The market is not consistent. We all know that by now. To highlight the inconsistency, we turn to two sales:

Both were side by side and had identical block sizes of approx 740sqm of land.
39 Alfred Crescent sold in May this year with competition from two bidders going toe to toe at $4,200,000. It was a landmark price and set the benchmark for the area.
All eyes were on the sale of 41 Alfred Crescent a number of weeks ago. Many thought it might make up to $4 Million and beyond, yet it faltered and sold for just $30,000 past its reserve price of $3.5 Million.
Why?
The houses were different. One was a double fronted home that was mostly single story, while the other was a two story terrace with side land. The two story terrace was the lower price of $3,530,000 (41 Alfred Crescent) yet in my opinion, it was almost the preferred option. It managed to obtain great natural light through the side land, allowing those Northern windows to work hard for the property.
So the difference was a whopping 20% difference in price.
What can we attribute this difference to?
1. When a landmark property comes onto the market, it captivates the attention of the suburb. When a second landmark property comes onto the market within a few months of a similar sale, it loses some prestige as a result. In this case, It’s almost like the market shifted from thinking how rare and special the property was, to “another one has come on the market in Alfred Crescent”…
2. The dangers of two buyers slugging it out. 39 Alfred Crescent North Fitzroy had two buyers “slug it out” at auction, pushing past the $3.5 Million reserve and beyond $4 Million. So as soon as you take one of those buyers out of that situation, the system breaks down. 41 Alfred Crescent was a much more market based result. Three separate bidders all took a $10,000 bid over $3.5 Million with the end selling price of $3,530,000 going to a buyer who only bid once – the final one.
3. The inconsistency in the market. The market is proving to be very inconsistent at the moment. These sales help to establish this fact.
If I had the choice between being the owner of 39 or 41 Alfred Crescent – I’d like to be in the position of 41. I’d feel more comfortable that I’d purchased on value. If I owned 39 Alfred, I think I’d be a little worried if I needed to sell in the next few years for any reason, as it might mean absorbing a heavy loss.