More stand-offs between Melbourne buyers and sellers, as agents report continued caution

Properties appealing to varied buyer groups triggered the hottest bidding duels at Melbourne’s weekend auctions.

But there were also dozens of stand-offs between buyers and sellers, with some vendors forced to lower their expectations and take a “haircut” on the selling price.

Real estate agents reported continuing buyer caution and a trend to one-bidder auctions as well as to buyers trying to push prices down in post-auction talks.

In many suburbs, selling at auction is a 50-50 proposition. Melbourne’s weekend auction clearance rate slipped to 52.7 per cent from 617 reported auctions (887 auctions were scheduled), according to Domain Group data.

On Saturday, A-grade homes (renovated, in quiet streets, near schools and transport) mostly met with solid demand. But market watchers say properties that attract downsizers, upsizing families, professional couples and investors in roughly equal measure are increasingly securing the best results.

Marshall White director John Bongiorno said there was just one bidder on a substantial terrace house at 46 Howe Crescent, South Melbourne.

Auctioneer Oliver Bruce passed in the fully renovated, four-bedroom property to the bidder at $4,950,000. After talks, it sold for an undisclosed sum well north of $5,000,000.

Mr Bongiorno said two of the three homes he auctioned on Saturday also had one bidder.

“At two of the auctions, we had buyers come up after the auction and want to be involved in the negotiations,” he said.

“I know we are not selling a lot of properties under the hammer at the moment but buyers, I think, are playing games by waiting and trying to negotiate post-auction. It is quite frustrating for the vendors and for the buyers themselves.”

Marshall White’s Justin Long also had one bidder at the auction of a 1920s residence on 613 square metres at 5 Gordon Grove, South Yarra. This home was passed in for $3.925 million to the solo bidder and later sold for $4,000,000.

Seasoned agents say the auction market has been gripped by a “herd mentality in reverse” in which prospective buyers see other people refrain from bidding, so they don’t bid themselves.

On Saturday, auctioneer Phil de Fegely was unable to land a genuine bid from the 50-strong crowd at the sale of a five-bedroom, Victorian-era home at 51 Chrystobel Crescent, Hawthorn.

He passed in the property on a $3,800,000 vendor bid, and it sold to a family for an undisclosed price a short time later.

Mr de Fegely said immediately after the Bekdon Richards-run auction there were two interested buyers in the crowd, and that some buyers appeared to be trying to “outsmart” vendors.

The interesting thing about the Chrystobel Crescent home is that it was offered for sale late last year with a $4,700,000 to $5,100,000 quote. On Saturday, the house, which has a four-storey apartment development currently going up next door, was quoted at $4,000,000 to $4,500,000.

Bekdon Richards director Evan Lykourinos said buyers were very cautious.

“Definitely, the prices have come back,” he said. “That’s evident across the board (and) the buyer pool is certainly a lot lower. Now you have to be attentive to the buyers and understand what it is they want to buy and then try to put the deals together.”

This weekend’s auction disposal rate was 2 percentage points down on last week’s clearance rate and 9 percentage points below the clearance rate on the same weekend a year ago, when a far bigger inventory of homes – 1215 – went under the hammer.

Of the 250 properties passed in this weekend, about 175 were passed in on a vendor bid – a tell-tale sign that conditions favour buyers.

But, this isn’t the case for every property.

Jarrod McCabe, a buyer advocate with Wakelin Property Advisory, said multi-faceted appeal always helped properties to transact, particularly in a flatter market.

“If you are down in one sector, such as with the investors or first-home buyers, then the downsizers might step up,” he said.

McCabe said an extended semi-detached cottage at 38 O’Grady Street, Clifton Hill, was quoted by Jellis Craig at $1,450,000 to $1,500,000 and drew three bidders on Saturday. The property was passed in for $1.537 million and, after negotiations, sold for $1.539 million, which McCabe said was a strong price in the current small-house market.

“It was very wide for a terrace house and on a deep block of close to 250 square metres,” he said. “The real plus for terrace houses on the north side of O’Grady Street is that they have proper street access at the rear. The car access is extremely good, so it makes the house more desirable to owner occupiers or downsizers who are keen to have off-street parking of some sort.”

He said cottages on big blocks in Clifton Hill attracted young families because of good access to primary schools, as well as investors who knew that such properties could be let to young professionals.

Advantage Property Consulting reported a string of one-bidder and no-bidder auctions in the southern and eastern suburbs.

Managing director Frank Valentic said some newer apartments were achieving next to no capital growth. He said a one-bedroom unit at 33/69 Palmer Street, Richmond, quoted by Hocking Stuart at $450,000 to $470,000, was sold to a solo bidder after a pass-in for $452,000.

The unit had last transacted in 2014 for $448,000, he said.

The cheapest property reported sold at the weekend was unit 5/562 Pascoe Vale Road, Pascoe Vale, which fetched $241,000 through O’Brien Real Estate.