Decrepit “shack” in Sydney’s Enfield, unfit for living, expected to fetch $2 million at auction due to prime location demand.
Australia’s real estate market has a lot going for it. Just ask the lucky winning bidder of this cool-as Brisbane substation, let alone the newly-rich owner of this house that just sold for $80 million after being purchased for $300k… However, a property that just hit the market is confirming everything wrong with Sydney’s mind-boggling real estate milieu.
In an unpleasant testament to the city’s ever-surging market, a decrepit, rotting timber house in Enfield, described as an uninhabitable “shack,” is slated for auction this weekend with a starting price tag of $2 million AUD. The house, which has been vacant for the last 18 months and rests on a 507 square-metre block, symbolises the stark disconnection between property values and living conditions.
The Property
The house in question is located on The Parade — a street apparently well-acquainted with eyebrow-raising sales — and presents severe structural issues, including rotting timbers at its base and perilous flooring. According to Matthew Blackmore of Richards Matthews Real Estate, the house is “not fit for habitation,” with damages so extensive that walking inside requires extreme caution due to the aged timbers and ceiling holes.
Despite these glaring safety hazards, the property has not deterred potential buyers… of which there are plenty. The area’s popularity has even led some locals to confess their long-held interest in purchasing the property if it ever hit the market.
Market Trends and Buyer Intentions
Most potential buyers aren’t actually looking to restore the dilapidated structure but rather demolish it for a new build, which is a rare opportunity in the expensive inner west suburb. Blackmore estimates that constructing a new house could cost between $1.2 million and $1.5 million AUD, aligning with the standard of surrounding homes and potentially reaching a market value close to $3.9 million AUD once completed.
Unfortunately, this trend of selling properties in poor condition at high prices is not isolated to this Enfield home. Recently, a similar situation occurred with a crumbling two-bedroom house in Kingsford, which sold for $2.6 million — a whopping $800,000 over its reserve price. Another example includes a rundown property in Strathfield, which fetched $3,510,000, also significantly over its reserve.
Such sales underscore a broader pattern in Sydney’s real estate market, where the value of land overwhelmingly surpasses the conditions of the structures upon it. KPMG’s latest Residential Property Market Outlook predicts a continued rise in house prices by over 5% year on year, indicating that the trend of high-priced sales for less-than-ideal properties is likely to persist. As the market remains robust, more buyers seem willing to invest heavily in prime locations, regardless of the initial state of the real estate.
How do you feel about this trend? Is it fair game so far as you’re concerned? or does it represent a much darker truth underlying Sydney’s ever-spiralling market? Let us know.