An 'unliveable shack that must be demolished' just sold for $1.1 million in Sydney after a bidding war. It shows how messed up Australia's housing market has become.

• An "unliveable shack that must be demolished" in a Sydney suburb just sold for $1.1 million.
• The three-bedroom home had been left vacant and had become derelict, the selling agent told Insider.

In Australia, the going rate for an "unliveable shack that must be demolished" is in the millions.

A property listed with that description sold for just shy of 1.6 million Australian dollars, or $1.1 million, in Mona Vale, a suburb north of Sydney, according to the property's listing page.

"The house is falling down, but what an opportunity to design and build your dream architectural home in one of the northern beach's most sought-after locations," the property advertisement states, adding that site offers "more than 1,000sqm of land with water views across McCarrs Creek to Ku-ring-gai national park."

The home had three bedrooms, but they weren't "liveable," as the house had been left vacant and had become derelict, selling agent Juliet Wills from LJ Hooker Mona Vale told Insider.

Safety was an issue in the house, so the property was sold at land value, she added.

The agent shared pictures of the dilapidated house with Insider. One photo shows a gaping hole in the ceiling.

Wills said five bidders had registered for the auction held on May 6. The pricing guide was AU$1.2 million, and bidding started at AU$1.25 million, according to a video of the bidding posted on YouTube.

In the end, a phone bidder who currently lives in the "inner suburb of Sydney and wanted a change of lifestyle" won the bid for the property, Wills said.

Home prices in Australia rose for a second straight month in April, Bloomberg reported on Tuesday. However, with the exception of cities like Adelaide and Perth, national property rates dipped 8% year-on-year, per data compiled by property data company CoreLogic, ABC News reported.

The market doesn't show signs of cooling, Wills said: "Based on the current trend, the market is moving into an upswing for the rest of 2023."

This isn't Australia's first high-ticket tear-down property to make the news.

On May 18, a "dilapidated" home in Paddington, an upscale suburb in eastern Sydney, sold for AU$1.53 million, according to a news.com.au report. There were ten bidders for the "unliveable" three-bedroom house, which had been deemed too dangerous for inspections, per the report.

And in 2018, a derelict home in Sydney's Newton neighborhood sold for AU$1.1 million, reportedly shocking the seller, who was expecting a lower sale price, per CNN.