Agent defends listing after selling Melbourne garage for $391,000
The unique 55sqm space attracted a lot of interest which led to a competitive auction.
If you thought the near $100,000 guide price for a garage space in Melbourne was mad, then the price it sold for at auction over the weekend will certainly make you cringe.
Dozens of first-home buyers all had their eye on the 55-square-metre garage space in the beachside suburb of St Kilda, with hopes to turn it into a unique place to live. But in the end it was a car enthusiast that bought the property on Saturday for an eye-watering $391,000 – almost four times more than the initial asking price.
The garage space attracted plenty of interest over the past three weeks because it was "a great opportunity for somebody to get into the marketplace", selling agent Andrew Turner told Yahoo News Australia. The unconventional space could easily be turned into "quite a smart-looking beachside pad," he said last week, making it appealing to a wide range of bidders.
Property sold for more than expected, says agent
While $100,000 may seem a lot for a garage, it's significantly less than a unit in the inner-city area which has a median price of $567,070, according to property data on realestate.com.au. Mr Turner, from Jellis Craig, concluded the high sale price came down to the "uniqueness" of the garage and the fact they don't come up too often.
"We didn’t expect that," he told Yahoo News on Monday. "We knew we had a lot of interest, we knew it was going to sell, but it was just a matter of who was going to buy it and how much the market was going to pay for it."
Agent denies the property was underquoted
Mr Turner shut down suggestions the property was "underquoted" — a misleading and unethical tactic often used by real estate agents to boost the number of interested buyers. Some agents have been known to advertise a property at a low price to attract potential buyers and then gradually increase the price up until auction day.
Legally, NSW real estate agents need to provide an estimated selling price with evidence, based on how much similar properties in the area have recently sold for. Similarly, in Victoria, it is illegal for a seller or agent to "misrepresent a property in any way when advertising or marketing that property," Consumer Affairs Victoria states.
But Mr Turner said in this instance there was "no yardstick to go by" because garages like this rarely pop up on the market, particularly one as big as this. He claimed regular garages in the area sell for about $40,000 or $50,000.
"How do you value a garage when there are no comparable sales?" he said, adding, "At the end of the day the market has spoken".
"If we only got to $100,000 it would have been sold, so it’s not a question of would the vendor have sold for $99,000 or $89,000, they probably would have if that was the best offer on the day," he said.
Underquoting properties is an increasing problem
Mr Turner said property agents have "no control" over the starting bid which in this case was $100,000. It jumped up to $120,000, then $150,000, he said, "then it just took off".
According to Finder, 2021 data indicated that some agents in NSW and VIC were underquoting by 20-30 per cent prompting. The growing trend prompted NSW Fair Trading to step in and penalise agents deliberately underquoting properties. Those caught doing it could face fines of up to $22,000. They could also lose their commission, and face jail.
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