Owner sells Surry Hills home for $1.47 million after buying in market trough for $812,500

A small Surry Hills terrace bore fruit on Saturday morning when it sold for $1.47 million, procuring its owner $110,000 every year since he bought it nearly six years ago.

It was one of 696 properties scheduled for auction in Sydney on Saturday. The city recorded a clearance rate of 78.3 per cent, with 502 reported results.

Ed Crawford, who flew in from Auckland for the auction, bought the compact two-storey Victorian terrace for $812,500 in 2011 and moved in straight away.

When he swapped Sydney for New York in 2013, and more recently New Zealand, Mr Crawford rented out the two-bedroom property at 35 Lansdowne Street, which sits on just 95 square metres. When he decided to sell it, he left it in the same condition in which he had bought it.

“We did nothing to it, just a lick of paint at the end,” Mr Crawford said.

But that didn’t deter a crowd of about 25 people from braving the rain to squeeze into the property that was touted for its prime inner-city location; just off Crown Street and within walking distance to the CBD.

As everyone huddled together in the home’s small dining area; some watched on from the kitchen while others perched themselves along the steep staircase to catch a glimpse of the action.

After an opening offer of $1.3 million and competition from three active bidders, it soon developed into a scenario Sydneysiders are increasingly familiar with: a two-horse race between an unrelenting investor and a first-home buyer.

When bidding reached the $1.4 million mark, the momentum slowed as the two potential buyers tried to pip each other with smaller $5000 and $10,000 offers.

Within 10 minutes the first-home buyer reached his limit and the investor, a woman from Strathfield, was victorious with a winning bid of $1.47 million — $70,000 over the reserve.

Auctioneer Damien Cooley said though in this case, an investor had prevailed over a first-home buyer, the result was “fair value” for a Surry Hills terrace in that position.

Across the board he noticed a lot of buyers had the money to spend and weren’t holding back, while others were using scare tactics on auction day to give the appearance that they would buy at any cost.

He had also noticed an increase in the number of first-home buyers getting financial help.

He said that although $70,000 over reserve might not seem like much compared to other homes that sold for hundreds of thousands of dollars over reserve, an extra 5 per cent on top of what the owner had hoped for was considerable.

Domain Group chief economist Andrew Wilson said Mr Crawford could not have bought at a better time back in 2011.

“The point is that 2011 was certainly the trough of the cycle. I think we are at the peak of the market, we might even be past it.”

“That’s an 80 per cent increase in nearly six years, or about a 15 per cent increase a year.”

Dr Wilson said the city’s weekend auction market had faded “a little on a wet and Mardi Gras distracted Saturday, but conditions remain clearly positive for sellers”.

The result highlighted the constant demand for Sydney’s inner city homes, but Dr Wilson said he expected to start seeing a limit on the capacity of what people were able to pay.

“Yes, we have a hot market in terms of clearance rates, but I don’t think we’ve got a hot market in terms of price growth.”

Mr Crawford, who was prepared to sell the home for $1.35 million, said he had been drawn to the home’s convenient position; just off Crown Street and close to the CBD.

“I always like to live in areas that are within walking distance to work with plenty of cafes and bars around. I’m not into suburbia,” he said.

“The sale of the house here was one of the conditions for me buying a place in Auckland.”

Across town Sydney’s lower north shore recorded its highest auction result this year with the sale of 3A Warung Street in McMahons Point for $9.38 million.

Two interested parties vied for the home, with views of the Sydney Harbour Bridge and Opera House, until bidding stalled at $9.1 million. It sold after the auction to a couple downsizing from Hurstville.

This compares to Mosman’s highest-ever auction result of $11.95 million, set in October last year.

“We issued nine contracts during the campaign. We expected four bidders but there ended up being just two along with a crowd of close to 100 people,” said Nigel Mukhi, of McGrath Neutral Bay, who sold the property with Peter Shiplee.

“The position is so tightly held, it really was a once in a lifetime opportunity.”

The sale of the five-bedroom, three-bathroom home was well above the suburb’s median of $2.305 million and more than double the highest sale of $4.25 million recorded in McMahons Point last year.