Investor beats first home buyer, pays $815,000 for inner-city apartment

An investor paid $815,000 for a one-bedroom apartment in Redfern on Saturday, outbidding a first home buyer.

About 40 people gathered on the tree-lined street to witness the auction of 1/1-9 Thurlow Street, with bidding opening at $740,000 within seconds of the auction starting, followed by a further seven bids of $10,000 each.

A final bid of $5000 drew auctioneer Emma Brown-Garrett’s hammer and the property sold. It had a guide of $740,000 and a reserve of $750,000. There is no legal requirement for a vendor’s reserve to be in line with their property’s price guide.

Eight parties registered to bid and three were active.

The successful bidder from Mascot works in the real estate industry and said he had been looking at the potential for capital growth in the area. He found out after the auction that proceeds from the deceased estate will go to a children’s cancer charity.

Belle Property Surry Hills sales agent Ben Rofe said some of the interested first home buyers were concerned about the cost of renovating the apartment, which may have affected their bidding.

“It’s a low maintenance 1960s block and there’s potential to add a lot of value,” he said. “A lot of the first home buyers overestimated how much it would cost [to renovate].”

Brown-Garrett said it was important for first home buyers to have a strategy for bidding against experienced investors to succeed.

“I have had investors at auctions, and they have been tenacious, especially for something like this,” she said.

The property was one of 865 scheduled to go to auction in Sydney this week. By evening, Domain Group recorded a preliminary auction clearance rate of 47 per cent from 520 reported results throughout the week, while 213 auctions were withdrawn. Withdrawn auctions are counted as unsold properties when calculating the clearance rate.

In Woollahra, a five-bedroom home passed in at auction with a vendor’s bid of $5.4 million.

Two local families registered to bid for the turnkey home at 11 Raine Street, with both taking part. Bidding opened at $4.7 million. The property had a guide of $5.5 million and a reserve of $5.7 million.

“We had been guiding $5.5 million the whole time, and we thought we had three people interested, but in the end there were two,” The Agency sales agent Ben Collier said. “I am hopeful that we will secure a sale shortly.”

He said it was not just prices that had shifted recently, but that the way properties sell had also changed.

“We had another [property] pass in six weeks ago and that should exchange on Monday for around what we said it would go for. There is a degree of acclimatisation occurring.”

In Fairlight, a first home buyer bought a two-bedroom townhouse for $1,725,000.

Seven bidders registered to raise their paddles for 2/14 Austin Street, with three bidders active over a 50-minute auction.

Bidding opened at $1.5 million, below the guide of $1.6 million, with increments of $20,000, followed by bids of $5000, $1000 and $10,000.

When bidding reached $1,695,000, the bidder, a first home buyer, was asked to bid against himself, which he did, raising the bid to $1.71 million. Another bidder then entered the fray, offering a further $1000. However, two more $1000 bids and she was out.

Cunninghams Real Estate sales agent Georgi Bates said she had a third bidder on the phone from London, who was on the Tube during the auction.

“[He made an offer and] I was prepared to negotiate with [him] next week,” she said.

Instead, the first home buyer made a final bid of $1,725,000 – the same as the reserve – and the auction ended.

The vendors are upsizing locally.

Bates said the drawn out nature of the auction was “like pulling teeth”.

“Even getting an opening bid was a challenge, but [this result] shows there are buyers out there, particularly under that $3 million price point.”

In Lilyfield, a two-storey, four-bedroom home passed in with a vendor’s bid of $2.95 million.

BresicWhitney Inner West sales agents Chris Nunn said there were no registrations for 5 Ryan Street, although one interested party, a local family, was present.

Nunn said negotiations would continue into next week. The property now has a sale price of $2.99 million.

It was originally listed with a price guide of $2.9 million and had a reserve of $2.99 million.

The vendor is moving overseas.

Nunn said the result demonstrated the unpredictability of the current market.

“There are properties [we’ve sold] where you go, ‘Wow, that rocketed’. We have had [properties] in the past two weeks that people have been vying to buy and others where people are engaging and then dropping off.”