SYDNEY (REUTERS) – Sydney homes with crumbling walls, shattered ceilings, and bathrooms and kitchens stripped of accessories are being bought by millions as buyers try to grab a slice of Australia’s housing market. Last week, an abandoned brick cabin in the northwest of the city sold for 1.6 million Australian dollars (1.62 million Singapore dollars), a price that the real estate agent who handled the deal said was “much more than we expected.”
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Photos on the realtor’s website showed ripped carpets, tattered roller blinds and a grime-covered kitchen. “(The buyers) are people who wanted to live in this part of Sydney and are looking to tear down the property and rebuild,” McGrath sales agent Michael Dowling told Reuters.
Despite the condition of the house, they were drawn to the nearly 500 square meters of land, he said. “More supply is entering the market, but there is still a lot of demand.” In another attractive suburb in southeastern Sydney, an abandoned house with no water supply or electrical connection sold this month for A $ 4.7 million.
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Estate agents said they expected to see more such sales in the AU $ 8.3 trillion Australian property market. Home prices nationwide have risen 10.6 percent from a year earlier, driven by historically low borrowing rates, tax incentives and strong job growth. In Sydney, median prices rose by around A $ 1,200 a day last month, and buyers were willing to pay a premium for uninhabitable houses to tear down and rebuild.
“It is more profitable to tear down and rebuild than to renovate,” said Ms. Nerida Conisbee, chief economist at real estate group Ray White. Sydney’s North Beaches are another desirable area where there are some “low-quality beach houses” that can be affected by their land value, Ms Conisbee said. “There is no shortage of people willing to buy. We are seeing very high numbers of active bidders.”