“We had this property on the market for two and a half weeks and our initial price guide was $1.5 million and our buyer feedback was construction costs are too expensive, the house is in such a bad state, it’s not worth $1.5 million,” Tsavalas said.
“We were making it quite clear it was a deceased estate, it had to be sold at auction, it had to trade, and I think buyers are very critical of vendor motivation. So if it’s an investment property, or they are looking to upsize or downsize and haven’t bought yet, buyers are a bit more sceptical. But when the motivation is there like a deceased estate, if a property is priced right, buyers will bite.”
The home, which was in disrepair, needed significant renovations that could cost from $250,000 (for a quick tidy up) to $1.5 million (to add a garage, a studio and change its layout), he said.
“The balcony needs to be replaced, the roof needs attention, there was water ingress in the brickwork, it needed urgent attention. It was left to deteriorate,” Tsavalas said.
He also said it needed subfloor ventilation, gutters, down pipes and waterproofing injections to fix rising damp and water damage.
“The buyers who are buying it are buying it with the intention of raising their children. What it’s worth in two or three years is irrelevant. Whoever plays the long game in real estate in Sydney wins.”
It was one of 447 auctions scheduled in Sydney on Saturday. By evening, Domain Group recorded a preliminary clearance rate of 56.6 per cent from 281 reported results, while 80 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.
The sale bucked July auction trends in Sydney, where a little more than half of properties sold under the hammer, a quarter were withdrawn and about another quarter sold prior. The city has the largest proportion of sold prior and withdrawn auctions of the capitals, Domain’s July Auction Report revealed.
Sydney also posted an annual drop in auction house prices for the first time since September 2019, falling 2.5 per cent to $1,662,000 in the year to July. The monthly change was -7.7 per cent.
Meanwhile in Ultimo, nine buyers registered to bid on a four-bedroom terrace at 20 Henry Avenue, which originally had a price guide of $1.7 million and had the same reserve price, although the guide was later adjusted to $1.5 million.
The auction opened at $1.5 million and rose in varying increments as four of the buyers placed bids. The competition halved at $1.7 million when two bidders fought it out until it sold for $1.84 million to a Brisbane father who has children in boarding school in Sydney.
Selling agent Matthew Carvalho of Ray White Surry Hills, Alexandria, Glebe and Erskineville said the home had very little interest during most of the campaign.
“We had a buyers guide of $1.7 million and we had very little traffic through the home. We pushed the auction out a week and reduced the guide to $1.5 million,” Carvalho said.
“I didn’t think it would get that high, when we initially had hopes of that level, but the market was there. We had to take a step back to get two steps forward.”
He said that buyers ultimately needed to see value and social proof at auctions as there was a fear of overpaying.
“The big thing at the moment is there is reduced supply. Buyers who thought they would be spoilt for choice are no longer going to be.”
In Longueville, one of the last waterfront homes that has yet to be redeveloped sold for $9.16 million to a family upgrading from the upper north shore.
Fourteen buyers registered to bid on 11a Norfolk Road, a four-bedroom house on 1382 square metres with its own private jetty and slipway.
The auction opened bang on the price guide of $7 million, rising in $200,000 and $100,000 bids before slowing down to $50,000 and $20,000 as five buyers participated.
The home eventually sold for $9.16 million, surpassing the $7.5 million reserve.
It sold through Kerrie Robertson and Stewart Kirkby of LJ Hooker Lane Cove.
In Chiswick, a two-bedroom, two-bathroom unit at 42/54a Blackwall Point Road passed in on a vendor’s bid of $940,000.
Two parties – a first-home buyer and an investor – registered to bid on the property, which was guided at $900,000 and opened at $880,000.
Selling agent Mario Carbone of Ray White Drummoyne said the vendor was motivated to sell.
It last traded for $655,000 in 2009, records show. Chiswick’s unit median jumped 8.4 per cent to $1.03 million in the year to June on Domain data.