They’re blocked off with danger tape, the floors are caving in and years of roof leaks have eaten the walls – but many of Sydney’s worst homes have become hot property since interest rates were cut in February.
Multiple homes requiring hundreds of thousands of dollars in repairs just to make them inhabitable have sold for huge prices, with agents revealing buyer competition has shot back up to boom levels.
It’s followed a wider resurgence in the housing market, with PropTrack data revealing last month’s rate cut drove the biggest monthly increase in Sydney prices in nearly a year.
The 0.5 per cent monthly rise in prices also broke a six-month streak of weaker housing market conditions that had seen Sydney’s median home price freeze over spring and fall over December and January.
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Sydney homes unfit for habituation have been selling for millions.
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Among the rundown homes to change hands since the interest rate cut was a Paddington terrace described by the agent as “the worst” she had seen in many years. It sold at auction for $2.8m – $700,000 above reserve.
The veteran agent Georgia Cleary estimated the Liverpool St terrace would require at least $600,000 in repairs after being left vacant since 2009.
Untended roof leaks had destroyed much of the home, stripping the walls and turning the rooms into a factory for mould.
Despite the issues, the auction attracted 22 registered bidders. An average auction has three to four.
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This Paddington home sold for $2.8m – $800,000 over reserve.
A different Paddington home, this time on Liverpool St, sold a week earlier – also for $2.8m and $700,000 over reserve. Picture: Julian Andrews
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Another grimy Paddington terrace – this time with boards of wood on the floors to cover the rotting timbers – sold at auction on March 8 for $2.8m, $800,000 over reserve. There were 17 bidders.
In February, a derelict Woollahra terrace once owned by a hoarder sold for $2.45m, $600,000 over reserve. There were 24 bidders. The agent revealed the damaged home was full of “feral” junk for two years.
Other sales for rundown homes include a Lilyfield home snapped up for $2.5m, a Redfern hoarder house for $1.35m and original condition Bronte home sold for $3,825,000 – $725,000 over reserve.
This Woollahra home sold for $2.45m. Picture: Thomas Lisson
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Agents behind the sales said the bidders registering for the auctions were a mix of builders, experienced renovators and couples hoping to sink their teeth into their first project.
Renovation queen Cherie Barber, who has done more than 200 projects, said it was “insanity” for novice investors to be attempting some of these home makeovers.
“Renovating has always been in the Australian blood but people are getting more obsessed about it,” she said.
“They see shows like The Block and feel motivated to do their own project, thinking an uglier home means more profit. That’s a mistake. More items to fix means a lot more can go wrong and the costs are high.”
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This Bondi Junction came up for sale on Friday. No guide has been released but it is listed among homes with expectations of about $2m-$2.5m.
The interior of the Bondi Junction home.
Ms Barber said TV renovation shows had encouraged a perception of the process that didn’t’ match reality.
“What everyone sees on those shows is the befores, the afters and the dramas and conflicts in between. That’s what makes good TV. The real process involves a lot more due diligence,” she said.
“Its absolute stupidity for someone with no knowledge or construction experience, no understanding of building codes, to take these on … knowing what the cost of these projects will be is complex.
“We often find people will instead just pluck a figure out of thin air and assume they can finish a project with that. They’ll say ‘Our budget is $500,000, that’ll do it’. But they don’t really know.”
The bathroom of a Redfern terrace recently sold for $1.35m.
The Redfern house had been occupied by a hoarder and $10,000 had to be spent to remove items from the home.
Adrian Tsavalas, the director of inner west real estate group Adrian William, said fixer uppers were becoming rarer within popular inner suburbs and buyers often had to fight bidding wars to get them.
That competition has intensified following the rate cut, which was the signal many buyers had be waiting for before making a purchase, he said.
“Some of the buyers will be builders who make livelihood doing this, but there are also buyers who aren’t buyers who have a particular idea of how they want their home.
“They don’t want something partially renovated. Buying something original or derelict means they can create the home they want.
Renovation queen Cherie Barber said it was “absolute stupidity” for some renovators to attempt these projects.
“We are now in an Instagram age. You get a number of people who are really particular about a home aesthetic off the back of social media and reality TV. Designer living has filtered to the masses.”
