A 'knockdown' house on the market for $699,000 shows Brisbane's house market is still strong

In Brisbane's north-western suburbs, a house with a price tag of nearly $700,000 AUD is prompting potential buyers to consider: renovate or demolish? The dilapidated two-bedroom home at 62 Blackwood Road, Mitchelton, is surrounded by rubbish and old white goods, and is almost hidden by overgrown weeds.

Photos of the interior reveal walls covered in graffiti, a moldy ceiling, and broken windows covered with cardboard. According to the online property listing, the 412-square-meter property is being sold "as is," and offers a "rare opportunity to exercise your creative vision." The median house price in Mitchelton is $1.115 million AUD, having grown by 10.9% in the past 12 months.

Real estate agent Hayden Denovan, who is responsible for selling the house, stated that the asking price of $699,000 AUD is considered an "extremely low entry level" in today's market. He said, "It's probably been 18 months to two years since we last saw a house price starting with a six. In fact, we've sold apartments for more than this block of land and house in Mitchelton."

According to the latest statistics, the property has already received "four to five" offers. Mr. Denovan stated that the level of interest in this house is six times that of other houses in the area. "From a future growth perspective, I think it's a fantastic opportunity for someone who is eager to roll up their sleeves, work hard, and profit from it." The property was last sold in May 1993 for $96,000 AUD.

Ray White Chief Economist Nerida Conisbee stated that most potential buyers are likely more focused on the land's value rather than the house itself. "It's a good option because it's quite clear that it's very dilapidated, and there wouldn't be much objection to demolishing it." Housing pressures remain high in South-East Queensland due to an influx of interstate and international migrants post-pandemic.

Ms. Conisbee stated that the construction industry is being pulled in different directions, making the situation worse. "You've got the Olympics, commercial building, and repairing flood-affected properties, and at the same time, there are not enough workers, and the industry needs more workers. But to get more workers into the state, you need more housing." This cyclical problem means that the cost of demolishing and rebuilding is higher than ever.

"I think if it were me, I'd be looking at building something beautiful, but that would be the biggest hurdle at the moment. You could be waiting a very long time to find a builder who is available," she said. Over the past four years, the cost of building a house has risen sharply, with construction costs increasing by as much as 50%. Ms. Conisbee said, "It might be cheaper to buy an already built house than to try and go down that path."