Mottled brown carpet, an original wood-panelled kitchen and a decades-old bathroom complete with a baby pink tub and black contrast tiles; These are just some of the features of 20 Collins Street, St Albans, a home that went to auction last weekend and defied sluggish market conditions to secure a premium price tag.
Auctioneer Francis Morello from Morello Auctions said the bidding war stretched on for more than 40 minutes, as potential buyers inched up their offers on the rustic property.
“The home was in a residential growth zone, so the value of the land was quite high. In this area, there’s a lot of interest for these types of properties so the bids just kept coming,” Morello says.
Starting with an opening bid of $700,000, the auction involved around 60 bids before the property finally sold under the hammer for $1,281,000. Though the successful bidder didn’t open the auction, he was active through the whole auction.
“I almost lost my voice towards the end!” Morello jokes.
“It was on the market at $970,000, so it achieved $311,000 over the reserve. The vendors were very, very happy with the result, and it just goes to show that they chose the best campaign and best strategy to get them that price.”
This impressive sales result is remarkable, considering the fact that Melbourne’s auction clearance rates have fallen over the last year.
As Morello points out, market conditions were so strong this time 12-24 months ago that almost any agent, regardless of skill or experience, could have set an auction date, engaged an auctioneer, and the property would have had a good chance of selling.
“Clearance rates were above 80%, so a sale was likely. But especially in a market like this today, where we’re getting a lot of negative feedback due to low clearance rates, vendors really need to do their research before they begin an auction campaign,” he says.
“They need to research who they’re going to be working with in terms of real estate agents and auctioneers, and understand their track record and experience. Personally, I’ve been an auctioneer since 2010. I handle 5 or 6 auctions every Saturday. Auctions are a passion of mine, so I wake up so excited to go and call auctions!”
20 Collins Street was sold by Ray White St Albans, and they are a team that “know how to run a strong auction campaign,” Morello adds.
Indeed, Shaun Marijanovic, director of Ray White St Albans, has been in the real estate industry for more than 30 years. He and his team routinely achieve outstanding sales results for their clients, in some cases up to 49% above reserve, and in one instance $610,000 over reserve. Marijanovic says that in numerous cases, they have achieved between $50,000 and $165,000 over reserve, thanks to their robust buyer database and strategic marketing campaigns.
“They know the types of conversations they need to have with potential bidders to get a great turnout and a strong result,” Morello says.
The eventual buyer of this property now has a number of options available to him: he could hold onto the home and rent it out as-is; embark on a cheap and cheerful cosmetic reno to boost the rent, or look at knocking down the existing house and developing the 622m2 block.
“Zoning in that parcel of land is really favourable, because it’s in a growth zone that can have apartments built there, which of course added value to the property,” Morello says.
Regardless of what the new owner chooses to do next, he has a quality asset in his portfolio with plenty of options ahead of him. It goes to show that even in a slowing property market, there is always a ‘diamond in the rough’ to be found!