A rotting, uninhabitable three-bedroom shack in Sydney’s inner west has sold for $2.41 million as house prices continue to rise across the country.
On Saturday, the Enfield home, which requires more than $500,000 in repairs to be habitable, sold to 300 people, with 25 registered bidders.
Agent Matthew Blackmore of Richards Matthews Real Estate said he did not expect the property to fetch more than $2 million as it needed a lot of work to make it habitable.
“It’s probably the craziest auction I’ve ever seen in real estate,” he said.
He said there were “endless possibilities” for the next owner of the 570-square-metre plot.
“There are holes in the ceiling, the floor is made of very old wood and you have to be careful where you walk,” he said before the auction.
But Mr Blackmore said the significant damage had not deterred any of the bidders.
“Some of the people who called to ask me about the house told me they had seen the house many times and had always thought they would buy it if it came on the market,” he said.
A rotting wooden house in Enfield, in Sydney’s central west, is not exactly what springs to mind when you imagine a $2.5 million property in the city.
Listing agent Matthew Blackmore said there are holes in the ceiling, the floor is very old wood and you have to be careful where you walk.
Mr Blackmore said the house was located on The Parade, Enfield’s prime street, and because the area was mainly made up of established homes, there was not much land value opportunity for buyers.
Mr Blackmore also sold a house across the street that was priced $200,000 over the reserve price, but it was a two-brick habitable home and the buyers moved right in.
“For a house you can’t move into to sell for hundreds of thousands of dollars less is crazy,” he said.
Some people at the auction had hoped to get the house for the bargain price of $1.5 million, but Blackmore said about half the bidders were bidding more than $2 million.
It is understood that most of those interested wanted to knock it down and rebuild a house, which would likely be worth $3.9 million given the location.
With no supply in the current market, Mr Blackmore did not expect property prices to drop anytime soon.
“If there were 10 more houses like this one, they would be sold tomorrow,” he said.
“Good land in good suburbs sells very well.”
The median cost of a home in Australia rose by $59,000 to $794,000 in 12 months, according to CoreLogic’s July report.
It is understood that most of those interested wanted to knock it down and rebuild a house, which would probably be worth $3.9 million.
Continued growth since February means average home prices are expected to rise eight percent in fiscal year 2023-2024.
Home sales also showed a strong recovery with an 8.6 per cent increase on year-end figures, with Perth recording a record 29 per cent increase in sales over its five-year average.
CoreLogic research director Tim Lawless said the national index had “found its groove,” rising between 0.5 percent and 0.8 percent month-on-month since February.
“The continued growth is taking place despite a number of downside risks, including high interest rates, cost-of-living pressures, affordability challenges and tight credit policy,” he said.
However, a chronic housing shortage across much of the country continues to impact first-time homebuyers, with housing supply stagnating in most states.