08.23.2023 Lifestyle

Prestige Apartments in Sydney’s Eastern Suburbs

Prestige Apartments in Sydney’s Eastern Suburbs

Increasingly, the apartment market is not one market but many.

That means the trends and drivers affecting, say, the market in inner-Eastern Suburbs studios can be very different from those affecting the market in oceanfront penthouses.

One segment that has been booming for several years – and shows no sign of slowing down – is the market in the large, prestige apartments, including penthouses. We explore what’s behind this Eastern Suburbs trend.

The traditional market for Eastern Suburbs apartments

Traditionally, two types of buyers have dominated the apartment market in Sydney’s Eastern Suburbs: first-home buyers and investors.

These buyers have tended to look for entry-level apartments, costing anything from half a million dollars to about three times that.

Entry-level apartments allow buyers to get into a great location for much cheaper than a house. For example, the median house price in Paddington is $2.925 million, while the median apartment price is $827,500.

Given both first home buyers and investors tend to buy using finance, it is this market, however, that has been most impacted by rising interest rates. Reduced borrowing power and higher mortgage repayments have led to price drops in some suburbs. For example, two-bedroom apartments in Darling Point have lost -27.7% over the past year, while three-bedroom apartments have risen 12.4%.

The buyer demographic attracted to prestige apartments

As the Darling Point example shows, it’s a completely different story for larger apartments at the premium end of the market in Sydney’s Eastern Suburbs.

Traditionally, demand for property in this segment has been driven by downsizers.

However, increasingly we’re seeing other demographics who may be seeking a different lifestyle from what a house can offer, one that’s often more luxurious, lower maintenance and closer to the action than most houses.

These buyers include expats, families, and others looking for the wow factor that a prestige apartment can offer.

And, they’re prepared to pay. In some suburbs, large apartments sell for similar prices to a small house. For example, a three bedroom apartment in Edgecliff has a median of $2.6275 million, which is practically the same as the median house price in Edgecliff, of $2.6005 million.

Rising demand pushing up prices for oversized, luxury apartments

It’s not just demand pushing up prices though, lack of supply is contributing too. There simply are not enough large, luxury apartments to satisfy buyer demand.

This is being further fuelled by rising construction costs, and a relatively low number of new developments (particularly developments with large apartments that downsizers find appealing) coming onto the market.

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In Rose Bay, for instance, the median for a three-bedroom apartment value is $2.261 million while in Edgecliff it’s currently $2.6275 million. In Woollahra, it’s $2.76 million, and in Bondi Beach it’s $2.9 million. In Double Bay, it rises to $3.35 million.

However, in Darling Point prices skew much higher with three-bedroom apartments selling for a median of $4.75 million. And, in popular Potts Point it’s higher again, at $5.925 million, as buyers seek out convenient, oversized apartments with views and all the bells and whistles.

Record breaking apartments

We’re also seeing prestige apartments change hands for record prices.

A case in point is 16/16 Notts Avenue, Bondi Beach. When we sold this property under the hammer for $20.1 million in 2021, we set the record price for an Australian apartment at auction.

A more recent trend we’ve observed is for high-end apartments to outperform houses when it comes to setting records – by a considerable distance too. Our sale of 10/18 Flinton Street Paddington, smashed the suburb record when it sold for $20 million in June 2023. The previous suburb record was $12 million for 175 Underwood Street, a four-bedroom house we sold in 2021.

Further illustrating the trend for top-end apartments to outperform houses is the fact that the most expensive residential property ever sold in the country is not a house. It’s a penthouse comprising the top three floors of the as yet unfinished One Sydney Harbour at Barangaroo South, which is reported to have sold for $140 million in 2022.

The prestige market is booming

Another factor in the popularity of these apartments is the strength of the prestige market generally. Over 2023, Sydney’s prestige market has exceeded expectations, unaffected by high-interest rates and generally flatter property market conditions.

Knight Frank’s recent Global Super-Prime Intelligence report has Sydney ranked 9th globally for the number of “super-prime sales” over US$10 million over the past 12 months. In fact, over the first quarter of this year, it recorded 10 properties that changed hands for more than this. For the past 12 months, a total of 76 sales worth US$1.233 billion fell into this category, for an average sale price of US$16.2 million.

Recent prestige apartment listings

5/18A Albert Street, Edgecliff is a fabulous example of a large, premium apartment. Offering three bedrooms, two and a half bathrooms, and lift access to secure double parking, this whole-floor luxe apartment is in a boutique block. It also boasts picturesque north-facing harbour views. It was auctioned in August 2023, after the successful sale of its neighbour, 4/18A Albert Street, Edgecliff in June.

29/42 Flinton Street, Paddington is located in the tightly-held “Paddington Green” building. This apartment offers four bedrooms, triple parking, panoramic views, designer finishes and generous outdoor terraces making it more like a house-sized living with 336 sqm on the title.

1/24 Stafford Street, Double Bay epitomises luxury apartment living. Embracing a beachfront position, this privately accessed garden apartment offers level access to the property, parking, and Double Bay Village, and features a luxurious master suite alongside two additional bedrooms. It was sold prior to the auction in August 2023.

Want more?

If you’re interested in finding out more about the Eastern Suburbs harbourside property market, get in touch.