With the market as hot as it is right now, the fact that homes are selling for well above their reserve isn’t all that surprising.
For the last few months, price guides have been about as accurate as a weather app, seemingly throwing out random numbers from the sky. But the surge in popularity for rundown homes—and just how much money buyers are prepared to fork out for them—continues to astonish even the agents who sell them.
The humble “fixer upper” has always garnered interest from first home buyers keen to save money where they can, and the DIY demographic looking to embark on a new project. Yet the recent competition for fixer upper homes has sent prices soaring, diminishing any hopes of saving. What’s more, with COVID forcing Australians to spend more time inside their homes than ever before, the appeal of a one-of-a-kind property with bespoke features has really intensified, with buyers eager to bag a blank canvas to build from. And with international borders still closed, people are spending their unused travel funds on renovations to bring their dream home to life.
Dubbed ‘renovator’s delights’, rundown homes in desperate need of repair have become the darling of Sydney’s property market, with a worse-for-wear property in Ashfield selling for $2 million just last week. Listed as ‘A handyman special’, the three-bedroom, 1-bathroom home in Ashfield was described in its listing as “a large rundown, neglected, yet beautiful federation style bungalow in need of a facelift”, asking potential buyers to “bring your paintbrushes!”
The week before that, a tired and rundown home on Wilson St in Darlington garnered $2,140,000. The 4 bed, 1 bath terrace was described as “the epitome of renovator’s delight” with plenty of potential to be “restored to its former glory or virtually rebuilt to create a designer home of choice providing endless possibilities.”
In March, a dilapidated 5-bedroom home in Glebe sold for $2.99 million, a whopping $790,000 above reserve. Despite extensive roof, wall, and floor damage, 15 bidders registered for the 1880s Victorian era townhouse once home to renowned explorer Sir Douglas Mawson. Agents remarked at the result considering the buyer would have to spend an estimated $1 million on renovations.
A similar scene unfolded on the North Shore, when a 1900’s home on Emmett St in Crows Nest sold for $900,000 over reserve at $3 million, despite needing $1 million worth of work.
On the less dire end of things, a buyer purchased a beautifully styled and presented two-bedroom property in Darlinghurst for $2.7 million despite ‘substantial leaks’ evident at inspection during the summer downpour. That price was just shy of $1 million above its $1.8m asking price.
Over in Bondi, former Bondi Rescue lifesaver Bobby Yaldwyn just sold his completely unrenovated 1930’s semi for a record breaking $6.5 million. The only update the home had received was an added bedroom upstairs over a decade ago.
Combined with the high costs of renovations, these prices are beginning to exceed those for comparable homes that are ready to move into without needing any work done.