Developers proved shy at CBRE's latest portfolio auction, buying none of the seven properties under the hammer, despite bidding on all but one.
CBRE national director Mark Wizel said he tried something new with the auctions, but the market "had spoken".
"Putting yourself out there and trying something new always comes with an element of risk," Mr Wizel said. "We had bidding on six out of the seven properties, but clearly, on the day, the buyers willing to transact there and then had different ideas on pricing."
Bidding petered out about 20 per cent lower than the reserves nominated by vendors, he said.
Despite the zero clearance rate, the problems were less a straight reflection on the cooling state of the market than with the selling platform itself.
Last month just two of four properties for sale at another CBRE portfolio auction sold. Investment properties, with strong income streams, have been much more popular, although portfolio auction specialists Burgess Rawson recorded a slim 43 per cent clearance rate three weeks ago.
One industry pundit, who declined to be named, said development site deals were complex.
"It's not like selling fruit at the Vic Market. There's a fair bit of work to do," he said.
One property, a 27-unit boarding house on a 3100-square-metre site at 39 Greenridge Avenue in Templestowe, sold before auction for $2.35 million.
But another site at 1579-1541 Malvern Road, Glen Iris - an 885 sq m parcel of land with a permit for 23 apartments over four levels - passed in at $3.46 million, despite bidding from about six parties. It sold later at the mid-$3 million mark.
A second Glen Iris property, at 184-186 Tooronga Road, passed in at $5.3 million despite spirited competition for the 1483 sq m site. It had a permit for 27 units over four floors and a reserve of $6.5 million.
A 1000 sq m office warehouse in the hot South Melbourne zone also passed in, at $5.22 million, after bidding from two parties for the 31-41 Buckhurst Street property.
"The weird thing is, since the failure of the portfolio auction we've sold five sites, either through private sale or expressions of interest, and in the past three weeks we sold 11 sites for nearly $70 million," Mr Wizel said.
Among the recent private transactions, Spacious Development Group paid $8 million for a 5031 sq m site at 26-30 Pryor Street in Eltham. And one of the properties that failed to sell last month, a 720 sq m site at 65 Pakington Street in Kew, sold for $3.25 million, slightly less than its $3.4 million price tag.
"Having worked at the Vic Market selling Akubras and being rejected by 95 out of 100 people that walked past the stall, I am used to dealing with rejection - it's part and parcel with being in sales," Mr Wizel said.
