Downsizer's expensive gamble pays off after buying unit next door for $2.68 million with plans for mega apartment

A man who took a punt buying a harbourside apartment with hopes the neighbouring unit would soon become available was rewarded at auction on Saturday.

The downsizer bought one half of his ideal home – 30/17 Raglan Street – in May for $2.1 million after it hit the market for the first time in 46 years. He then waited until the unit next door came on the market so he could knock down the adjoining wall and create a “mega” apartment with 360-degree water views.

For such a tightly-held block, it was a risky move. “No one moves out of that building,” said Peter Kelaher, of PK Property Group buyer’s agency, who was bidding on behalf of the new owner. 

But they’d also heard the 96-year-old neighbour, who had owned No.29 for 34 years, would soon sell. 

On Saturday the grand plan came to fruition when Kelaher, who was taking instructions over the phone, eventually made the winning bid – $2.68 million – for the two-bedroom unit at 29/17 Raglan Street, Mosman.

The turn out at the auction was strong, with seven other registered bidders, including two investors and predominantly downsizers. A couple from the Blue Mountains started the auction with a $2 million bid.

When the opening bid of $2 million quickly soared to $2.5 million for the near-identical apartment, it wasn’t immediately clear who would come out on top.

“Bidding was aggressive and confident with no lags, [there was] a lot of momentum,”  Province Agents Neutral Bay sales agent Nic Yates said.

In the end, the apartment sold for $570,000 more than its “mirror image” apartment next door.

​”It was the best auction I’ve had for a good year or so … I believe it’s the second-highest price ever paid for a two-bedroom apartment on the lower north shore,” Yates said.

​It lured in potential buyers with eye-line views of Taronga and the Harbour Bridge, as well as level access from the garage and the foyer meaning older buyers wouldn’t have to “deal with a single step”.

While the buyer’s first choice would have been to buy a ready-made apartment that had views, parking, lifts and extra bedrooms, there was little on the market that fit those requirements.

So after spending a total of $4.78 million, the new owner will set about turning the two properties into one.

“You can [turn two apartments into one] in most buildings,” Kelaher said, explaining it required an engineer to determine whether a beam would need to be put in.

According to Yates, when the two apartments are combined, it’ll be even more desirable – and even more expensive – “comfortably” reaching $6.5 million in value due to the size and the “close to 360-degree views” that will be opened up.

“There is a very good chance it’ll be the best apartment in the block when it is done.”

Real Estate Buyers Agents Association of Australia president Rich Harvey said record property prices in Sydney meant the time was ripe for downsizers to use their additional equity to buy their retirement home.

“When downsizers move out of their home it encourages the next generation of families to move in and renovate, prompting a positive ripple effect in the neighbourhood,” Mr Harvey said.

And Property Council of Australia research has found the demand for retirement-appropriate accommodation will double by 2025, which could see more considering this strategy.

Almost two-thirds of 50 to 60-year-olds lived in freestanding houses, a report on ageing from the NSW Department of Family and Community Services found. But in 10 years’ time 27 per cent were interested in relocating to apartments and 14 per cent to semi-detached homes.

About 60 per cent did not want to live in a retirement village until they were “old and frail”. Instead, the majority wanted to stay in their current area for as long as possible, even if they were not in the same property.