Homes Above $4 Million: The Property Market That Just Won’t Stop
The upper end of Sydney’s eastern suburbs real estate market is incredibly busy right now.
Properties worth more than $4 million are in high demand. Many are selling before auction, sometimes within a matter of days.
So what is driving the activity at the top of the market?
Who is buying properties over $4 million?
There are two main demographics that we’ve noticed out in force at the moment.
The first group are upsizers who have cashed in around the $2 million bracket and are currently renting or looking to make the jump to the $4 million bracket to a bigger property.
The second group are downsizers on the other side of the property journey. These are buyers who have sold a larger family home or property and are looking to move into an easier to manage lock-up-and-leave lifestyle property in the $4-$6 million bracket.
What kinds of properties are in demand?
In the $4 million-plus price range, we are seeing strong demand for three kinds of eastern suburbs properties: freestanding houses, luxury apartments and terrace houses.
Listing volumes for these properties are low and they’re also selling well, with far fewer days on market than average.
Upsizers are snapping up larger freestanding family homes from Woollahra to Watsons Bay and the eastern beaches. Comparatively, we’re seeing more demand for these prestige $4 million homes than those in the bracket below, priced at $2-$4 million.
Some suburbs in the east already have median house prices above $4 million, including Bellevue Hill, Darling Point and Vaucluse.
Downsizers are a huge force in the market in Sydney’s east – dominating the top end of the small home market, and pushing up the luxury apartment market. They are competing for coveted luxury apartments from Potts Point to Rose Bay, or high spec terrace houses in inner areas like Paddington and Woollahra.
And overall the market is delivering particularly good results right now for harbourside and beachside properties of these kinds.
What’s driving activity this price point?
Because we’ve had such a strong market in the past few years, many upsizers have received a great price for their property, and now have more money to spend. The competition in the market, and strong prices received below $4 million, has allowed more buyers to take a step up the property ladder.
On the other side, downsizers have deeper pockets than many of their competitors, and there simply aren’t enough luxury, high end, small properties in Sydney’s east to meet the demand from them. So this demographic is also competitive and fiercely fought.
The combined pressure from both these demographics acting at once is driving up demand for all properties over $4 million.
How properties worth more than $4 million are being sold
Finally, it’s worth noting that the top end of the market isn’t necessarily a hotbed of highly contested auctions.
This segment often values discretion, almost above anything else. That means increasingly transactions for properties over the $4 million mark happen off-market, adding to the competition. In fact, in the first half of 2017, 53% of our team’s sales came from off-market sales, and these were all properties worth $4 million or more.