Chalk Road Logo for header

Summer Newsletter 2015


"Off and racing"

Picture of 9 Coolong

The memories of deafening cicadas, dripping ice creams, cricket on the radio and evening swims have faded into the distance. The real estate year is well and truly underway and has resumed at a strong pace. Last weekend’s 82% auction clearance rate surprised a number of onlookers and made for strong headlines, a common theme being the rate cut was fuelling the ‘raging fire’ that is the Sydney property market. 

We sensed something like this was on the cards having been overwhelmed by the number of people attending midweek opens, let alone the weekend inspections. One property we viewed a fortnight ago had close to 75 groups through with a conga line of people stretching down the street. Needless to say, it sold within 10 days, well before its scheduled auction.

Chapel St pictureThat said, the volume of properties auctioned last weekend will be greatly exceeded in coming weeks. Numbers will grow from 297 last weekend to almost 450 this weekend and 620 the following one. This second and third wave of 2015 listings (delivering much needed ‘fresh’ stock) has only reached the market publicly in the past seven days and the market is still evaluating their merits. A more reliable analysis of the market’s strength will become apparent once these results flow through in a month's time.

Nonetheless, there is a strong undercurrent at play and buyers are acting with real conviction and pace on properties that match their requirements. Just last night we attended the Double Bay auction rooms where two properties especially were the subject of intense bidding wars. A two bed apartment in Notts Ave, Bondi Beach without parking sold for $1.325m, a result made all the more remarkable by the fact the property one floor below with an identical floorpan (albeit with lesser views), sold for just $900k in late November.

Our next newsletter will bring you our regular detailed critique of the sub-markets within Sydney, though early indications suggest stronger growth from better quality homes in the $3m - $6m range, widespread and ongoing strength for apartments up to $1.1m whilst terraces and semis from $1.2m - $1.8m continue to sell for solid prices. 

It will be interesting to track the performance of the different regions of Sydney compared to last year. A quick look at the table below from Australian Property Monitors/Domain illustrates the range of growth that took place for the 2014 calendar year. Sydney has now enjoyed two very strong years of house growth (15% and 14% respectively) and another strong year is on the cards, albeit a growth rate in the single figures (7% - 9%) is anticipated as opposed to double digit growth.



Covering all bases

As 2014 came to a close, Chalk Road witnessed an episode which highlighted the importance of being prepared on a number of fronts when bidding for a property. Spending time to uncover details of your likely competition (i.e. who and how many), finding out the vendor's circumstances and understanding the general process of an auction all improve your effectiveness as a bidder. In this case, a buyer who decided to “go it alone” in the auction room and clearly hadn’t done their homework found themselves making a costly error.

Bourke St pictureWe had visited this property in question but very quickly made the decision not to pursue it. We had uncovered the vendors had already bought and needed to sell. Making things a little more precarious for the vendors, the property was being auctioned on the cusp of Christmas - the “last chance saloon” if ever we had seen it. This was the second campaign the property had endured in ten months and it failed to gain much traction previously. We also knew the level of interest was decreasing as the auction drew nearer; three likely interested parties became no more than two, once the neighbour (whom we had spoken to) removed himself from the picture. 

We attended the auction anyway, given any contender may well have be our competition for the next similar property. Despite the presence of 40 people at the auction, by turning up well in advance and watching all the movements of ‘key personnel’, it became apparent there was only one registered bidder. Nevertheless the auction proceeded so we watched with interest as to how this bidder would play it.  

The auctioneer opened with a request for opening bids, “Do I have $1.9m to start me off………….well surely someone will offer $1.85m………..I can’t go any lower than that”. There was silence from all those gathered and very little enthusiasm shown. We assumed this prospective buyer had also picked up on the obvious and was sticking to a strategy of letting it pass in without a bid.

Goodhope St pictureThe Auctioneer then clearly announced, “As is my entitlement, I am going to place a bid of behalf of the vendor of $1.85m” thus providing a (shaky) line in the sand for the owners. The registered bidder had perfect conditions to engage in robust negotiations with the sales agent. Given the circumstances at play, and with no other competition, there was a good chance the owners would have been happy to sell for as low as $1.825m (if not lower), just to ensure they were no longer holding this property over Christmas/New Year.

