep of the city.
Interesting takeaways are:
<ul>
<li>London is 21.5 times more expensive than Yarraville</li>
<li>Hong Kong is four times more expensive than East Melbourne</li>
<li>Monaco is 16 times more expensive than Hawthorn (When it comes to price per square metre of real estate)</li>
</ul>
Melbourne is an expensive city. However compared to world standards, Melbourne is still far behind the big cities (or tax havens) when it comes to price per square metre of land.
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Paul Osborne is the founder of Melbourne buyers' agency <a href="https://secretagent.com.au/" target="_blank">Secret Agent</a>.
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Yarraville, Hawthorn, even East Melbourne lag behind the world's big cities for residential property prices: Paul Osborne

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Meelbourne's top end has more big sales “off market” than on market at present.
The latest market conditions have created nervousness for many owners, and they’ve become a lot more cautious about adopting a full blown marketing campaign.
So the number of “off-market” sales is increasing rapidly, especially in the price range of $2.5 million and above.
We’ve now noticed that in the inner city for example, more sales are being made through “off-market” channels than advertised ones at present.
This creates a whole new world of discreet sales, handshake deals and confidentially agreements.
So what are the benefits of “off-market” transactions for buyers and sellers?
• Privacy kept in tact
• Home only open to the most qualified of buyers
• Buyers can negotiate free of any public street theatre
• Terms of agreement can be much more creative
• Prices kept confidential
• No large marketing commitments
Paul Osborne is the founder of Melbourne buyers' agency <a href="https://secretagent.com.au/" target="_blank">Secret Agent</a>.
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Melbourne top-end sales increasingly carried out off market

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The width of a terrace can make for huge variations in sale prices achieved.
The common terrace sits with a frontage of 4.5 metres to 5.1 metres. Suburbs such as Carlton, North Melbourne and South Melbourne are cramped with terraces of this size.
As the convergence of inner-city living continues to accelerate, many buyers are faced with the prospect of buying a single-fronted terrace, as the premium paid for double-fronted homes is often just too great.
We are noticing the slightly larger terrace, with a common frontage of between 5.5 metres to 6.5 metres is a hotly contested accommodation bracket.
The differences in prices paid is not a value for the extra land being purchased, but for the privilege of being able to find that type of property in the first place.
Price per square metre can increase by up to $750 per square metre for land that allows for that extra width. The homes sitting on these wider blocks also generally have a grander feel to them and strong bones for going up and out with renovations.
Carlton North
(Both properties need work, and the position is an excellent comparison.)
<img src="/images/stories/2012/05/cnorth1.jpg">
 
<img src="/images/stories/2012/05/cnorth2.jpg">
 
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<img src="/images/stories/2012/05/fnorth1.jpg">
<img src="/images/stories/2012/05/fnorth2.jpg">
 
 
 
 
 
Paul Osborne is the founder of Melbourne buyers' agency <a target="_blank" href="https://secretagent.com.au/">Secret Agent</a>.
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Paul Osborne

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