It’s the auction Australian real estate commentators have labelled “bananas”. A Sydney buyer coughed up A$7.1 million (NZ$7.692m) for a rundown apartment for his kids at the weekend.
Admittedly the apartment is in Bondi – home to popular TV show Bondi Rescue – and has widescreen views of the beach and the ocean, but even in Sydney’s high-stakes property market, where waterfront pads can top A$100m and garages can fetch A$1m, it was an eyebrow-raising sale.
Raine & Horne Double Bay agent Ric Serrao, who brought the deceased estate at 5/17 Wilga Street, in Bondi, to auction, told OneRoof this week that the sale was standout one.
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There 14 bidders competing, the final sale price was A$3.1m above the reserve, and the under-bidder was a “young man in his 30s”, according Domain real estate site.
“Genuinely, none of us expected it to go for what it did,” Serrao told OneRoof, noting that a fully renovated three-bedroom place at the northern end of the beach had recently sold for A$4.75m.
“The reserve was at the top end of the range. We had 330 enquiries and 15 registrations for the auction. That gave us a clue it was going to go well, but you know, if it went to $4.1m or $4.5m or $4.8m, none of us would have been surprised."
Auctioneer Jake Moore, of Cooley Auctions, told the Sydney Morning Herald that the auction was one of the best this year. “It went completely bananas … the result was way over the reserve. The opening bid alone was A$4m, and we didn’t get a bid smaller than $50,000,” he told the media outlet.
The interior of the Wilga Street penthouse. It was packed with bidders during the auction last weekend. Photo / Supplied
In his marketing, Serrao and colleague Sasha Bronfentrinker, made no bones about the state of the four-bedroom 203sqm flat, calling it dilapidated and primed for a complete renovation.
Serrao said the buyer was a local and knew the value of the property and its location. “He wanted a home for his kids to keep them close. They’re a really, really nice family. I did ask them if they were adopting any 57-year-old real estate agents,” he told OneRoof.
As well as forking out for the high-end renovations the location demands, the new owners face a A$1m levy for repairs to the building – but it will be worth it, the agent said.
“Whatever you spend, you hold on for five years and you’ll recuperate it well.”
Ray White chief economist Nerida Conisbee said that the “crazy money” the apartment attracted demonstrated the demand for beach-side property in Sydney. “People will pay well above [in Bondi]. It’s hard to buy in because it’s fun, it’s beautiful. There’s no new development and everything is tightly held,” she said.
Ray White chief economist Nerida Conisbee: “Homes like this are hard to price. They don’t come to market very often." Photo / Supplied
“It’s not in the same league as the top harbour suburbs like Pipers Point, but those are massive homes. Bondi is younger and there’s a changing of the guard.”
Conisbee said any property with 14 bidders was exceptional, as the current auction average across the market was just 2.6 active bidders per property.
“Homes like this are hard to price. They don’t come to market very often, and it shows what a premium rarity can get,” she said.
Serrao said there have been recent sales in the popular suburb for well over A$10m, telling OneRoof he had sold a three-bedroom apartment right on the water just a few weeks ago for A$11m (ahead of its auction).
“I think Bondi is going to continue to heat up. There are pockets that haven’t gentrified, and as you get closer to the beach the demand is so great that people will compromise on certain things like parking,” he said.
“We’ve had six appraisals from this result. There are only four other apartments in the block so we’re trying to see if anyone else will sell.”
And Serrao has another crazy Bondi auction on his dance card – a garage in North Bondi that he expects to sell for over A$1m.
NZ's top residential auction sale price is $12.77m, paid in October 2022 for an apartment at 308 Remuera Road in Remuera, Auckland. Photo / Supplied
The top price paid at an auction in Auckland this year was $7.7m for a completely renovated 1920s home on Seaview Road, in Remuera. Photo / Supplied
Ray White Remuera co-owner and auctioneer John Bowring, who started his career in Australia, said it was unusual for properties to exceed the reserve by several million dollars.
“You know, you wouldn’t get [Ray White Remuera agent] Steve Koerber selling something for A$3.1m above reserve because he simply wouldn’t let the seller set the reserve,” he told OneRoof.
“If we were selling a house and we said, ‘look, we’ve got five really good buyers’ and the vendor said, ‘OK, I want to set the reserve at $1.2m’, we’re going to want you to go to $2.3m. I know it’s aspirational, but if we don’t get it, you can always change.”
Bowring said that at the 2021 market peak, he had seen prices go to maybe $1m above reserve, no more. “That was about rarity value – for something like a development site. For developments, in 2021, you didn’t know what a developer would pay.”
Bowring pointed out that big auction prices were expected in Sydney, more so than in Auckland, where the top residential auction sale has only topped $10m once, in October last year, when a penthouse apartment on Remuera Road sold for $12.77m.
And Australian rules require the reserve to be declared in the auction, which is not the case in New Zealand.
“Aussies will take a property for $18m, $20m $25m to auction. We should, but we just don’t. We’re not as advanced in the auction market,” he said, adding that there were far more billionaires in Sydney than in New Zealand.
“They’ve got people who could just go to an auction and pay $25m and not worry about finance. We don’t have that,” he told OneRoof.
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