The sales agents' focus had most likely turned to the looming post-auction negotiations as he didn’t even bother to wander over to his one registered bidder for a last minute pep talk. The Auctioneer went through the motions, “Ok, well it looks as if we will be taking things inside. $1.85m is the offer, going once, going twice, going three times………..”.  Then quick as a flash, the bidder shot his hand up and said “$1.9m”, a cool $50k more than  the vendor bid.

In a split second, the property had gone screaming past its reserve, the sales agent had banked his final sale for the year, the auctioneer’s face was covered with a smile of incredulity and the owners had just experienced their own Channel Nine / Alan Bond moment. Completing the joy in the front garden, the successful bidder was in raptures at having secured the property, believing he had delivered a knockout blow to his competition, which unfortunately was non-existent.

Be it an error of judgement or simply being oblivious to what was happening around him, this case study also highlights the importance of thorough preparation BEFORE an auction. Turning up with a bidding strategy in place, irrespective of how sound that strategy may be, is only part of the equation. Not all properties sell under the hammer, so thinking through what might happen if a property passes in is just as crucial. Had this person known about his competition and the vendor's circumstances, he would at least have had the confidence to allow the property to pass in and begin negotiations on a firm footing. 


Cashing in the chips

With so many home improvement shows on our TV screens, more people are taking the DIY route to making a dollar. Buy well, undertake some cosmetic renovations here and some structural improvements there and then hope the market gives you a fair return for all those weekend visits to Bunnings! Well in 2014, some owners didn't have to lift a finger to make a buck. Check out these results of homes that had hardly been touched by their owners but still turned a pretty profit.
Hopetoun Ave

174 Hopetoun Ave, Vaucluse

Oct 11      $4.5m
Aug 14     $5.635m
2.75yrs    25.2% 

No modifications at all in this 5 beds, 5 bath, 2 car house between its last two sales. Located at the end of Hopetoun Ave near Watsons Bay, just opposite the path to Kutti Beach.
7 Hill St pic

303/42 Refinery Dr, Pyrmont

Oct 12     $1.595m
Mar 14     $2.038m

1.5 yrs     28% 

Absolutely no change to this 3 bed, 2 bath, 2 car apartment in the Solander building on the water at the end of Pyrmont.  The 155sqm low-rise apartment had NE views over the water from its master bedroom & living area.
Gipps St pic

114 Gipps St, Drummoyne

Dec 11     $1.255m
Sep 14     $1.552m
2.75yrs     23.6% 

The vendors did nothing to this house other than "get a load of bricks, take out some picket fence and make a 2nd car spot" at the front of the 4 bed, 2 bath, 2 car house.  
wood st pic

81 Wood St,    Manly

May 10     $2.9m
Dec 14     $3.8375m
4.5 yrs     32% 

This large house had views to Balmoral and the City and had numerous living spaces. It was a unique property which suited many buyers. The eventual buyer had been looking for a long time and just had to have it.
John st pic

99 John St, Woollahra 

Apr 13     $1.776m
Dec 14     $2.050m

1.5 yrs     15% 
The owners of this home had considered adding a fresh coat of paint to this this 5.5m wide, south facing terrace with 3 bedrooms and 3 bathrooms in the heart of Woollahra.  Whilst there was no parking there was the potential subject to council approval.
32 Refinery st pic

107 Darling Pt Rd, Darling Point

Oct 12     $835k
Feb 15     $1.01m
2.25 yrs    20% 

This 2 bed, 1 bath, 1 car, 84sqm apartment had no changes made to it over the vendor's occupancy. Whilst the bedrooms and kitchen faced north through treetops, the main living room and balcony faced south.
8/60 darling pt rd pic

7 Hill St,  Queenscliff

Apr 12     $1.915m
July 14     $2.45m
2.25 yrs    28% 

These owners had no need to touch this 4 beds, 3 bath, 1 car semi as they bought it newly renovated in the popular Hamptons Style just two years earlier.  This time around, it sold in just 10 days for a whopping $535k more.
Frenchs rd pic

