Why buyers looked past the flaws in this unit – and paid $2.4m – The Australian Financial Review

We speak to the team behind the most intriguing recent property sale.
The property: A two-bedroom apartment in original 1972 condition at 17D/50 Whaling Road, North Sydney, NSW. Sold at auction for $2.427 million.
Original living area, original kitchen: The two could be combined – for a price. 
Who was the agent/agency? Louise Barton, BresicWhitney.
How long was this on the market? [Barton] It was on the market for just over 30 days.
Why did this one sell? It was a clever marketing campaign, knowing exactly what the property required. We were dealing with an original 1970s apartment in all its glory. It was unrenovated and original from when the building was complete.
Was it overpriced? No. I think it was well-priced. There were very good comparable sales. The market reacted well to our pricing. I was confident in our pricing guide of $2.03 million.
Enough to forgive the renovation costs: Even an estimated $200,000 to $500,000 investment did not put off owner-occupiers chasing the unit. Investors held back, however. 
What was surprising about it?
The number of people who will overlook the renovation [costs]. This year I have seen a shift. Not too long ago, what we were seeing in the apartment market [was] people being afraid of the renovations required. We were imagining it was going to put people off, but they are more open to doing renovations now.
There was an incredible view. That was something buyers saw a lot of value in. It has to be something a little bit special, but they’re willing to look past those renovation costs.
So what was the strategy?
The property really did need everything done. We wanted to make everyone clear online with the extent of work required. I wasn’t looking to waste anyone’s time. I wanted them to embrace the property for what it is.
It was a deceased estate. I didn’t see the point of styling, to be honest, given the work that was required.
We wanted people to actually be surprised with how much they loved the property when they walked through, rather than hiding certain aspects of what was required.
In its original 1972 state: Wallpaper was falling off the bedroom walls of the Whaling Road apartment. 
What’s that on the walls of the bedroom?
It’s wallpaper hanging off the walls. It certainly wasn’t neglected – it was a very much-loved property. The carpet was original from the ’70s and was in the best condition you can imagine.
When I listed the property, we were talking about renovations with the client. We focused on return on investment. With this property, it wasn’t a case of a slight renovation to add value – it was a case of if you started, where do you stop in terms of getting the property ready? It really did require everything.
How much is ‘everything’?
The feedback we got from people within the industry – I had a developer come through – was that you could spend $200k for a very basic renovation, as in making the place more neutral, or you could spend upwards of $400k, $500k on a more high-end renovation and that would include potentially opening up the kitchen.
How did the auction play out?
We had five registered bidders on the day and we had three active bidders.
The three bidders from the opening bid of $1.8 million were extremely active. It was speedy getting up to that $2.3 million mark, and from there it started to go up in slower increments.
The three active bidders were owner-occupiers. The two registered people who didn’t bid were investors. There was more emotion involved from the owner-occupiers.
The two-bedroom apartment in original 1972 condition at 17D/50 Whaling Road in North Sydney sold at auction for $2.427 million. 
It was telling that the two investors didn’t bid. Perhaps they thought the property would come in lower than we were guiding.
Do you reckon we’ll see another result like this: a) next week b) next year c) next cycle d) never?
b) Next year. We will see results like this for those extra special properties or those unique properties in the market. I don’t think we’ll see another sale like this, this year – we’ve only got a couple of months left this year.
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