Yahoo Finance Dilapidated ‘shack’ selling for $2 million in unbelievable property trend
Rundown Sydney homes are fetching “unthinkable” prices, as the property market continues to run hot.
A rotting and unliveable Sydney home is expected to be snapped up for at least $2 million at auction. A real estate expert said the trend of dilapidated property fetching premium prices is only going to get bigger as prices continue to skyrocket.
The three-bedroom Enfield house currently has holes in the ceiling, rotting timbers at the base of the house, peeling walls and ceilings, and has been sitting vacant for the past 18 months. But this hasn’t scared off potential buyers.
Real estate agent Richards Matthews Real Estate described the house, which sits on a 570 square metre block of land, as offering “endless possibilities” and a “blank canvas” for buyers to renovate, reconstruct or redevelop.
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The average price for a house in the inner west suburb is $1.8 million, according to realestate.com.au data, with prices up 8.1 per cent over the past 12 months.
Selling agent Matthew Blackmore said most interested parties were keen to knock down the original “shack” home and replace it with a new build.
“A new house would probably be worth $3.8 million, $3.9 million,” Blackmore told The Daily Telegraph.
He estimated buyers would need to spend about $1.2 million to $1.5 million to build a house in the area in line with surrounding homes, or half a million to renovate the home.
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Properties sold for ‘unthinkable prices’
It’s not the only rundown Sydney home that has sold for a whopping price in recent weeks. Over the weekend, a falling-down house in Kingsford sold for $2.6 million, $800,000 over the reserve.
Another unliveable unit in the North Shore sold for a staggering $1.1 million at auction, which was $200,000 above its reserve, after having hundreds of people view the property.
George Cherchian from James Chase Buyer’s Advocacy said buyers were snapping up derelict properties for prices that would have been “unthinkable” last year.
“There’s obviously discounts for those properties that are fixer-uppers and that’s where [buyers] are seeing the most opportune type of property for them to enter the market,” Cherchian told Yahoo Finance.
With supply issues continuing, Cherchian expects this property trend will continue for quite some time and it could ultimately “push up the price for these types of properties as well”.
Sydney property prices grew by 0.6 per cent in May to reach a median value of $1,156,020. Prices have skyrocketed by 7.4 per cent over the last year
Stabilising of construction costs is also contributing to the trend, Cherchian added, with the latest Cordell Construction Cost Index finding the annual growth rate was now below the pre-pandemic decade average despite rising 0.8 per cent in the December quarter.
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