40 Frenchs Rd, Willoughby

Jul 11      $1.14m
Oct 14     $1.81m
3.25 yrs    59% 

A remarkable result with no change at all to the south facing house nor to its landscaping.  This 3 bed, 1 bath, 1 car home on 373 sqm of land was a walk to the Northbridge Plaza shops and the city express bus.
68 palmgrove pic

31 Binning St, Erskinville

Oct 10     $810k
Dec 14     $989k
4.2 yrs     22% 

The west facing 2 bed terrace on 115 sqm was a short walk to the train station. The 3.3m wide home had its only bathroom on the ground floor through the kitchen and an externally accessed laundry. There was no change to the house between campaigns.
Loving our job

Last year we helped many individuals and families move into new homes or secure investment properties. The diversity of our clients and the variety of their requirements makes our work so interesting. Some happy outcomes from our work in 2014 included:

  • Helping quite a number of rural NSW families secure boltholes in town for their regular visits to Sydney; one sport-loving farmer just ‘happened’ to land up 200m from the SCG/SFS!! 
  • Securing the dream-beachside-bachelor-pad for one client who never came closer than 14,989km to viewing it at any stage of its campaign 
  • Uncovering one of Sydney’s finest homes and negotiating its purchase for a local family in a discreet off-market transaction 
  • Securing the perfect home for a young family in less than four weeks through shrewd pre-auction manouevring, following three years of their own efforts which had caused frustration and disappointment
  • Enhancing the property portfolio of an ex-pat couple by adding a beachside investment apartment to one we bought for them in 2013; the next target is already in their sights
  • Securing a stunning modernist-architecture home for a US-based client whom we first met at an open home three years’ prior
  • Exchanging contracts on a lovely home late on Christmas Eve for a family who can't wait try out their new tennis court
  • Guiding a number of downsizers on their search for exactly the right place after years living in established family homes 

Please call us if you need help finding a suitable property, if you have found one and just need some help negotiating the purchase, or if you just want some trustworthy advice in navigating the Sydney real estate scene.  

Best wishes,
Edward and Hannah Flitcroft
+61 414 569 604


Rugby and real estate - a great mix!

2015 sees Chalk Road kick off our third season sponsoring Sydney University Rugby Club. We receive great pleasure in supporting this incredible organisation full of motivated, impressive individuals as well as a strong, tight knit network of former-players. The Uni first grade squad has already locked horns with the NSW Waratahs in a pre-season trial two weeks ago (and actually jumped them early on scoring the first try of the game)! 

Whilst up to 25 Uni players will be spread across Australia's five Super Rugby teams this season (including Waratah's Captain Dave Dennis and their halfback Nick Phipps), others such as Ed Jenkins and Greg Jeloudev will be visiting all corners of the globe as members of the Australian Sevens team - this week they are in Las Vegas. No doubt the 2016 Rio Olympic Games lurks in the back of their minds. But 'keeping it real' each week, more than 210 players will pull on the blue and gold Uni jersey as they set out to defend the NSWRU Club Championship title they won last year.  

Round Two on Saturday March 28th will see the Club heading down to Bowral to play arch rivals Easts. Chalk Road will be making a weekend of it as well, combining some inspections of Southern Highland properties with some top flight rugby and a good steak and glass of red that night. If you have any interest in the property scene down there, we'd be happy to show you around. In fact, we welcome any of our clients or friends to join us at any Uni home game during the season in what is a very family-friendly environment.  
Syd Uni Pic

Find Out More About Us

Contact us or go to our website to read more about our services and what Chalk Road can do to help you find your ideal home or investment property.
We have an archive of our past newsletters which you are welcome to read.  If you would like to read them click here.

We are word of mouth

Chalk Road is reknowned for its discretion and relies on word of mouth for much of its business. Please forward this newsletter onto any friends, family or colleagues whom you think may be interested in Chalk Road's services.
The information contained in this newsletter should not be construed as investment advice. All parties are encouraged to seek independent guidance from their accountant or financial advisor.

Copyright © 2015 Chalk Road, All rights reserved.