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.