Buyers shell out top dollar for renovator delights on Melbourne's pre-Cup auction weekend

Melbourne home buyers zeroed in on unpolished gems as 1200 auctions unfolded across city on Saturday.

While there were nearly 300 fewer auctions than the weekend before Derby Day last year, buyers were willing to pay premiums to secure renovator delights and properties with redevelopment possibilities.

On Saturday, the Domain Group registered a clearance rate of 84 per cent from 965 reported auctions. There were 223 unreported results.

“Melbourne recorded a stunning pre-Cup Super Saturday result, with the booming market approaching near-record levels,” Domain group chief economist Andrew Wilson said.

In Middle Park, an owner-occupier paid $5 million on Saturday for a seven-bedroom, seven-bathroom house with “opportunity for redevelopment” at 270 Beaconsfield Parade.

The auction kicked off with a strong opening bid of $4.7 million, and it passed in to a second bidder at $4.75 million, RT Egdar auctioneer Glen Coutinho said.

The older man and the underbidder – a young couple – were keen on the property because of its renovation potential, he said.

The agency had been guiding in the high-$4 millions during the campaign for the corner-site property of about 328 square metres.

In Melbourne’s bayside, a buyer in his 60s paid $170,000 over reserve for an older weatherboard clifftop property at Black Rock, just 40 steps to the beach.

No. 1 Gordon Crescent fetched $2.57 million, with competition from three bidders.

Agent Stephen Wigley of Hodges said the buyer had previously lived on the street and only inspected the house on the day of auction.

Mr Wigley also sold an original California bungalow at 148 South Road, Brighton East, to a couple who were planning to renovate it over time.

He said the sum they paid — $1,485,000, against a reserve of $1.4 million — was an “entry point” into the suburb.

The lack of stock was compelling buyers to settle for DIY properties.

“In trying to get into the market it is the only real choice they have,” Mr Wigley said.

Greville Pabst, head of WBP Property Group, warned that people sometimes underestimated the renovation cost and blew their budget, especially when they were not experienced.

Although shows such as The Block demonstrated how to renovate, there was also a danger of people finding it far more difficult than originally thought, he said.

“The old adage of what people say in real estate is to buy the worst house in the best street, and it’s a cliche,” Mr Pabst said.

In the search for a property with renovation potential, Mr Pabst advised buyers to be mindful of the floor plan, because it could be difficult and expensive to change.

Changes such as plumbing in the kitchen and bathroom could be a costly task, he said.

“If you’re going to retile a bathroom, that can be more difficult if the walls aren’t square,” Mr Pabst said.

Home buyers could also add an alfresco area to extend the kitchen and living space at the rear of the house.