The five reasons why Millers Point prices are red hot, as terrace record hits $3.95 million

A Millers Point property at 11 Lower Fort Street set a new suburb terrace record, selling for $3.95 million at auction last night.

The five bedroom home had been listed at more than $2.6 million, then $2.7 million in published marketing ahead of the auction.

The sale price was at the higher end of the onthehouse moderate guess range: $3,525,000 - $3,975,000.

The second Millers Point offering at 23 Lower Fort Street sold for $2,685,000.

The smaller four bedroom home was tipped to fetch more than $1.7 million.

The two Millers Point terraces were sold off by the NSW state government.

The 11 Lower Fort Street, Ballara (pictured above), was a five bedroom, four level offering.

The other property at 23 Lower Fort Street (pictured below) was the 1830 Georgian town home, Tarra which boasts an impressive frontage and captures views of the Opera House.

A Government Property NSW spokesperson advised Property Observer that prior to being listed on the market the properties in Millers Point were individually valued by an independent qualified valuer who has no involvement with the sales process. 

Valuations were done on the basis of a freehold sale and current condition.  

The sales agents were not provided with the valuations. 

"The price guides are set by agents based on market feedback," the spokesperson said.  

There had been just the two prior freehold sales, topping out at $2.56 million, with both sales causing headlines as the sale prices were also well above the privately offered price guidance.  

A survey of agents by Property Observer suggests the initial four sales to date - that will assist in setting the market - were a result of the the combined circumstances, including:

• The somewhat dramatic recent overall Sydney market price improvement;
  
• The massive media exposure arising from the state government's decision to sell what has been until recently almost an exclusive housing commission enclave;
  
• The emerging Barangaroo effect;
  
• The big price difference between the prior 2009-2011 leasehold offerings (see published prices below) and the current freehold offerings;
  
• Australia's aversion to leasehold. With the 99-year lease there was a requirement of a nominated schedule of repair works, which had to be completed within two years along with heritage architects and heritage tradespeople that had to be used. Those who bought leasehold properties had to pay an essential works bond, as high as $200,000.

   

   

  The first state-owned property at Millers Point at 119 Kent Street sold in August was the first of the pinpointed 293 public housing properties to be sold off at Millers Point and The Rocks.

Leasehold prices achieved during Labor state government sell off between 2009-2011 included:

Fairfax Media recently suggested the previous record price for a house in Millers Point was set in 2009 when a freehold home on Lower Fort Street sold for $3.05 million.

It now carries an onthehouse estimate of $4,758,800 - $5,366,800 were it to return to the market by its private vendor.

The average price achieved from the first four sales is $2.75 million against the average $1.3 million sale under the leasehold sell-off by the previous government.

The McGrath chief executive John McGrath named Millers Point as his "top pick" of the Sydney buyer opportunities.

Professor Bill Randolph, director of the city futures research centre at the University of NSW, noted in Fairfax Media the rapid speed of gentrification.

"In Redfern, Paddington, Glebe and Balmain it was a slow-burn process of middle-class people buying property from working-class people," he said.

"This is a different process."