Insight

23.03.21  Property News

 

What Buyers And Sellers Can Learn From A $20M Bondi Auction

16/16 Notts Avenue, Bondi Beach achieved a record price for an Australian apartment at auction, selling under the hammer for $20.1M.

Here’s what it can teach us about the current market.

Last weekend unit 16/16 Notts Avenue, Bondi Beach achieved a record price for an Australian apartment at auction, selling under the hammer for $20.1m. We explore the mechanics behind the sale and look at why this property proved to be in such demand.

About the property

By any measure, 16/16 Notts Avenue, Bondi Beach is a very special property. With four bedrooms, four bathrooms, parking for three cars, living space of over 304sqm, and the most incredible views over Bondi Beach, it offers family home-size proportions, along with sleek design, privacy and amazing entertaining spaces.

It really would take some beating and we’d argue that it is Bondi’s very best penthouse.

As the most expensive apartment ever auctioned in Australia, the sale has been widely reported in the media, so why are we talking about it again?

What the sale tells us about the current property market

For starters, the sale of this apartment reveals several key things about the current state of the Sydney property market.

Most obviously it tells us that the prestige market is strong. There is a lot of buyer interest even at this price point and we’re seeing record prices being achieved.

Secondly, it also shows that, even though houses have generally outperformed apartments over the past 12 months, there is strong buyer demand for large three- or four-bedroom units. We’re seeing this across the market but especially at the top end, where there aren’t enough quality apartments on the market to satisfy the demand from families, downsizers, returning ex-pats and others. We also saw this recently in the sale of another waterside prestige apartment at 1/746 New South Head Road, Rose Bay.

Thirdly, it’s worth noting that 16/16 Notts Avenue last sold in June 2016 for $9.8 million. This means it has doubled in value in less than five years, at the same time as the average Bondi unit price has barely changed. In other words, the top of the market has well outperformed the average and the apartment went very close to matching the Bondi suburb record of $21m.

Why run an auction at this price point?

There are also valuable takeaways from the auction itself. After all, it’s typical for properties at this price point to sell by “expressions of interest”. But we didn’t think this was the right strategy for this particular property.

Thanks to a market that’s rising weekly, if not daily, it’s difficult to always calculate an accurate sale price, especially for top-end properties. So, right now, we’re recommending vendors who have listed a property publicly proceed to auction unless they have a very good reason not to. In fact, we’re seeing the market recalibrate before our eyes with unique properties like this one.

This property is simply so unique that we knew there would be interest from local, ex-pat, and overseas buyers. And we wanted everyone to have a chance to buy it in an open and transparent process. We also wanted to open up the property to as wide an audience as possible. Auctions are familiar and, when the market is rising so rapidly, people are usually comfortable putting their best foot forward, confident that they’re not overpaying because others are prepared to bid too.

The sales campaign

To allow for overseas and ex-pat buyer interest, we ran a slightly extended auction campaign, compared to the usual four weeks. We also had a lot of local interest and drew on our extensive database of prospective buyers across Sydney’s East, bringing in different buyers from outside the Bondi market.

The property was immaculately presented. And we drew on our strength in marketing with a well-produced video that promoted the lifestyle. We even facilitated open home inspections at dawn, to show potential purchasers the sunrise.

As we started to get feedback from the campaign we felt confident and knew we were on the right track. So we encouraged the vendor to continue to auction day despite some healthy pre-auction offers. We believed an auction would create an emotive response from buyers and that this would lead to intense competition that would ultimately drive up the price.

What happened on auction day?

On the day itself, there was torrential rain. We couldn’t even see the iconic view of Bondi Beach through the floor-to-ceiling windows, and yet we still had seven parties registered to bid.

When the auction opened the first bid came in at $14.5 million. Then, as the rain belted down, no less than five parties placed bids, driving the price to $16.8 million. At that point, it became a competition between two buyers who pushed the price up to a record-breaking $20.1 million - more than $3m over the reserve.

What are the lessons learned?

Even if the apartment had sold prior to the auction we would have achieved a strong price. But by holding off and letting people bid competitively, the auction achieved a much better result still.

The lesson for vendors is that different tactics work best in different markets and that the best agents can tailor their advice based on their experience in similar situations, as well as their knowledge of the market and the motives of buyers.

16/16 Notts Avenue is a unique apartment, Bondi’s best, and the result certainly shows it.

Want more?

If you’re looking to buy or sell in Sydney’s Eastern Suburbs, don’t hesitate to get in touch with our team today.

Download our 2018/2019
Eastern Suburbs Market Report

Next Insight

Overseas Buyers Are Active But Who Exactly Are They?