Warnings about a housing bubble continue as one-bedroom apartment in Sydney’s Elizabeth Bay sells for $1 million

IT’S A tiny roof cavity up five flights of stairs with a shared balcony and no parking. Even the real estate agent is laughing.

A ONE-BEDROOM apartment located up five flights of stairs, with no parking and a shared balcony has just sold for $1 million.

The charming rooftop unit in Sydney’s Elizabeth Bay has breathtaking views to Sydney Heads and access rights to next door’s harbour pool but is just 50 square metres in size.

The unit was created several years ago in the roof cavity of an apartment block at No 6 in prestigious Billyard Avenue. The shared balcony is exclusive to the owner at night and on weekends and public holidays.

Elizabeth Bay unit has charming views to Sydney Heads.

The last time it changed hands the apartment sold in 2004 for $535,000 but has almost doubled in value, helped by a recent renovation that gave it a modern boathouse feel.

A modern renovation helped lift the unit’s value.

Ray White Double Bay principal Michael Finger told The Australian he thought $1 million was a fair figure under the circumstances. Most of the potential buyers were single people aged 25 to 40 years old.

“The view of Elizabeth Bay ­really helped, but it had a certain charm to it and to the right person it would be very special. You’d also end up very fit if you lived there — that’s for sure — with the stairs,” he said.

View of Elizabeth Bay

He said while the Sydney property market was not as inflamed as it was a year ago, it was “still hot”.

Real Estate agent Charlie Mortimer outside the apartment building in Elizabeth Bay, where a 50 sqm roof cavity apartment has sold for $1m. Picture: by James Croucher

The astonishing result comes as Deloitte Access Economics director Chris Richardson warned that the housing bubble could blow and Sydneysiders were most at risk.

Deloitte’s quarterly business outlook released today, noted Australian families were now the world’s second most indebted households after the Swiss, relative to income.

Mr Richardson told Fairfax the homes of many workers were now making more money than they do. “That’s kind of God’s way of saying: this thing’s gonna blow,” he said.

He said a crisis could be averted if interest rates rose slowly and steadily. But cheap credit and high leverage still posed a risk.