'Quirky' homes secure big results in NSW market

After a blazing first quarter of 2021, the rate of property price growth around Australia eased slightly in April.

Things didn't cool off all that much in NSW, though, with median dwelling values in Sydney rising another +2.4 per cent last month to a record high of $950,457.

The state's regional areas saw a +2.2 per cent boost in the same period, a figure beaten only by Tasmania. 

There are still countless stories of properties selling well beyond asking prices, buyers going to open homes in droves and new listings barely lasting a week. 

We spoke to a couple of NSW's top agents to find out what they've been seeing on the ground and to share some standout sales. 

Polarising three-bedroom terrace sells above $3m in Sydney's Inner West

Ercan Ersan, director at Ray White Erskineville, has seen the effects of the ongoing FOMO frenzy continue to play out in Sydney's Inner West.

41 Gowrie St in Newtown sold under the hammer at the beginning of May and turned in a result that far surpassed expectations.

The three-bedroom, three-bathroom, one-car terrace, slotting into a sought after location between Erskineville's village and Newtown's King St strip, had undergone a bold and extensive renovation that Mr Ersan said was a key factor in the sale's success. 

"It had some really unique furniture and art which I think helped people emotionally fall in love with the property," he explained. 

"That's what helped it get the price that it did. Everything about it was a bit different—the kitchen had an oversized island that the majority of people didn't like, but it was quirky and unique enough that the people that liked it absolutely fell in love with it."

Mr Ersan had originally estimated the property would sell around the $2.5 million mark, particularly since a similar house nearby had gone for $2.2 million last year. 

All up the house had about 150 groups through at inspections, and while interest was high the property's "out there" style and a relatively low square metreage of under 140 appeared to polarise potential buyers, families especially. 

In the end, just three couples, all from nearby suburbs in Sydney and without kids, registered to bid at the auction. 

"Usually, when you've had 150 through a home you'd expect to have at least ten people bidding at the auction, so that was quite interesting," Mr Ersan said.

"I think a lot of that had to do with the house being, for that price, quite a small amount of land, it didn't suit families.

"Most families in that price point expect a bit more land, maybe double parking, and again the oversized kitchen island, the quirky artwork—it was never going to appeal to a family."

On the eve of the auction, Mr Ersan said the three interested parties were all telling him they couldn't see themselves bidding beyond the $2.6 million mark, a full $100,000 below the $2.7 million figure the vendors were hoping for. 

"But when they saw social proof that someone else wanted it as much as them, it wasn't about where they saw value, it was about what they have to pay to beat the other people."

In the heat of the moment, the three-way race reached a peak of $3 million. With the hammer about to go down, one of the couples delivered a "knockout blow" of an additional $20,000, and that proved good enough. 

Mr Ersan said the final sale price of $3,020,000 proves the power of auctioning, especially in market conditions like this. 

If he had gone down the private treaty route, "we would have put it up for sale at $2.7 million, taken offers between $2.5 and $2.6 million and probably sold it for $2.65 million. But with an auction, you almost, in essence, take the price out of the equation.

"Don't get me wrong sometimes it goes the other way and it passes in at $2.5 million, it's not always roses. But more often than not the purpose of the auction is to take price out of it, bring in the entire market and then let them, in a public competitive environment, fight against the other buyers to see who wants it the most."

The sellers, who are now seeking a tree or sea change, are glad to have sold first and now know precisely what their budget is for their next move, Mr Ersan said. 

And with a few hundred thousand dollars more than what they anticipated, "it allows them to buy better than what they were expecting to buy."

Illawarra four-bedder in need of a refresh exceeds expectations

When it comes to property market booms and the media, Sydney often seems to be the centre of attention. 

It's far from the only place where you can find stories of dramatic results, though, as Daniel Ellem, director of Illawarra Estate Agents, can confirm. 

"We've had some massive results—I'm talking 20 to 30 per cent above expectations," he said when recalling recent market activity around the south coastal region. 

25 Turner Esplanade in East Corrimal, right on the border of Bellambi and in close proximity to the beach, is a prime example. 

