This article is from the Australian Property Journal archive
CASHED-up crypto and start-up successes are presenting a younger face to the buying of Australia’s prestige home market, which is expected to weather any potential credit crunch.
According to the latest Herron Todd White Month in Review, in this current market cycle it appears the prestige market may trail then lead the broader market with greater resilience to slowing price growth, higher interest rates, cost-of-living pressures, and poor consumer sentiment.
Historically, when the prestige market has been shaken, slowed or has dropped, it has often been a sign of things to come for the wider market, said Herron Todd White national director of residential, Ben Esau.
“While the $5 million to $10 million markets in Sydney and Melbourne may track more closely to the rest of the market, including the impacts of contractionary market factors noted above, the $10 million-plus and prestige markets across other capital cities are still seeing strong demand coming up against limited stock.
“Across the east coast, well-financed local, overseas (and transitioning) purchasers as well as those whose relatively recent financial success, such as in start-ups or crypto-currency, are also presenting a younger purchaser to create a broad and cashed-up demand pool,” he said.
That was on display to the extreme in August last year when the Victorian house price record was set last by cryptocurrency casino founder, 27-year-old Edward ‘Ed’ Craven paying $80,000,088 for a Toorak house that had sat vacant for more than 30 years. This year, Anna Egorova, partner of crypto identity Michael Egorov, bought the Avon Court luxury estate in Hawthorn – little more than 12 months after the couple bought the next door Italianate mansion Verona for $18.25 million.
“For the prestige market, the traditional market levers that put downward pressure on prices don’t appear to be having the same impact. A potential credit crunch that could close the gate on available capital could instigate a shift in the prestige market but as of today, that doesn’t look likely,” Esau said.
In Sydney’s exclusive eastern suburbs, this year has since increased activity in the prestige space as prices have recovered and in some cases shot past where they were in early 2022.
Between Bronte and Tamarama Beaches, 12 Bronte Marine Drive sold in April 2022 for $17.7 million after a major renovation in 2020, and the three-level, four-bedroom, three-bathroom home with tandem garage and pool then sold in July for around $22.5 million – an increase of over 27% in just over 15 months.
Notable trophy home sales in the east during 2023 include the oceanfront reserve home at 31 Gaerloch Avenue, Tamarama, which sold in May for $45 million, while there were two sales in Bellevue Hill in May for $61.5 million and $70 million – the latter setting a new suburb record. Nearby in Point Piper, two harbourfront homes sold for $69 million in April and $60 million in June – the latter, waterfront residence Akuna having sold for $45 million in April of 2022, with Sydney FC owner Scott Barlow and wife Anita netting a tidy profit.
The Point Piper residence at 3A Buckhurst Avenue, meanwhile, has been listed for sale with expectations also of circa $60 million.
In the prestige unit space, harbourfront suburbs such as Rose Bay, Point Piper, Double Bay and Darling Point remain popular with downsizers, with a $20 million sale registered in Paddington and $16 million paid for the part-renovated penthouse unit in a Darling Point complex of six at 48 Mona Road.
Back in Melbourne, standout sales of the year included the penthouse in new development Sapphire by the Gardens, at 308 Exhibition Street in the CBD, which sold for $39 million. Early this year, a sub-penthouse in Beulah’s Sth Bnk development – Australia’s future tallest tower – sold for $38 million.
As at mid-October there were 43 listings of houses in the eastern suburbs with an asking price above $15 million on realestate.com.au, which Esau said indicated that this year’s activity in the trophy home market is set to continue for the remainder of 2023 and into 2024.
In Brisbane, sales of $5 million and above have increased year-on-year, with 56 sales recorded so far, already ahead of 2022’s 46.
“Not so long ago, the idea of regular $5 million to $10 million transactions would have had the industry buzzing. That sort of money was reserved for the likes of Sydney and Melbourne! But we are in a new era in Brisbane,” Esau said.
“”Obviously, we face the same economic struggles as everywhere else in the nation, but with some major highlights on the horizon (i.e. the 2032 Olympics), it’s easy to see why those with deep pockets and lavish tastes are OK with putting serious dough into buying a Brisbane home.”
Amity House at 101 Welsby Road in New Farm achieved a new Brisbane record this year after going under contract for $20.5 million. The 2,127 sqm parcel is across three titles – including a vacant block that could be onsold or developed immediately and is improved by historic colonial home built by prominent Brisbane figure Thomas Welsby in 1892.
