Crumbling Erskineville terrace sells for $1,085,000 at auction with just one bidder

A tiny Erskineville terrace in unliveable condition sold for almost $1.1 million on Saturday, defying speculation that some gut-renovators have perhaps gone cool on the Sydney market.

The crumbling two-bedroom house at 12 Clara Street last sold in 1982 for $45,000, and the owners – a family of investors – had kept it vacant ever since, according to LJ Hooker Newtown agent Nick Moraitis.

A small crowd of neighbours and prospective buyers braced themselves against unusually strong and cold winds to catch one last glimpse of the property – which bore an “Enter at your own risk” sign – before the hammer fell.

It was one of 579 Sydney properties scheduled to go to auction on Saturday. By evening, Domain Group had recorded a 69.4 per cent clearance rate from 394 reported auctions.

Although 10 contracts were put out in the weeks prior to the Clara Street auction, only three bidders registered on the day, and just one cast a bid – for $1 million.

That bid was below the owner’s reserve, but after negotiation the buyer agreed to part with $1,085,000 for the distressed house.

The buyer – who arrived just moments before the auction began and cut a striking figure in hi-vis workwear – was in no mood to socialise with bystanders, disappearing inside the house with his partner when proceedings concluded.

Moraitis said the young couple were “very happy” with their purchase and hoped to renovate and on-sell the property, which was DA approved for a three-bedroom residence prior to the sale.

“It’s always hard selling a home in this state at auction because the buyer needs to have plenty of cash left over for the renovation,” Moraitis said.

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But the property’s location – in a tightly held residential enclave within walking distance of Erskineville village – encouraged the buyers to dig deep, he added.

“We also had motivated vendors that wanted to sell today,” Moraitis said. “The father of the family passed away and the daughters didn’t want to hold on to the property.”

Recent price growth in the inner west suburb has been strong, according to Domain Group data. The median house price rose 9.9 per cent in the past six months, and is up 101.6 per cent over the past five years.

The Clara street property sold for well below the current Erskineville median house price of $1.49 million.

Domain Group chief economist Andrew Wilson said he expected the property to sell, despite other dilapidated homes passing in this month.

“That was a cherry-ripe property for renovation, even if Erskineville is a little on the margin in terms of its cachet for flippers,” he said.

“But flipping properties is not the sure thing it was a year or more ago, and many prospective buyers recognise that,” he said.

“The lack of bidders today probably reflects the perception that the Sydney market, while still continuing to grow, is not in that ‘boom’ mode that it’s been in for the past three years.”

Wilson said properties with significant profit potential – particularly those within three kilometres of the CBD – will continue to sell, even while other parts of the Sydney market cool. But he added that many opportunistic investors had dropped out of the market in 2017.

Other inner west locales also recorded strong results. In Five Dock, a modest three-bedroom house on a main road sold the night prior to auction for $1.41 million.

The house, on a 450-square-metre parcel at 518 Lyons Road West, is currently divided into two rental units which net a combined $1200 per week.

But the new owners – a young family – plan to recombine and live in the property, according to agent Danny Michael.

“In the past four to six weeks the market has been pretty quiet around here, but things are still getting sold,” Michael says.

Also in Sydney’s inner west, one of the most anticipated homes scheduled for Saturday never made it to auction.

A four-bedroom home on 622 square metres at 20-28 Munni Street, Newtown sold prior to auction on Thursday for about $4 million. The sale topped Newtown’s previous record of $3.8 million.

Selling agent Trent Gallagher said the buyers plan to live in the home and then look at development opportunities down the track.

In Enfield, a four-bedroom home at 46 Baker Street sold for $1,170,000 at a competitive auction on Saturday morning.

It was a battle between two families, attracted to the property because of its prime location near transport hubs and Strathfield, selling agent Patrick Pasquale Lettieri, of Elders Inner West-Belfield, said.