Surry Hills auction price silliness won't necessarily be contagious

There is no doubting the auction momentum.

What started out last spring as good clearance rates has well and truly turned into market strength - though not in every Sydney pocket and price bracket.

There are however increasing signs of auction price silliness.

Take the weekend's $840,000 unrenovated, almost unlivable Surry Hills terrace sale.

It was simply over the top for the 51 square metre Campbell Street offering with 67 square metre of floor area.

One just has to look two doors away - and 11 months ago - to see where the pricing ought have been with a $765,000 renovated terrace sale (pictured below), on 54 square metres with 88 square metres in floor area, which also sold in 2010 at $688,000 after its renovations.

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Things weren't helped with the Ray White agency telling buyers the expectations were around $550,000.

Offered to the market for the first time in almost 50 years, the two level terrace holds mixed commercial/residential use zoning.

It was a blank canvas with inspiring potential, ideal for a home or boutique business close to Chinatown, according to its marketing agents Shaun Burdo and Jack McGhee.

At 88 Campbell Street (pictured below centre with open door) - with eight being an auspicious number of fortune in Chinese culture - no surprises there was the keenest of Chinese bidding for the property.

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But don't expect every other Surry Hills offering to all follow suit price wise. 

And as for those high clearance rates? Barring any sizable shift in the supply and demand, the only force to rein in auction success rates this spring will be the emergence of overly expectant vendors.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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