…An Auction Win in Kensington… On a Passed-In Bid

This Saturday just gone I headed over to Kensington to bid on a 2BR townhouse for clients of ours who had decided to take advantage of the Labour Day Long weekend. I was bidding under an Authority, meaning I could sign contracts on their behalf should I be successful.

The townhouse is located in Kensington Banks; the old Cattleyard site which was developed between 1980 and 1990 into medium density developments clustered around small parks and walking paths, just 4km from the CBD. Signs of the cattleyards still exist and bluestone cobbled pathways are characteristic to the area.

 

 

The question I had was whether the vendor’s decision to run the auction over the long weekend could be detrimental?

I was assured that the property had a variety of serious bidders on it. I had a budget just slightly over $600,000 and while I didn’t feel flushed with confidence, I also knew that long weekends can bring surprises.

I arrived fifteen minutes before the auction was due to start. Bidders had gathered on the paved bluestone pathway. Some were agitated and moving from foot to foot, reshuffling their paperwork and alternating between hands in pockets versus crossing arms. Others were annoyingly passing children over to their partner and walking around the back of the crowd in an attempt to find a suitable position. One trio were my obvious contenders. A younger buyer with her two friends as support crew.

I stood where I had direct line of sight to her.

Without knowing her situation or bidding strategy I took a guess that she could be a first home buyer. Knowing that the State Government stamp duty concession is available up to $600,000, I took advantage of my investor-position when the bidding commenced. The auctioneer kicked off the auction with a $470,000 Vendor bid (surprising, as the quote range was mid to high fives), and I stepped in to challenge my keen bidder once bidding hit $590,000 in five thousand dollar increments. With a loud declaration of “SIX hundred THOUSAND dollars”, her face fell and I felt bad….for just a second. The auctioneer took his half time break and came out with an energetic plea for further bidding.

The property passed in to me and we headed inside this ideally proportioned townhouse to fight out phase two. The reserve of $630,000 exceeded what I was prepared to pay and a further twenty minutes of negotiations ensured I secured the property for my clients. Based on a recently sold comparable property achieving a rental return of $510pw, my clients can not only look forward to a great yielding asset, but their nest egg just 4km from the CBD should offer them low-maintenance, strong growth and a foot-holding in an exciting suburb poised for some exciting 2030 plans.