How effervescent is today’s real estate market? How accurate are agent’s valuations?
We hear all the time of properties selling for much more than their reserve. You can see the dollar signs light up in the eyes of owners. If you have a desirable property it seems there is almost no telling what it might fetch at auction. Selling a house can be akin to winning the lottery.
But TWO million dollars over reserve? That really is something to write home about!
It’s what happened recently at an auction in the very salubrious Melbourne suburb of Toorak.
An 870 square-metre block at 12 St Georges Road is believed to have set a land value record for the area when it sold for $9,200,000 or more than $10,000 per square metre and $1,820,000 above the reserve. What made the price even more remarkable was that a similar property next door had sold earlier in the year for $6,650,000.
The crowd of 120 who attended the auction were gobsmacked. The auctioneer, Mr Warwick Anderson of RT Edgar wasn’t speechless but almost. “It was purchased by a nominee,” he said and, “he was aware they planned to knock down the property to rebuild a single house.”
“A combination of two street frontages, a north facing block and of course, the Toorak postcode, led to strong competition.Most sales above $5 million never go to auction and are instead bought and sold through expression of interest campaigns or off-market deals. But this particular property found its way to the auction block because it was a deceased estate, Mr Anderson said.
Some put such strong demand down to the US election and the beginning of Donald Trump’s presidency. No-one saw that one coming either. We live in very unpredictable times.
Recently a remarkable increase in private jet arrivals has been reported at various New Zealand airports. Many displaying USA registration markings. It seems their owners are exhibiting some disquiet at happenings north of the equator and are seeking safe havens as far away from the rest of the world as they can get. And they are prepared to pay top dollar for the privilege.
Buyer’s agent David Morrell said he believed several bidders for 12 Georges Road were Chinese nationals, reacting to the news of Donald Trump’s election win.
But it’s not just post Trump. It’s post Brexit, post Fukushima, post Nice / Paris terrorist attacks.
“The world has changed as we knew it and I think people are reacting to that,” said Morrell. “As someone said to me recently, ‘post-Trump, watch them come’.”
But you have to wonder what goes on in buyer’s heads. It can’t just be the heat of the moment.
Put yourself in their shoes. Say you’re 50 years old and worth 1 billion dollars. And you live to be 100. That’s 20,000,000 per year to spend until the day you die. What’s an extra 2 million to get the place you want?