Coogee unit sale soured by land tax

When an eastern beaches unit sold under the hammer for $1.78 million on Saturday, it exceeded the seller’s expectations by more than $100,000 – but he “wouldn’t buy the property again”.

The single-level, three-bedroom unit at 4/22 Battery Street Coogee sold more than $200,000 over the reserve price of $1.56 million.   

The apartment was one of about 580 homes scheduled for auction on Saturday. By early evening, Domain Group had collected 396 results and put the clearance rate at 76.3 per cent.

Domain Group’s chief economist, Dr Andrew Wilson said it was a healthy result. “It’s encouraging for those sellers facing Super Saturday next weekend,” he said.

Ian Macdonald bought the apartment with his wife as an investment in 1991, paying $305,000.

Over the past 25 years the property’s value climbed $1,475,000 more than the price they paid. Mr Macdonald, however, said fortune favoured occupiers only and the area wasn’t the best choice for an investment.

“We rented it out the whole time but the land value here for a unit is $1 million, so we paid $400 a week in land tax, which comes out of whatever rental income you get,” he said.

“So it is not bad but it would have been better to put it in the bank and leave it.”

The Cronulla-based engineer will not purchase a residential investment again but said he will buy into commercial real estate instead.

Among the 10 registered bidders on Saturday was a mix of owner-occupiers and investors, in various stages of downsizing or hoping to enter the Sydney market.

Competition was fierce with three bidders raising their cards, one almost immediately after another. Bids flew in $20,000 increments before a speedy volley of $5000 calls.

Selling agent Grant Ashby of Sydney Cove Property said it was the beachside location that attracted buyers throughout the campaign.

“It does make sense if you want to have something by the beach of your own, to get in now and live in it later,” he said.

That is exactly what the new owners have planned.   

The young expatriate couple who live in Hong Kong will rent the property for the foreseeable future before making it their home when they return to live in Australia.

The pet-friendly unit is on a single level with small side and rear gardens, and views over the ocean and Coogee Beach.

It is surrounded by undeveloped land owned by the University of New South Wales.

For Sale signs are a common sight around the suburb, with at least two auctions in nearby streets scheduled for the weekend.

“We have seen massive growth over the past 18 months [in the area] and things are selling well. While cash remains cheap these properties should remain in favour,” Mr Ashby said.