Rundown homes in need of serious TLC are attracting strong attention from buyers looking to get a foothold on the property ladder - no matter the state of the home.
Affordability constraints and increased competition has seen buyers reconsider a fixer-upper home, after surging building costs and tradie shortages saw them fall out of favour in recent years. Though not in all markets.
The Brisbane home had multiple offers well in excess of its asking price, despite having a half-finished renovation. Picture: realestate.com.au
A Brisbane home in the midst of a renovation that was abandoned once termites were found proved to be no deterrent for buyers, with the Toowong three bedroom home selling for $1.01 million, well in excess of its $850,000 asking price with multiple offers.
“We weren't sure how the property would be received in the market, so we were a little bit cautious in our expectations,” sales agent Doug Disher said.
“We ended up with 18 written offers with four offers above a $1 million, and two offers were above that, substantially.”
The renovator's delight was the second most viewed property on realestate.com.au last week. Picture: realestate.com.au
The home was the second most viewed property on realestate.com.au in the past week.
Mr Disher attributed the home’s popularity due to its price point, as a home under $1 million was near on impossible to find in Toowong.
In Perth, Belle Property head of WA Travis Coleman said with such low stock available, it was a case of “beggars can’t be choosers” for buyers if they want to snap up a home.
“Buyers are a lot less fussy, so they'll actually proceed and because there's just not many choices they need to buy what’s out there,” he said.
“And some potential cosmetic things that may have been an issue in markets gone by, they are now being overlooked by someone who just wants to get a property.”
He said fixer-upper homes in Perth are often selling within 10 to 14 days, with multiple offers received.
“It's very commonplace to get 50 groups of people through,” Mr Coleman said.
He pinpointed Kwinana and Rockingham in Perth’s south, and coastal Scarborough and Innaloo as among the suburbs where competition for fixer-upper homes is high.
“I think people will overlook the fact that a property needs to be fixed up if the location and basic fundamentals are right,” he said.
Many unrenovated homes in the Maitland region are selling within a week or so. Picture: realestate.com.au
Demand for fixer-upper homes is strong within the Maitland region, north-west of Newcastle in NSW according to LJ Hooker Maitland director Kane Bradley, who said it was the norm for homes to sell in a week or so.
“Probably the reason why our area has continued to see an increase in that is because of affordability,” he said.
“If you look at the Sydney markets or those areas, the affordability probably isn't there to do the high scale renovation and the extensions and everything like that.
“Whereas our area, in some areas, you can still get in that sort of $600,000 to $700,000 for a ‘doer upperer’ [sic], and then they can obviously do the renovation, they still make some money on it.”
Buyers aren't afraid to tackle this fixer-upper. Picture: realestate.com.au
A dated green and orange kitchen and throw back pink and blue bathroom was a renovation project many buyers were keen to take on, with 70 Brisbane Street in East Maitland, set to go under offer after receiving five offers within just days of being listed.
It also boasted a sprawling backyard with scope to extend the existing three bedroom home, or build a granny flat.
Mr Bradley said the new owners plan to renovate it to “value add” and rent it out.
Melbourne buyers less keen on fixer-uppers
In Melbourne unrenovated properties still tend to languish on the market, and were not a popular buyer segment according to buyer’s agent Cate Bakos.
“People have been really anxious about the idea of overheated building costs and trade shortages and blowouts in time and cost,” she said.
“We've had some really significant infrastructure projects here, and all of the trades have kind of been dragged into that earning their big bucks and so domestic projects have just been astronomical.
Buyer’s agent Cate Bakos said buyers remain cold on fixer-uppers in Melbourne, which has lagged behind other states.
Ms Bakos said a good sized block or a great location was not enough to lure buyers to a fixer-upper home.
“I think that will change in time and I'm just starting to see some builders freeing up, previously, getting a quote was so hard,” she said.
“And I think people just loathed to take the risk given that we haven't had the property price growth.
“I think a lot of people are scared about overcapitalising. They're not getting land value increases, and then they have a project that goes over budget or over time, then that could be a really tough blow for someone who spent significant money on their house.”
Melbourne's property market has underperformed in recent years, with buyers still opting for renovated homes over fixer-uppers. Picture: Getty
Additionally, she noted a tight rental market in Melbourne was another deterrent for people having nowhere to live while undertaking a home renovation.
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