They’re often the worst home on the street and are severely damaged, dirty, smelly and unsafe to live in — but derelict homes can be a buyer’s dream.
Often found in Sydney’s most desirable suburbs from the north shore to the inner west, derelict homes marketed as a blank canvas opportunity are some of the most clicked real estate listings and highly attended open homes.
The demand should come as no surprise, given the opportunity ticks two things most Australians love — property and renovations.
Engraved into our identity through reality shows like The Block and Selling Homes Australia and weekend trips to Bunnings, the population is mad about doing up houses.
The Australian Bureau of Statistics reported that this obsession hit a record high in 2018, with $9.896 billion spent on private investment in alterations and additions.
REA Group chief economist Nerida Conisbee said The Block factor was just one reason why Australians are obsessed with homes left to rot.
“They certainly have an appeal for buyers who have always dreamt of doing their own Block,” she said.
Ms Conisbee said “dump” or “blank canvas” listings are always highly searched on realestate.com.au.
“There is always people looking for these homes and it is always the price that gets them hooked,” she said.
Ms Conisbee said they can often be listed at 40 per cent below median price for the area and buyers see it as a cheap way to get into a desirable suburb for a fraction of the cost.
Despite their attractive pricing, these homes can often sell for well above reserve come auction time. This past month a derelict North Bondi home sold for $500,000 above reserve after 11 bidders registered, a St Peters dump had 29 registered bidders, while a crumbling Newtown house with no indoor toilet sold last week for $1.4 million — $90,000 above the suburb’s median sale price.
Buyer’s agent and CEO of Propertybuyer.com.au Rich Harvey urged buyers to be careful about overbidding for these homes at auction.
“I’ve seen buyers get carried away countless times, and they especially have to be careful in this market when competition is strong,” he said.
Mr Harvey said derelict homes up for auction will often see more buyers register to bid than a normal home.
“Many think they will bag a cheapie because of the state they’re in, and this is especially the case if the ad says ‘deceased estate’,” he said.
The buyer’s agent said buyers still need to do their homework when looking to buy one, regardless if they plan to knock the home down or not.
“You need to know how much it will cost to build or if there are any restrictions on what you can do with property,” he said.
“You don’t want to get caught out.”
Regarded as a hot spot for dilapidated homes, the inner west has seen some interesting listings in the past month from a Leichhardt hoarder’s home described as “disturbingly ugly, depressingly dingy and completely without charm”, to a Newtown home in a shocking state. The Watkin St home is being sold by The Agency’s Brad Gillespie, who said blank canvas dwellings just click with buyers.
“People love they can come in and do whatever they want and not feel bad about pulling out something that might have value,’’ he said.
With buyers often demolishing these homes, Mr Gillespie said they are the next best thing to buying a vacant block of land in a city that has no more space.
“It is very rare to find these homes, so buyers jump at the chance when they appear,” he said.
The eastern suburbs agent said hopeful buyers will usually be up against a different buyer pool than other homes in the area.
“You usually see less families and a lot more experienced builders and renovators,” he said.