Long-term readers of my blog, all three of you, will no doubt remember the posts I wrote about the concept of Geoarbitrage, the first one explaining the concept, while the second one talks about how the Frogdancer family tweaked that concept to suit our situation. Well, when I say ‘family’, I really mean me. I’ve run this house as a benevolent dictatorship for the last 21 years, so once I made the decision the boys had to go along with me. Part of the perks of being single.
Geoarbitrage: all the cool kids are doing it #1. Talks about what ‘geoarbitrage’ is and how it’s slightly different in the southern hemisphere.
Geoarbitrage: all the cool kids are doing it #2. How I took the information in #1 and acted on it to find The Best House In Melbourne.
Time’s gone by and yesterday was the auction of the right-hand-side townhouse. These were the ones that the property developer and I had designed, so I was incredibly keen to see what this one, (the larger one), went for.
(Behind the wall containing the ovens is a butler’s pantry. I suggested that the architect put one in. I’d love one, but this is the closest I’ll ever get to owning one!)
Here’s the web page for the property, for those unfamiliar with the Australian/Melbourne housing market. It runs through the stats and shows photos and the plan. I know I always like to have a look through and I thought you might like it too.
A bit of background – I sold this property with my original house on it + the fully approved plans for these townhouses, in mid-2017 for 1.7 million dollars. It seemed like a hugely inflated price to me, but seeing as I wasn’t the one paying for it, I took it and ran.
Turns out that I sold at the peak of the market. ‘Fortunate Frogdancer’ strikes again! Since then the property market in Melbourne and Sydney has softened by around 8%, particularly after the government brought in laws restricting overseas buyers from purchasing property. Apparently, too many off-shore Chinese buyers were ‘land banking’ here, pushing prices up and making it harder for first home buyers to get into the market.
These townhouses were designed for multi-generational family living with the Chinese market in mind, as many families bring the grandparents over for 6 months at a time. Hence each house has 2 main bedroom areas. Heck, we even had the plans feng shuied!
So I went to the auction with intense interest. Did I make the right decision to sell before the build, or would I have been better off to suffer through the process of building, (and the extra 15 months of bridging finance at 3K/month) to sell at auction?
It’s not often you get to have a ‘sliding doors’ moment, where you get to see what would have happened had you made a different decision. How lucky am I?
I got there just as the auction was starting. I thought I’d have to park a couple of streets away, but no. I got a park right around the corner. When I walked onto my old street, there were very few people there. Not even many neighbours, which surprised me.
The auction started. No one raised their hand. The auctioneer kept talking, then after a minute or two, he put in a vendor bid of 1.525 million. (A vendor bid is when the owners of the property put in a bid to get an auction started. It has to be declared openly by the auctioneer.)
No one put up their hand. The auctioneer went in to confer with the owners. I was standing with my previous next-door neighbour and he said, “The trouble is, in a market like this anyone who’s selling HAS to sell, because why would you put something on the market now when prices are falling? The buyers know this and they’re looking for bargains.”
The townhouse was passed in at 1.525 million dollars. No doubt over the next week or two it’ll sell in private negotiations, but by gum! I’m so thankful I sold when I did. Imagine the stress?
I hope that the builders end up making a decent profit. They’ve done a great job – the house looks amazing. But I can’t help feeling relieved. Frogdancer Jones read up about finances, investing and FIRE for 4 years before making an educated, yet still risky, move to secure the finances of her family.
Looks like she made the right decision.
(The backyard is as deep as my chicken run used to be. I feel sorry for any little kids who’ll move in. The entire building is literally 5 times the size of my little weatherboard house that used to stand here. The whole suburb is morphing into properties like this one.)
I’ll keep you posted when I find out what it eventually sells for.
I still liked your little house!
Definitely the right move in my mind. Money in your hand is worth twice that of a property auction after a new build further down the line. Never mind property prices tanking, I wouldn’t want to put up with dealing with a builder and all the associated problems that inevitably get thrown up. I’ve watched too many DIY property programmes!
Yes. After I sold I was watching “The Block’ and whenever anything went wrong I’d be so pleased I wasn’t doing the build. ________________________________
Three regular readers. Ha! I’m sure you have more than that. Know that I always read, even if I don’t always have a chance to reply (and even if it takes me two weeks to get a chance to read your post!)
Thanks for the link to the listing. I love following real estate. I still keep an eye on the town we last lived in, and have been following our current town for 5 years now. That came in handy when we made a quick decision to buy last year after four years of renting (and three rentals!) I saw our (current) place pop up, had an idea of the market/pricing, how rarely something I didn’t mind came up, how lucky the location was, etc. It was listed Wednesday, I called immediately for a viewing. They had to give 24 hours notice to the tenants (children of the owner). We viewed on Friday afternoon, put in an offer that evening, and it was accepted the next morning. No one else saw the property. My husband wonders if we could have haggled and saved a few thousand, but I was happy with the price and didn’t want to risk missing it. In my previous 4 years of looking I’d seen only three other houses I was properly interested in.
I’m so glad that in the end you are happy with your decision. It feels so nice to have something work out like that. Please keep us updated with the sale.
I can let you know that as of this morning, the vendors dropped the asking price by 50K… ________________________________