No more landlord niggles, as RBA lists excess $4 million Kirribilli residential property

The Reserve Bank of Australia has listed a near harbourside, residential mansion in Sydney's Kirribilli.

The six bedroom Federation, Eversley mansion on 920 square metres at 10 Carabella Street has been listed through Ray White agent Kingsley Yates for March 22 auction.

It's been across international wire services since Bloomberg News wrote the story, with property blogging conspiracists going into overdrive ever since.

No price guide has been given on the heritage listed home, but I'd expect it could almost double the Kirribilli median house price of $2.25 million as the street's longtime substantial five bedroom offering, entreprenuer Simon Clausen's Burnleigh, the 1875 landmark home on 810 square metres, remains listed with $4.4 million pricing hopes.

The timing might possibly be prescient with home prices currently at record levels, but I am aware that in recent years the property has been beset with pesky landlord issues taking up much of the central bank's time.

Issues including leaking taps, pathway descaling, problematic cistern, dangerous tree limb decay, low pressure hot and cold shower water, hazmat requirements, leaking roof tiles, balustrade compliance, damp kitchen ceiling, decaying front garden fencing, the back fence replacement, bathroom grouting issues, possums in the fiddlewood tree, beeping fire alarm on the first floor, and the failing light above the sandstone stairs that meant the steps were dangerous. At one point rental abatement was given.

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Some of the landlord-tenant issues apparently even needing the governor Glenn Stevens' attention over the past few years or so. They quite simply have better things to do with their time and money.  

There was already a $180,000 refurbishment in 2011 and some $140,000 estimated to repair the bathrooms more recently.

The now renovated and refurbished house, split into two apartments, is one of an estimated 70 freestanding homes in the suburb. It is a two storey brick house with multi-gabled slate roof, plus timber shingles to gable ends and verandahs. There is stone voussoirs to large semi-circular leadlighted window and leadlight at entry porch. The upstairs has around 199 square metres of space - at a $1,125 weekly rental. There was 218 square metres of space downstairs - with the rental details not known by me as it was on an expired lease arrangement.

Let's say the rental yield - from my back of an envelope calculations - was 2.9% - hardly the right signal of the bank who wantas to convey fiscal wisdom.  

But it was a great asset as it was bought in April 1986 under Bob Johnston's governorship just before the Sydney market took off in its record boom for $630,000. I recall it was snapped up within two weeks of its 1986 listing as it provided not only a landbanking opportunity for the central bank, but also to provide overflow accomodation for lecturers participating in the 1988 SEANZA conference. Only oldtimer RBA watchers like Alan Mitchell, Ross Greenwood and Terry McCrann would know the establishment of South East Asia, New Zealand, Australia (SEANZA) grew out of a 1956 meeting of central bank governors from the Asia-Oceanic region. 

Ensuring the landbanking opportunity, the RBA also bought next door, 8 Carabella Street in the very next month, May 1986 for $575,000, which was 14 flats in a historic building with three storey Italianate tower on 799 square metres. Its heritage listing describes it as having simplified Italianate details used with restraint. It was incorporated into the bank's then conference centre plans for its longtime holding at 112a Kirribilli Street, joined by a two level brick-walled passage between 8 Carabella Street and the large new development adjacent.

The property adjacent to 8 Carabella Street is the RBA's training and conference property, the H.C. Coombs Centre for Financial Studies on Kirribilli Avenue.  The centre has 30 guest rooms – 12 with harbour views and 18 with garden views.

The site where the H.C. Coombs Centre for Financial Studies now stands originally housed a guest house but following its acquisition by the Commonwealth Bank the building was turned into a residential training college for staff.

The Reserve Bank inherited the building in 1960 using the premises to host interstate staff employed by the Bank at residential courses.

The tenants of one of the apartments within 10 Carabella Street gave notice of their plans to vacate in mid-2013, but the other tenant wanted to stay despite the poor bathroom, and even sought to buy it off the bank directly.

“The bathroom works have been planned for some time and for this reason, the latest lease term of one year was offered," bank email correspondence shows.

“I note your request to negotiate off market for the acquisition of the property, if the bank decided to sell it for reasons of probity and in the taxpayers' interests, it would approach the market transparently and at arm's length.

"It would be improper for the bank to negotiate a sale that was not transparent and it would not do so” emailed Linh Gutierrez, the RBA senior manager property services.

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Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.


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