Sydney auctions: Young investor splashes $1.26 million on run-down Lewisham house, $310,000 above reserve

A run-down house in Sydney’s inner west was handed from one investor to another despite stiff competition from half a dozen owner-occupiers looking to upgrade from units or buy their first home.

There was barely standing room left in the small courtyard of 16 Old Canterbury Road, Lewisham, as more than 50 people watched the freestanding two-bedroom property sell for $1.26 million.

It was one of 376 auctions held in Sydney on Saturday.

By evening, Domain Group had recorded a 78.2 per cent clearance rate from 265 reported results.

There were 13 registered bidders but a $1 million opening bid by a buyers’ agent knocked out about half the competition as it was listed with a price guide of $950,000 to $1 million.

The offers rose rapidly in $10,000 increments as six buyers vied for the keys to the 234-square-metre block.

It whittled down to a two-horse race with a clear frontrunner emerging and the hammer almost falling at $1,225,000.

But the seventh and final bidder entered the race in $5000 lots, pipping their rival to the post.

It sold for $1.26 million – $310,000 above reserve – to the successful buyer, ending her four-month search for her first investment property.

“I thought the bottom was maybe at the beginning of the year but no one could really see it when it was right in front of you,” the buyer said.

“But I think now’s still as good a time as any.”

Vendor Jan, who did not give her surname, was also pleased with the result for the property she and her husband had owned for 23 years.

They bought it for just $123,000 as it was subject to compulsory acquisition by the government for road widening plans.

“No one wants to buy a house that the government is going to compulsorily take over but we thought that may do no difference to the renting of it,” she said. 

About 10 years later, the government decided not to take over the property, increasing its value, she said.

“So that was what you would call good luck on our part,” Jan said.

Belle Property Annandale selling agent Rhonda Yim was surprised by the result.

“I knew it would be popular but I was thinking someone was going to start low, and that first knockout bid by the buyers’ agent was already on the market,” Ms Yim said. 

“I actually thought when it first hit it wasn’t going to be an easy property to sell – it’s obviously on a busier road and it needed work. But I think Lewisham is becoming a more popular area.”

She thought first-home buyers would be competing hard for the house as the successful buyer was one of the few investors interested.

The lack of stock in the inner west and buyers’ realisation the market had likely bottomed out spurred competition, she said.

Belle Property auctioneer Ricky Briggs expected bidding to start in the $700,000 to $800,000 range, given feedback received in the campaign.

“It’s great to see a little bit of buoyancy back in the marketplace,” Mr Briggs said.

Meanwhile in the upper north shore, an uninhabitable property at 11 Mahratta Avenue, Wahroonga, also drew a big crowd of about 80 people and 10 registered bidders.

The auction opened at $1 million, jumping in $100,000 and $50,000 increments. It continued to rise quickly after hitting the $1.2 million reserve thanks to the seven active parties who vied for the 924-square-metre block.

It sold for $1.6 million to a couple who hoped to build their dream house.

Ray White Upper North Shore director David Walker said the home was “entry-level for Wahroonga” and attracted strong interest for its location and price.

“It attracted people to the area who normally are locked out,” Mr Walker said. 

“The land is normally expensive. We thought maybe there could be a discount because of [the uninhabitable property].”

He said he could feel sentiment had shifted in the air due to low interest rates and a market that had likely bottomed out.

“Buyers are now transacting,” he said.

In the lower north shore, a five-bedroom house at 7 Brereton Street, Gladesville, sold under the hammer for $2,204,000.

Two of the five registered bidders threw their hat in the ring, pushing beyond the opening bid of $2 million in increments of $10,000 for most of the proceedings.

The reserve was $2.1 million and the successful buyers were a local family.

Belle Property Hunters Hill’s Michael Gallina said the home recorded a strong result due to its modern renovations and north-facing backyard.

“The majority of buyers were local or from the Lane Cove area as these buyers are seeing better value in Gladesville,” Mr Gallina said.