SB2000, not all markets have come off over 2 years - outer suburbs of Sydney have, but the mass market (as opposed to top end) inner suburbs are still doing well. There is a one bedroom house on North Sydney going to auction in a couple of weeks which sounds from the ad like it is a little bit rundown - I called the agent for an idea of expected price and was told $700K+. Now that to me is pretty high for a 1 brm house even in North Sydney (esp as I know someone who bought a 2brm house in a better location for $795K last year).
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