1 Augustus St Enmore Auction
With a price guide just $25,000 above what the owner paid 3.5 years ago, the vendor was seriously at risk of selling this home at a loss...
The property
1 Augustus St Enmore is a 3 bedroom free standing cute federation style terrace. It sits on a quiet street, yet only moments away from the hustle and bustle of Enmore and Newtown.
3 small bedrooms, 1 bathroom (always challenging for a 3 bedroom home), but the added luxury of two off street parking spaces.
The current owner had purchased it 3.5 years ago for $1,575,000 in a similar condition to how it came back onto the market.
Was the Vendor at risk of selling at a loss?
Absolutely. Property should never be a short term investment. In part because they had paid $72,000 in stamp duty, and likely another $20,000 - $30,000 to sell the home (agent fees + marketing + styled furniture). Not to mention the interest on their home loan. Call it $100,000 was needed on top of their 2019 purchase price to break even.
A purchase price of $1,675,000 was needed to reach 'break even'.
Price Guide
The price guide was $1,600,000, reflective of the market, albeit nothing really similar had sold in Enmore the previous 3 months.
A 3 bedroom, dual level, had sold up the other end of the street 4 months ago for $1.8m (without parking) | 43 Augustus St Enmore.
Active bidders
Three registered bidders and all active on the day
Person 1 tried to start the auction at $1,500,000 but given the guide of $1.6m, was forced to open at $1,550,000. Person 1 was out at $1,650,000.
Person 2 was in the mix the whole auction - competing with Person 1 and just when they thought they had it, in comes Person 3. It looked like they had planned to stop at $1.7m, but threw in a few extra bids for good measure
Person 3 never really seemed that confident in their bidding, but did walk away with the keys.
The property appeared to hit the reserve price, also known as ‘on the market’, somewhere around the $1,680,000 - $1,700,000 mark. This also aligns with the vendors likely ‘break even’ point.
The result
Sold to person 3 for $1,740,000.
Comparing the result to the suburb median
Over the same period the current vendor owned the property, the median price for 3 bedroom homes in Enmore increased by 27%*. All of these gains were realised through 2020 and 2021, with prices remaining flat through 2022. The simple virtue of very limited supply contributes to the price remaining stable when other parts of the market were in decline.
1 Augustus St Enmore has performed with a 10% increase in price over the same period.
Effectively the Return on Investment was pretty poor, ~$21,000 per year on a $1,575,000 upfront investment.
Why has it performed worse than the suburb median?
Firstly, on very limited data these numbers often reflect a trend and are not as accurate when applied at an individual property level.
Secondly, the groups of buyers the property would have appealed to was limited. A 3 bed 1 bath:
Investors are not interested; not enough rental appeal with the 1 bathroom
Young families; also want a 2nd bathroom and would be deterred by the very small bedrooms
First home buyers; in Enmore, they are usually priced out of the market over $1.5m
Retirees; perhaps would have considered
Couple no kids; would have considered
*Source: Domain https://www.domain.com.au/suburb-profile/enmore-nsw-2042