Unrenovated terrace takes Paddington prices backwards

It says enter at own risk, but one brave buyer secured a derelict terrace in Sydney's Paddington after it was passed in at auction recently.

Agents had been seeking offers of more than $1.63 million for the Windsor Street property which had the sold sticker posted yesterday. It previously traded for $1.895 million in 2009.

“It passed in on a $1.5 million vendor bid. We had four registered bidders, but no one did anything on the day,” says BradfieldCleary Double Bay agent Mark Daley.

"We’ve got an offer on it now. I’m confident it will move pretty quickly now. Especially with the price next door," he said shortly after the auction. 

The neighbouring terrace sold last November for $1,825,000, and Daley says it was in just slightly better condition and required a full renovation.

Though derelict, the recently sold terrace comes with approved plans for a Zoltan Kovacs Architects-designed three-bedroom, 3.5-bathroom home.

Daley says after renovations the house would likely sell for more than $3 million.

The plans were approved in late 2010 and will lapse in late 2015.

Daley says it could cost anywhere from $500,000 to $1 million to realise the plans.

He says most interested parties were those looking to live in the house.

"We’re usually finding that people are buying them to live in because the builders want too much of a discount because they want to leave in a profit margin for when they sell it on."

The three bedroom home sits on 146 square metres.