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Property prices tipped to soar as $1 million one-bedder with no car park 'breaks barrier'

Home prices are expected to continue to rise across the country, with Sydney units forecast to rise up to 6 per cent this financial year.

Sydney apartment
The Darlington apartment was sold to an expat who was buying it for his son to live in. (Source: The Agency)

A one-bedroom apartment in Sydney’s inner-south has sold for nearly $1 million after being passed in at auction. As property prices skyrocket in the pricey capital, the selling agent said the eye-watering sale was a sign of things to come.

The apartment, which is located at 29 Lander Street, Darlington, is located in a development of just 15 units. It spans 69 square metres - which is more generous than the average one-bedder - but has no car park.

Selling agent Brad Gillespie, from The Agency Eastern Suburbs, said the terrace-style home was sold to an expat who was buying it for his son who studies at the nearby Sydney University.

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“He’ll use it as accommodation and ultimately, when he’s finished and moves on, they’ll retain it as an investment,” Gillespie told The Australian Financial Review.

Gillespie said the property had a $1 million price guide, based on how desirable the development was. It went to auction with a reserve of $1,030,000 and ended up having just one registered bidder who eventually snapped it up for $995,000.

“We had a lack of interest, at nearly $1 million and no car park. We were limited with inquiries,” Gillespie said.

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Sydney apartment
The terrace-style apartment is one of 15 in the development. (Source: Australian Financial Review)

Despite this, Gillespie reckons the sale isn’t a once-off. In fact, he thinks we will see another similar sale in the coming weeks, to a month.

“Like when we sell a house, and it breaks through a certain barrier, once we start getting $1 million for a one-bedroom apartment, we’ll start seeing more of that,” he said.

Home prices are expected to continue to rise across Australia, with Domain expecting most capital cities to reach new record highs for both houses and units by the end of the financial year.

Sydney apartment
The property is 69 square metres, which is more generous than the average one bedroom apartment. (Source: The Agency)

Sydney unit prices are forecast to increase to a new record of $838,000 to $855,000 by the end of the year, up 6 per cent. House prices are expected to hit a new record of $1.73 to $1.76 million, a rise of 8 per cent.

Population growth, construction challenges and increased borrowing power will be the key drivers behind the price growth, the report found.

The Australian population surged 650,000 last year driven by strong migration, while home building has struggled to keep up.

Sydney apartment
It has just one bedroom, pictured here. (Source: The Agency)

Having a car park can add significant value to a property, with recent sales showing just how precious a garage space can be.

A one-car garage in Sydney’s Woollahra recently sold for a staggering $500,000. The "rare" garage was on its own separate title so could be sold separately to the property it was attached to. Meanwhile, another Bondi homeowner was offered $1 million for their lock-up garage in earlier this year.

The Agency real estate agent Ben Collier told Yahoo Finance a parking spot added a minimum of 10 to 12 per cent to a property's overall value per space.

“It’s more on a percentage basis,” Collier said. “[The Woollahra seller] would have taken a view that if his property is worth $5 or $6 million, the car park reflects the value add to his house.”

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