$600 Million Property Splurge Seals Record Day

The Sunday Age

Sunday October 28, 2007

Deborah Gough

A TOORAK property tycoon has given himself a bonus by paying the royal sum of $6.7 million for a home he will tear down for a tennis court.

While auctioneers RT Edgar remained silent about the new owners, The Sunday Age can reveal that Peet Ltd chairman Tony Lennon took a once-in-a-lifetime chance to knock down 12 Maple Grove for a good hit of summer tennis on the 831 square-metre property.

While property watchers described it as "a crazy price", he was not the only one to pay top dollar for "vacant land" yesterday, during a record auction weekend that saw 1350 listings.

Real Estate Institute of Victoria spokesman Robert Larocca said the market paid more than $605.9 million for about 90 per cent of the properties yesterday. This compares to just $263 million this time last year.

The clearance rate held steady at 81 per cent, as it was revealed the median house price had surged $50,000 on last year's figure to $431,000.

With so many properties at auction this weekend, amid interest rate speculation and in the midst of an election campaign, this bumper weekend was seen as a litmus test for the heated market.

Marshall White auctioneer John Bongiorno said yesterday was the biggest day on record for the inner-eastern agency, which sold more than $47 million in property. Contributing to it were 10 bidders who fought it out for 36 Anderson Street, South Yarra, which sold for $5.4 million. Another significant sale was a weatherboard home at 17 Westgarth Street, East Malvern, which sold for $2.65 million, with four bidders pushing the price $400,000 over the reserve.

"Despite the ANZ forecasts and the threat of interest rates rising it hasn't scared buyers off," Mr Bongiorno said.

Property valuer and buyer Peter Hay said buying was solid without being strong, although owner-occupiers were paying high prices for properties in the 10 kilometre city radius and bayside. Parents were also pitching in to help their children get into the property market in the $400,00 to $600,000 price range, he said.

Proving the bayside drawcard, Hodges director Julian Augustini reported that Hampton East had broken the million-dollar barrier with 17 Park View Crescent selling for $1.2 million.

Hocking Stuart spokesman Scott McElroy said spectators were down generally, although hundreds turned out for the charity sale of 7 Collins Street, Brighton, which sold for $2.92 million, with $350,000 of the proceeds going to Jim Stynes' youth welfare organisation, Reach.

Hocking Stuart auctioneer Chris Murphy said prices were being driven by parents wanting to get their children into the property market.

"There are a lot of baby boomers out there with huge war chests of superannuation wanting to get their kids into a property," Mr Murphy said.

"It is not uncommon to see the kids at an auction stop bidding and their parents standing behind them and they keep going," he said.

Balwyn investors Tricia and Nick Kallinikios bided their time yesterday, before bidding on a Richmond property.

They had been looking just a few weeks, they liked the house and were looking for a rental property. The conversation turned to the staggering price hikes announced yesterday.

"I would hate to see the price of bread rise like that," Mrs Kallinikios said.

In three short bids the Kallinikioses had bought their first home in 18 years since buying their family home. They paid $571,000.

Mr Bongiorno said this week's record auctions were caused by the wedge of school holidays and Derby Day. Inner-eastern and southern auctions will largely shut down next weekend when the Spring Racing Carnival peaks.

Australian Property Monitors general manager Michael McNamara said part of the pent-up auction supply was the result of more auctions in the traditional "private sale" market in outer suburbs.

"When the economy is going well people feel more comfortable selling their property by auction," he said.

Mr McNamara said private sale vendors' discounts were near to the lows of 2003, with vendors discounting 5.5 per cent from the advertised prices.

But while the number of auctions has soared, figures show it is taking longer to sell a home. In the last price boom in 2003, it would take on average just 50 days to sell a home, while August figures from this year show it is taking 86 days.

Hot property

? Number of properties listed for auction 1350

? Houses listed 779

? Apartments listed 340

? Clearance rate was 82%

? Money paid: $605.9m plus

? Most expensive house: $6.7m

? Cheapest house: $182,000

SOURCE: REIV