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Today's quote:

Friday, September 14, 2012

You have to know the past to understand the present (price)

Click on map to enlarge


And here are some past prices to understand just what a bargain "Riverbend" is at $2 million:

# 1 Sproxton Lane 1,565 square metres
sold as a vacant block in March 2006 for $605,000

# 3 Sproxton Lane 1,682 square metres
sold in February 2007 for 800,000

# 5 Sproxton Lane 1,771 square metres
sold in February 2012 for $1,200,000

# 7 Sproxton Lane 1,821 square metres
sold in June 1996 for $290,000

# 9 Sproxton Lane 1,883 square metres
sold in October 2010 for $970,000

# 11 Sproxton Lane 1,872 square metres
sold in May 1997 for $220,000

# 13 & 15 Sproxton Lane (double-block)
still held by the original owners

# 17 Sproxton Lane
still held by the original owners

# 19 Sproxton Lane 1,770 square metres
sold in April 2006 for $925,000

# 21 Sproxton Lane 1,897 square metres
sold in December 2010 for $900,000

# 23 Sproxton Lane 1,770 square metres
sold in January 1997 for $330,000
currently on sale at $1.2 million

# 25 Sproxton Lane 1,745 square metres
sold as a vacant block in March 2006 for $750,000

# 27 Sproxton Lane 1,760 square metres
sold as a vacant block in March 2007 for $705,000
then had modern house built on it and was until
recently on sale at $1.990 million

# 29 Sproxton Lane
still held by the original owners

# 31 Sproxton Lane 1,720 square metres
sold as a vacant block in January 2012 for $750,000
to the owner of # 33 Sproxton Lane

# 33 Sproxton Lane 1,695 square metres
sold in June 2011 for $950,000

# 35-39 Sproxton Lane, known as "Riverbend"
approx. 30,000 square metres (more than 7 acres),
for sale at $2,000,000


I have had "Riverbend" listed for sale with two agents in the Bay for some time. The last time I saw them was when they drove off with the signed listing agreement. "Perhaps it's time I tried another agent", I thought to myself as I eeny-meeny-miny-moed through the list of local agents.

Well, I've just had a visit from one of them. Expensive car, gold watch, winning smile, firm handshake - all the usual stuff - but I was ready with LIAR, my Language Interpreter for Agents in Real Estate.

As the agent began to explain, "Of course, we will require an exclusive sales agreement", LIAR beamed back at me, "Of course, once we've got you all stitched up and nobody else can sell your property, not even you yourself, we'll just sit back and wait until a buyer turns up."


When he added, "I've been in real estate for a very long time and have a wealth of experience." LIAR simply winked at me and translated, "Not having any other skills or professional qualifications, I've been driving people all over the countryside to look at real estate for longer than I care to remember".

But LIAR really went into overdrive when he continued, "I don't want to waste your time and want to be completely honest with you: I don't think your price of $2 million is realistic".

LIAR churned and spluttered and almost gagged on the words 'completely honest' but eventually came back with, "I don't want you to waste my time: I want to make a quick commission on this one; so drop your price low enough for the property to sell itself."

"So what do you think it's worth?" I managed to croak.

"Well, the prevailing price range in the lane is around one million. Would a prospective buyer be prepared to pay an extra million for the extra seven acres? I don't think so!" pronounced "God", the agent.

"Amen", I muttered (isn't that what you say after God has made one of his infallible pronouncements?)

LIAR had already stopped chucking and churning and gone up in smoke. Even I experienced one of those Diderot 'l'esprit d'escalier' moments which had left me speechless.

As his expensive car headed out the driveway, I thought of all the things I should have said:

That last year a small wooden shack plus the adjoining vacant block - # 31 & 33 Sproxton Lane - , total land area 3,415 square metres, sold for $1.7 million

That the most recent sale in February this year (long after the end of the boom!) of a very ordinary house on just 1,771 square metres - # 5 Sproxton Lane - was at 1.2 million.

That Riverbend's large two-storey full-brick house and guest cottage and workshop and library and utility shed would easily command a large premium over the recently achieved sales price of $1.2 million and also $1.7 million, even without the extra seven acres of land which is large enough for a man and his loving wife to have a stimulating argument at the top of their lungs without invading the nervous systems of surrounding neighbours.

That Riverbend, because of its size, location and substantial improvements, has always sold at more than double the price of any other waterfront property in the lane.

That waterfront properties in the lane had increased in price four- and fivefold since 1993 when I bought Riverbend (# 33 increased almost eightfold!). Riverbend had then been marketed at $500,000. What do you get when you multiply $500,000 by four?