A dilapidated house in Sydney’s east has sold at auction for $800,000 above its reserve price, in yet another example of Australia’s dire property market.
The property on Barker Street, in Kingsford, sold for $2.6 million on Saturday in a busy auction touted by agents as a “must-sell” home in a “blue ribbon” location after its deceased owner did not leave a will.
Wolf Property Group’s Les Salem had set a guide of $1.8 million for the property situated on a 362 square meter block and within walking distance of Royal Randwick Racecourse or the Australian Golf Club and a short bus ride to Coogee Beach.
“I can’t believe it, all the comments were $1.75 million,” Mr. Salem said. The Daily Telegraph.
There were two interested parties who clashed in the auction once the price surpassed $1.35 million.
One was a young professional couple who wanted to give it a much-needed renovation and live in it.
The other buyer, who was the successful bidder, is interested in knocking it down and acquiring neighboring properties to build a student apartment complex for the nearby University of New South Wales.
Photos of the property show peeling paint from the walls, mold on the ceiling, uneven floors and missing sections of tile in the dated kitchen and bathrooms.
This dilapidated property (pictured) in Sydney’s east sold for $2.6 million at the weekend.
The house has uneven floors, peeling paint, missing tiles and part of the roof has collapsed.
In a similar auction also on Saturday, a deceased property on The Boulevard in Strathfield sold for $600,000 above reserve.
The three-level property that previously housed a doctor’s office on the ground floor and a residence upstairs sold for $3.51 million.
Ben Horwood of Horwood Nolan said in the last six months the market had shifted from newly renovated homes in demand to buyers looking for dilapidated properties they could renovate.
Earlier this year it was revealed that Sydney was the second least affordable city in the world to buy a home, behind Hong Kong.
Demographia International’s housing affordability report for 2023 said house prices in Sydney had increased six times the rate of inflation.
Mortgage arrears for Australian homeowners have reached their highest level in three years, as homebuyers have committed to huge mortgages in an effort to climb the property ladder.
The information comes from new CoreLogic figures published last week which revealed that arrears reached 1.6 per cent in the March 2024 quarter.
This figure is the highest since the first three months of 2021.
The property was an auction from a deceased estate and the previous owner left no will.
The listing agent said the home had an appraisal of $1.8 million but sold for $800,000 more than that in another indicator of the red-hot real estate market.
The average variable interest rate on outstanding owner-occupier mortgage loans increased from 2.86 percent in April 2022 to 6.39 percent in March 2024.
Tim Lawless, Director of CoreLogic said the end is not in sight for Australians struggling to meet their mortgage payments.
“Mortgage arrears are likely to rise further as unemployment rises, household savings are further depleted and, more generally, economic conditions go through a period of weakness,” he said in the report.
“However, arrears are unlikely to experience a material ‘explosion’ unless labor markets weaken substantially more than expected.”
Rising rates have added nearly $1,600 in monthly payments for the average borrower with $750,000 in debt.
