Demand increasing for Sydney's dilapidated, knockdown homes … – realestate.com.au

Fiona Killman, Real Estate Reporter
First published 17 Sep 2023, 5:00am
Sydney dumps: Collapsing, hoarder and knockdown homes are fetching prices well over expectations.
They’re Sydney’s hoarder houses, collapsing dumps and homes that need a major renovation or knockdown … and they’re “making a comeback”.
Sales for these often neglected homes or deceased estates are fetching premium prices – often driven up by demand at auctions – across Greater Sydney.
A hoarder house on the Central Coast attracted close to 200 people at its auction last week, before going under the hammer well over reserve for $680,000, while a North Ryde auction saw a knockdown sell $405,000 over reserve.
A hoarder house in Tuggerawong on the Central Coast – with all junk included – sold for $680,000.
The home sold to a young couple keen for a new project.
A collapsing house in Alfred St, Annandale, is generating huge interest.
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Two derelict terraces in Enmore sold half a million over reserve for almost $2m in August, while another hoarder house in Paddington sold for a whopping $3.85m, $400K over reserve, in July.
Ray White chief economist Nerida Conisbee said dumps had made a “comeback”.
“When you have a look at the types of properties that were hard to sell last year they were those really dumpy, un-renovated properties,” she said.
“The reason they weren’t selling was because construction costs went through the roof and it was really hard for people to do a knockdown rebuild or even a simple bathroom renovation.
“Last year was actually the time to buy them, however now it looks like demand is back.
Ray White chief economist Nerida Conisbee said dumps were making a “comeback”.
These dilapidated terraces sold for $1.9m, half a million over reserve.
“I think it’s because the property market has heated up again and people are looking for better value but also construction costs have come back. It’s easier to get things done and does make those properties much more attractive.”
Ms Conisbee said construction costs had started to ease, depending on different areas.
“Supply chains became unblocked earlier in the year and a lot of materials that were difficult to get to Australia have come back,” she said.
“That has helped with pricing but also with the construction industry because we had really big problems with productivity. In many cases a lot of projects couldn’t get done as the materials weren’t in place so it slowed down the whole industry.”
Costs are easing in the construction industry, according to property experts.
She said there still remained issues with labour, however that was starting to resolve with the return of migration numbers.
Ms Conisbee said dumps were a good purchase to help people get into certain areas for less money.
“If you are prepared to live in a bit of a dump for a while or try and renovate yourself, it’s definitely something worthwhile,” she said.
She said it was also significantly beneficial for buyers with a trade or family members prepared to help out.
A dangerous, collapsing dump in Annandale is one of the latest to hit the market.
Interest for the deceased estate on Alfred St is high among builders due to its prime inner west location.
The collapsing Annandale home is encouraging “drive-by” viewings with no inspections allowed due to the dangerous conditions.
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The home is listed through BresicWhitney with chief executive officer Thomas McGlynn saying he had noticed more interest in dilapidated properties over the past three months.
“It’s been gradual and we are starting to see it in all areas,” he said.
Mr McGlynn said buyers were seeing opportunities to make money by building and reselling.
“The market has performed a lot stronger this year than anyone anticipated and people are moving towards high quality products,” he said.
He said families keen to build their dream home and investors out to flip, instead of renting out a new build, were creating more and more competition for rundown homes.
This hoarder house in Windsor St, Paddington sold for $3.85m in July, $400K over reserve.
The Paddington hoarder house sold to a couple planning a renovation who were considering giving the home to their teenage children when they become adults.
“The investor side is interesting with the rental shortage,” he said.
“It’s unfortunate that they are not seeing value in renting and instead buying and flipping.”
Buyers Agent Lloyd Edge said a lack of stock was helping drive prices up for these dumps.
“Often these properties that appear to be really run down are still properties people can grab because it’s within their budget and they might have a goal to build their dream home,” he said.
“There is a demand for that and a lack of that type of stock.
“We have also had three consecutive months of interest rates being put on hold which is helping more positive sentiment in the market.”
Mr Edge said he worked with many builders who said any further increases across the
industry would be CPI only.
“Building costs have increased by around about 30 per cent of what they were before the pandemic,” he said.
“It’s massive and has made it a lot harder for people keen to take on projects.”
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