With family connections dating back more than 100 years in the Hawthorn area, it is natural that Kay & Burton Director Scott Patterson would end up working and living in Boroondara. His grandfather and great grandfather were both former Mayors of Hawthorn. 

Scott is well known and highly respected in the Boroondara area, where he is manager of the Hawthorn office, building a dynamic team with a focus on the prestige property market.

Image: REIV Master Auctioneer Source: Kay & Burton

As one of 14 Master Auctioneers with REIV, Scott has extensive auction experience, conducting over 3,000 auctions during his 25 years in the industry. In 2008 Scott won the REIV Senior Auctioneering Competition.

WILLIAMS MEDIA spoke to Scott Patterson about the conditions in Melbourne’s inner east property market.

What are your predictions about the 2020 luxury market in your area and your thoughts on 2021?

The luxury market in the core suburbs of Boroondara (Melbourne’s Inner East) is presently in a holding pattern, waiting for a break in the Victorian Government restrictions.  We normally see some of the biggest and best homes in the area come onto the market in Spring when their gardens look magnificent, however this year will be very different unless we resume the ability to take private inspections in mid to late September. 

Image: Family holiday in Queenstown.   Source: Scott Patterson

Stage 4 restrictions have put the brakes on hard for homes in the $3m+ price range as both buyers and sellers patiently wait for the ability to carry out inspections.  2020 might produce a late market leading right up to the Christmas break. Volumes have been less than half of what we would normally see, so the pent up demand is strong and the limited number of luxury homes presently on the market are receiving quite a bit of attention, and spirited competition for the better credentialed ones, but there just isn’t the supply or the confidence at the moment.  2021 can only be better than 2020.  If we see restrictions eased and stability around employment and immigration return, then I predict a rapid rebound right across the board in the Melbourne market and in particular the top end.

What advice you would give to vendors for the best outcome?

Vendors can give themselves the best possible chance of securing a buyer prepared to pay a premium price by taking the advice of the professionals when it comes to presentation of their home.  By investing a sensible amount of money into cosmetic improvements or styling they can make a huge difference to the first impressions a buyer feels when they inspect.  On many occasions I have seen a $50,000 investment make the difference of $200-$300,000 to the final price simply by enticing one or two more buyers into the picture.  Buyers love a home where effort has been made to make it clean and comfortable and ready for them to simply move in and enjoy.  Remember, buyers will emotionally connect with the lifestyle on offer rather than just the bricks and mortar.

Image: Enjoying Port Phillip Bay on a client's boat.   Source: Scott Patterson

What advice do you give buyers?

As a buyer looking to invest in the luxury market I would say that position has to be the number one priority. That will never change.  For example, buying an older home on the north side of the street on the crest of the hill is a much better investment than purchasing a newer home on the south side with a downhill slope.  Orientation is critical for natural light and having a superior position will reduce the chances of overcapitalizing.  

In the area I work in there are some pockets that I call “bullet-proof” real estate.  It wouldn’t matter how much you spent on improvements, it would be virtually impossible to overcapitalize in that location.  Don’t worry about overpaying for this sort of real estate. History tends to repeat itself and when you come to sell the buyers will justify paying a premium for the same reasons you did.

Image: Scott's mint condition 1954 Austin Healey BN1.   Source: Scott Patterson

What are vendors saying?

Vendors are saying “let us know when the next best time to sell is.  I trust you to tell us when the right time to sell is.”  The luxury market is less affected by small change to interest rates.  It is all about supply and demand and that can be influenced by a number of variables both local and global

What are buyers saying?

Buyers are saying “please tell us when you have something suitable coming up in the area we want to be in.”  Buyers in the luxury market are often very specific about where they want to live, right down to the actual street and sometimes the actual house.  I sell a number of what I call “Generational Homes”.  These homes have often been in the same family for 50-60 years, so they genuinely become a once in a lifetime opportunity.  I once sold a very large home in Kew that was built in 1911 and had never changed hands. 

Image: 'Generational' Homes  Source: Kay & Burton

What changes have you noticed in buyers and sellers since the COVID-19 situation?

When COVID-19 started to become a problem in March 2020, I expected the market to come to a complete standstill. However, I have been pleasantly surprised to see continued interest in quality real estate both in the Melbourne Metropolitan area and the Mornington Peninsula where we have offices.  Buyers with the ability to work remotely are now exploring the lifestyle benefits of living on the coast within about one hour of Melbourne.  Buyers have been extremely decisive when a well credentialed property comes up for sale on the peninsula. 

In the city, buyers and sellers are behaving cautiously, but taking a long-term view to real estate investment in Melbourne’s established inner eastern suburbs it’s hard not to form a positive view.

Image: Footy with the boys.   Source: Kay & Burton

Are the buyers changing?

For the past few decades we have relied heavily on foreign investment (mainly from China) to drive our market. We have also seen strong population growth with an average of 2,000 new people per week coming to Melbourne to live permanently.  Given the closing of borders we are likely to see a serious slowdown in these numbers and the local market will be given a chance to step up.  I operate in the middle of the school belt so I am confident that I will continue to see local buyers trading up to position themselves close to certain schools.  

Where do you see demand coming from? 

Demand will come from the local market for the foreseeable future. When restrictions are eased we are expecting to see a flood of expat buyers returning to Melbourne from Hong Kong in particular.  A number of these buyers are already quarantining in Melbourne and Sydney.

Image: Flinders Polo.   Source: Scott Patterson

Are buyers typically looking to buy holiday/lifestyle homes or permanent residential?

There will be demand for permanent residential homes in the inner suburbs close to schools and there will also be demand for holiday/lifestyle homes along the coast and in regional areas.  About one hour from Melbourne will be the preferred distance to commute.

What are your interests outside of real estate?

I love vintage cars and have a 1954 Austin Healey BN1 in mint condition. I am an avid Hawthorn supporter in the AFL. My wife owns a popular homewares store and interiors business in Hawthorn called “Frey”. I am kept busy by my active sons who pull me in different directions and normally I work 6 days a week so there is not much 'spare' time.

Image: "Go the Hawks" Source: Scott Patterson

What do sellers look for when appointing a luxury agent?

Most vendors with luxury homes are business savvy and understand the need for their agent to have a combination of specialization, experience, strategic approach and proven track record.

What is one thing you have learned over your years as a luxury agent?

Over the years, the one thing that I have learnt as a luxury agent is to never judge a book by its cover. It’s an old cliché I know but it is so true. The most unlikely of buyers have turned out to be completely the opposite. With this comes a need to be self-aware and bring to table a high level of emotional intelligence.

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