‘Insane’: Run-down home sells for $3 million

A flurry of eye-watering bids for an overgrown house in one Aussie city has raised questions about the state of the housing market.

The more than $3 million sale of an overgrown two-bedroom house in Brisbane has raised questions about the state of the city’s housing market.

The home in Perrott Street, on a 473 sqm corner block in the ritzy inner-city suburb of Paddington, went under the hammer over the weekend.

After an opening offer of $2.75 million, a flurry of bids quickly brought the sale price to $3.1 million – well above the suburb’s median price of $1.9 million.

The property listing said it had been in the same family for 100 years and was used as a hospital during the Second World War.

But it had not been occupied since the 1990s and would require “significant works to bring it up to a comfortable living standard”.

Photos showed the house was in a state of disrepair with the roof overrun with weeds, though it stood on a spacious block and commanded views of the city.

The home is in Perrott Street, on a 473 sqm corner block in the ritzy inner-city suburb of Paddington. Picture: Supplied

The property listing said it had been in the same family for 100 years and was used as a hospital during the Second World War. Picture: Supplied

The new owners were a local family who intended to be owner-occupiers. Picture: Supplied

Reaction to the sale on social media was mixed, with some Aussies labelling the $3.1 million sale price as “insane” and “ridiculous”, and the home itself as a “dump”.

“Problem is someone will knock it down for the land and build some garbage thing,” one said.

“It gets you a block of land worth $3.5 million three weeks from now after you bulldoze the shack,” another added.

But Ray White agent Max Hadgelias told news.com.au that the new owners were a local family who intended to be owner-occupiers.

There had been “fantastic interest” in the home, with 15 registered bidders at the auction along with scores of locals who attended out of curiosity, Mr Hadgelias said.

Given the home was a protected character house it was “unlikely” to be bulldozed to make way for a development.

“It requires a lot of work, but someone restoring it will bring it back to its former glory.”

Although the property was in a run-down state, the price was “underpinned by its location,” which included its sought-after Paddington postcode, elevated position and city views.

Mr Hadgelias described the local housing market as “strong – there’s good activity across all spectrums at the moment”.

Photos showed the house was in a state of disrepair, with the roof overgrown with weeds. Picture: Supplied

Situated on a spacious corner block, the home commanded views of the city. Picture: Supplied

Leith van Onselen, chief economist at Macrobusiness.com.au, said the sale was indicative of overstretched demand for housing in Brisbane.

The city had seen an 89 per cent increase in house prices since March 2020.

“Brisbane’s had one of the biggest house price rises in the country since the pandemic,” Mr van Onselen said.

“It’s gone from being one of the more affordable housing markets to being the second-most expensive (after Sydney).”

The cause was a “gigantic surge” in both interstate and overseas migration to Brisbane.

“It’s a real pressure cooker situation in Brisbane unfortunately, and I think the (2032) Olympics will make it worse.

“Obviously the inward migration from overseas and Australia has overwhelmed supply.”

PropTrack data for June showed Sydney remained Australia’s most expensive city with a median house price of $1.18 million, followed by Brisbane at $908,000, Adelaide at $837,000, Perth at $836,000 and Melbourne at $818,000.