A HOUSE that was ripe for development at Warners Bay attracted a huge result at auction on Saturday, with the property selling $345,000 above its reserve.
The property at 40 Queens Street sold for $1.37 million under the hammer with listing agent Anthony Birt from Global Property Newcastle and Lake Macquarie.
The auction drew 11 registered bidders which mostly comprised of developers who recognsied the potential of the property's large block size and location close to Warners Bay foreshore.
Mr Birt said the strong result and high level of interest in the property prove there is confidence coming back into the market.
"Compared to even 12 months ago, even though the market is softer, I think that building costs are starting to stabalise and there is a bit more optimism on the horizon," Mr Birt said.
"Even though some other parts of the market are still a bit more of a struggle, it seems that developers are pretty enthusiastic for the future."
Mr Birt expects the property will be developed by the buyer as a series of townhouses.
"I don't specifically know what their plans are for the site but the consensus is that it was suitable as a townhouse development," he said.
"Most of the townhouses that have been built along that street usually have four or five nice townhouses.
"Warnes Bay has really high demand for that kind of development because it is central, it's flat and demand for the area is growing."
We spoke with the agent about the auction and the result:
The property: A two-bedroom, one-bathroom home on 1012 square metres centrally located within walking distance to Warners Bay Shopping Village, The Esplanade cafe strip and the foreshore boardwalk. The property offered the potential for multi-dwelling housing with a frontage of 20.1 metres and a depth of 50.3 metres.
The result: The property sold for $1.37 million.
How many registered bidders: We ended up with 11 registrations. Once we had quite a few last-minute registrations I thought that we were perhaps going to do better than we expected, and we did. Eleven registered bidders is a lot in this current market and it was almost all developers. Most of the bidders who were putting their hands up were from Sydney but it ended up being a local developer who bought it in the end.
Can you set the scene at the auction? It was held on-site on Saturday and there were a lot of last-minute registrations. We had a couple of people turn up that we hadn't even dealt with prior to the auction who registered on the spot. There was a big crowd out the back, so for this softer market, it was quite a surprise. There were 30 people in the backyard watching on and plenty of people putting their hand up for bids so it was like the good old days.
How did the auction unfold? It started at $900,000 which was probably lower than I would have liked it to start. It crept up and just kept going, so there were 47 bids in total. The auction went on for about half an hour and it started slow. It slowed down a couple of times and a few people dropped out at around $1.2 million, which was probably around where I thought it might finish. There were four or five participating initially and then the others dropped out by $1.2 million and then there were just two. There were a couple of people that really wanted it though and they just kept on going. One of the bidders was online from Sydney and the other was a local guy who was there on-site. It was $10,000 bids up until about $1.15 million and then it was $5,000 bids so there were no big jumps. It was a slow crawl to the top.
Where was the buyer from? He was a local developer. Sometimes you get these buyers who give the sense that they have turned up to buy it. He had his chair and sat down and got comfortable, and he was right up the front and kept putting his hand up and didn't quit. He said to me at the end 'I've never lost an auction' so it was a 100 per cent success rate for him. He obviously was doing whatever it took to secure the property.
Was the result a surprise? It is always really hard to predict with development sites because every developer has their own ideas and levels of risk. Before the auction, we had interest that was at around $1 million or just over. I was hoping we might do better than that but to get up to nearly $1.4 million was certainly a surprising result. It was definitely well above expectations.
