The real reason an inner-Sydney car space sold for $260,000 has been revealed – and it wasn’t just real estate madness at work.
The record-breaking sale of the residential car space in Potts Point for $264,000 in May shocked market observers after bidding opened at $120,000.
But a federal parliamentary hearing into home ownership has heard that the astronomical price – reportedly the result of a bidding battle between two locals – wasn’t just another example of the city’s overheated property market.
Christopher Curtis, a property adviser and buyer’s agent, told the committee hearing in Sydney that he had gone to the auction “to see the lunacy that would prevail”.
“The lunacy did prevail,” Mr Curtis said.
“Whether it was a clash of egos or otherwise – what explained why a car space in a densely populated area would go for the same price as a cottage somewhere further afield?
“We understand that, actually, the motivation for paying that sort of price was the belief or hope that that space would accommodate two cars.”
Real estate website Property Observer reported at the time that the car space was longer than normal.
Mr Curtis, who was critical in his testimony of the quality of real estate industry pricing data, said the case was an example of the unreliability of the information so many people used.
“You have a situation where you say the price of car spaces – and they’re not frequently traded in that district – has gone up exponentially, doubled in two years. That’s not fact,” he said.
Mr Curtis said median prices were not reliable indicators of housing market conditions because they didn’t adequately account for changes in the quality of the median house.
He also criticised the “obsession” with auctions despite their accounting for only a quarter of real estate sales in Sydney each week.
In a submission to the committee, he said it was astonishing housing policy and interest rate settings were so influenced by data from selling agents and “industry sources having a vested interest in conveying the impression of a consistently buoyant market”.