Sydney blank canvasses defy expectations, especially when they have water views

“Blank-canvas” properties with redevelopment or renovation potential are defying expectations in Sydney’s in-demand suburbs, especially when they offer water views.

At the weekend, the city’s auction market produced several tearaway results with one mid-century home high on a hill in Waverton exceeding its reserve by $790,000 before selling under the hammer for $3,165,000.

Tom Scarpignato, of Belle Property Neutral Bay, said the two-bedroom property on 400 square metres in 12 Tunks Street had 10 registered bidders, six of whom were active at the auction.

The sale kicked off on a bid of $2.1 million and sped past the $2,375,000 reserve, with the bid increments then easing from $25,000 to $10,000 and $5000 lots before the house sold for $3,165,000.

“The buyers are a young family upsizing from Artarmon,” Scarpignato said.

“This result demonstrates the popularity of Waverton and the strong demand for rare freestanding homes with level access.”

In Woolwich, a dated four-bedroom home at 82 Woolwich Road with views of the Lane Cove River and the Longueville peninsula, rocketed about $400,000 above reserve.

Buyer agent Rodney McLoughlin, of TBAS, said the 693-square-metre property was quoted in the high-$2 million range and drew six registered and four active bidders.

The listing was marketed by Harbourline as a blank canvas for a “dream home” with photographs illustrating the likely views from a potential second storey.

Its auction drew about 60 onlookers. “It was a really good auction, and a good price,” said McLoughlin, who was one of the bidders, unsuccessfully offering $3.5 million for the home on behalf of a Sydney family.

“The agent called the property on the market at around $3,150,000 or $3.2 million, so it was at least $400,000 over the reserve.”

He said the property was in an excellent street overlooking a waterfront reserve, was near shops and had ticked the boxes for several buyers.

Sydney’s weekend auction clearance rate was above 60 per cent for the second week in a row. Domain Group data revealed an auction disposal rate of 64.5 per cent from 320 reported auctions (a total of 587 auctions were scheduled this weekend).

But, some economists are warning that the improvement in clearance rates since early February is only a seasonal adjustment and the market is likely to remain a hard slog, especially for sellers of second-tier properties.

AMP Capital chief economist Shane Oliver said auction data from the past six years showed the February had historically seen a bounce from whatever level the clearance rate was in December.

“In Sydney, the bounce is around 10 percentage points and in Melbourne it is around 5 or 6 per cent, comparing averages for the two months,” he said.

“The bounce in both cities is primarily seasonal, and the more the market has come down in December the bigger the bounce you can get.”

Dr Oliver also suspects some sellers of Sydney homes in February were owners who originally listed last year with bullish price expectations, but in the New Year adopted more realistic prices.

“That has helped the clearance rate go up,” he said.

Undoubtedly, the clearance rate is taking a beating when agents report their “straggler” results. Last weekend’s preliminary clearance rate of 61.3 per cent from an initially reported 348 results was revised down by Domain during the week to 52.1 per cent from the 481 final results.

While the market is one of ups and downs for greater Sydney, it’s less so in the city’s prized inner pockets.

Bondi Beach transactions, for example, are noticeably upbeat, even when a property is in poor condition.

At an in-room auction at the Domain Auction Centre, Double Bay, last week an almost uninhabitable three-bedroom semi, at 14 Chambers Avenue punched above its weight when four keen buyers locked horns.

Wiesner Property gave the deceased estate a guide price of $1.9 million. But the house, on 231 square metres, did better, selling under the hammer for $2.15 million.

Selling agent Jeremy Wiesner said the home mainly had interest from young families, who wanted to add a second storey or live in it as is after a tidy-up.

Investors had also seen value in spending $50,000 on a basic upgrade and then renting out the house, either permanently or as an Airbnb-style rental.

“The fact that the property is in original condition and needs a lot work scared a few people off, but not too many,” Wiesner said.

“People still want to create and design their own property as opposed to buying something half-done and then they still have to renovate. It is nicer to start at the beginning than at the halfway point.”

He said Sydney’s beach areas held their value. “I have been selling in the beaches for a long time, and when there is a slight drop in prices, it is always relative. There is only one Bondi and there is always going to be an attraction to that.”

Other upbeat sales included 14 Stanbury Street, Gladesville, a three-bedroom house in largely original condition on a 613-square-metre block with direct rear access to Peel Park.

This property sold under the hammer for $1,545,500 against a reserve of $1.45 million.

Selling agent Belle Property said there were eight registered bidders, three of whom participated.