Unliveable Redfern cottage sells for $1 million

Despite having broken floorboards, rising damp and termite damage,  a rundown, unliveable Redfern cottage has sold for $1,025,000 –  $75,000 above reserve.

And buyer Tai Phan, a 34-year-old lawyer from Bondi, immediately suffered buyer remorse. ‘‘What have I done?’’ he joked. ‘‘Now that I look back at it, [I have] a bit of remorse.’’

The three-bedroom weatherboard on a tiny 107 square metres of land at 48 Chelsea Street had been left empty for half a decade and was being sold by the Public Trustee. It was built in 1910 by a Redfern bootmaker named William Steward and last traded in 1956 for £435. 

The auction attracted about 200 people, 13 of whom had registered to bid. When bidding passed the $1 million mark, one neighbour in the crowd remarked, ‘‘This is ridiculous.’’

They may have been familiar with the sale of the equally dishevelled property directly behind the house, which sold for $650,000 in 2012. 

But Mr Phan said the market had changed considerably in the past 12 months. ‘‘It is pretty crazy, hey?’’ he said. ‘‘Just before summer it really kicked off and people went a little bit nuts, but I’ve found something now so I’m pretty happy. I didn’t expect to pay that much, but it is what it is.’’

According to the senior economist at Australian Property Monitors, Dr Andrew Wilson, the Redfern median house price has just surpassed $1 million for the first time.

“I’ve re-run the numbers and the median price for Redfern is $1.01 million,” he said.

“Redfern is now one of those million dollar suburbs of Sydney, with a top price last year of $2.45 million.”

The house in Chelsea Street is Mr Phan’s third property purchase; he plans to renovate with his builder brother Tom and lease it out. The rental return, Tom joked, would depend on ‘‘how many bunk beds we can fit in there’’. The pair estimate it will cost about $150,000 to make it liveable, which would include replacing the floorboards and adding a fourth bedroom in the attic.

Selling agent Warren Gibson from Century 21 Parkins Gibson said more than 100 groups had toured the property before the auction.

Many Sydney properties blitzed their reserves on the first Saturday of the 2014 auction season.

Another deceased estate, at 5 Chiswick Street, Strathfield South, also drew in a huge numbers, with many in the 100-strong crowd gobsmacked to see the rundown two-bedroom home sell for $932,000. 

‘‘It was in pretty bad condition,’’ selling agent Joe Campisi from Devine Real Estate said.

Across Sydney there were 93 properties scheduled for auction on Saturday, 21 more than the same weekend last year.  Sydney recorded a preliminary clearance rate of 80.3 per cent on the day, in line with the strong results that characterised the city’s market late last year. There are 1467 properties already scheduled for auction this month – 43 per cent more than the 1026 last February.