A dilapidated house with propped up walls has sold for $750,000 more than the asking price in Adelaide, where buyers and sellers are seeing big price bumps in recent months.

Key points:

  • A delipidated house at Glenunga has sold at auction for $2.05 million
  • The sale comes amid a real estate boom in Adelaide
  • A real estate expert says prices are trending up across the country

The cottage at Glenunga, in Adelaide’s inner-south-east was advertised for three weeks before being sold at auction for $2.05 million, despite its condition.

Agent Daniel Oliver had a feeling it would gain plenty of interest after advertising for the 1,200-square-metre property went live.

“Within two hours we actually got an offer that came in at $1.5 million, which was $200,000 above what the owner wanted, which would have been a great result,” Mr Oliver said.

That trend continued in the weeks leading up to the auction, with 88 buyers wanting to purchase the property before auction.

The 1950s cottage has three bedrooms and two bathrooms, but it’s not in good shape.

He said there were about 500 people at the auction with nearly 50 registered bidders.

The property, centre, has room for a swimming pool and tennis court, two possibilities which Daniel Oliver said contributed to the inflated sale price.

“It [the first bid] started off at $1.4 million and the second bid really wowed the crowd and it went straight to $1.8 million — a $400,000 increase in one bid,” he said.

“It ended up at $2.05 million.”

Despite the extraordinary result, he admitted the property went for more than it was worth.

He said homes in the suburb had been popular, with many buyers wanting to secure a home within the Glenunga International High School zone.

Sale ‘not surprising’

President of the Real Estate Institute of Australia Adrian Kelly said the sale was following a trend across the country.

“It’s not surprising … it just goes to show the resilience of the Australian property market,” Mr Kelly said.

“We’re seeing records being broken all over the place, but we weren’t expecting this 12 months ago — we were staring down the barrel of 20 to 30 per cent value reductions in housing and that obviously hasn’t occurred.”

Mr Kelly said the “silver lining” of rising property prices was that they were being driven by first-home buyers at both a state and national level.

Harris Real Estate said about 500 people attended the auction, with nearly 50 bidders registering on the day.

“In the most recent quarter we saw an almost 26 per cent increase in first-home buyers in South Australia alone,” he said.

“In the COVID year, first-home buyers increased by 65 per cent.”

A combination of record-low interest rates, combined with State and Federal Government incentives has helped first home buyers get into the market as investors took a back seat.

“That’s largely due to confidence issues stemming from COVID and also non-eviction periods for tenants,” Mr Kelly said.