Mr Ellem suggested that a number of aspects about the four-bedroom, three-bathroom, single garage house were perhaps not working in its favour, leading him to set himself a target sale price of $1.1 million.

"It was very quirky, it was quite dated. It was actually only on half a block of land, the block had been subdivided many years ago and [the house] built on the back, so this block actually had no backyard whatsoever."

He said nearly ten other agents offered appraisals of the property, and his $1.1 million goal was the most optimistic of the lot. 

"Nothing inside the home had actually been updated, so it was expected to hit those sorts of figures."

Despite the suburb not having the best reputation in the past, Mr Ellem said East Corrimal had become extremely popular, and "everything on the Eastern side getting closer to the water is going crazy."

As it turns out, the Turner Esplanade house instantly attracted several highly motivated buyers, and plans to take it to auction were quickly derailed when the offers started coming in.

Within about three days of the property being listed, it was sold for $1.341 million to a young couple with family in the area. 

"The other people that were showing interest were from out of the area, they'd missed out on a few properties and were quite desperate to find something in that area," Mr Ellem said.

"Even when properties are hitting the market, if they're not quick enough to jump on those properties they're getting snapped up fairly quickly. So over the last six weeks, nearly every property we've put on has been well above reserve or expectations, whether we put a price on it or we go to auction."

The seller took full advantage of the market conditions in order to make a move further down the coast. 

"They were looking to downsize on the mortgage and put it into something a little bit newer further south, so getting down towards Dapto, Wongawilli, because you get a lot more for your money down that way," Mr Ellem said. 

"They were cashing in on the market the way that it currently is, heading down that way. Not that there's less competition, but you're still getting a lot more for your money."

22 Perth Rd in Port Kembla is another standout for the iEA team. 

Not long prior to the sale of the three-bedroom house, a "slightly bigger, better property" a few doors down had sold for $780,000.

"The one we had was 2.5 bedrooms," Mr Ellem explained. "We were expecting, with the market the way it is, about in the $750,000 to $800,000 range. 

"We ended up having 67 groups come through in 6 days and we sold it for $940,000."

The sales are indicative of the buzzing activity the region has seen throughout 2021, he said.

"We cover most of the suburbs around the Illawarra and we're getting results in pretty much every suburb, so it's not just a hotspot or certain suburbs that are attracting attention, it's literally everywhere. The market's just, yeah, it's amazing."

The rate at which things are growing has had a flow-on effect for renters too. 

"Even the rental market is crazy, it's extremely strong. We manage just under 1000 properties and we're getting 20 to 30 groups wanting to come to our rentals because they can't afford to buy in this market. 

"But then it's making it even stronger for our investors who want to buy properties because they've got a number of tenants that they can choose from."

What comes next for NSW properties?

There's no denying that it's been a roaring start to the year. 

Mr Ersan said "this is the strongest market I've seen in 17 years of selling, it's definitely stronger than it was in the old peak of 2017.

"I think a lot of that has to do with the pent up demand that people had, the forced savings that people had from not going overseas."

Without being able to spend on holidays, he said many people have been forced to save since the beginning of the pandemic, and that extra money has funnelled into a desire for making life changes like moving house. 

But will it last? "I'm not brave enough to suggest how long it's going to be like this, but I think we should be ok at least up until spring, and the only thing that will change in spring is there will be more property on the market and more choice for buyers, and that may have an impact on prices—whether they continue to grow or just plateau."

Mr Ellem indicated that a cooling-off could be in motion. 

"I guess I can be a bit sceptical at times. We're on the ground, we see what's happening, and going back two months ago we were getting between 50 and 70 groups through all of our properties within a week. Now we're getting more like 20. 

"20 to 30 is still a great number, so I'm not sure what would cause it to kick on again another 10 to 15 per cent."

He suggested buyer sentiment will play a big role in what happens next. 

"The feedback that the buyers are giving us is it's more of a gamble now. Do they buy in now while the market is extremely hot and the prices are high or do they take the risk that it's going to settle down a little bit and potentially even drop? 

"If [buyers are] starting to think that way, it actually causes that effect on the market. Prices are still high, we're still getting great prices, but I don't know how it could climb another 10 to 15 per cent. I don't know what could cause it to do that."