Prestige Real Estate Leads The Way In Sydney’s East
In March this year, we wrote about how Sydney’s prestige property market was continuing to surge, despite the pandemic.
Fast forward seven months and the prestige market has become even busier. Not even a 107-day lockdown could put a dent in buyers’ enthusiasm for premium Sydney property.
Mid-year research from Knight Frank shows that prime luxury Sydney property should grow 10% over 2021 – far greater than the three per cent Knight Frank originally forecast in late 2020. While this may seem subdued compared with the Sydney-wide growth rate of around 25% over the past year, remember that 10% on a $10 million home is significantly more money than 25% on a $1 million home.
What is the prestige market and what’s driving it?
Knight Frank defines a prime property as one that is in the top five per cent of dwelling values, which equates to around $3 million across Sydney. However, here in the Eastern Suburbs, that’s probably a little low, given it is less than the suburb average for many places. When we’re marketing a property, we think of the prestige market as that segment that operates independently from the wider property market and is driven by different factors.
It’s that market where low-interest rates stop becoming the main determinant of property prices because there are more cash buyers and fewer home loans. Instead, in the prestige market factors such as share market performance, the amount of M&A activity, the relative value of the Australian Dollar, tax rules and economic growth matter more.
In this market, Sydney’s growing lifestyle reputation in light of COVID-19, has counted for a lot over the past 18 months. Actually, many consider Sydney’s lifestyle to be the key factor contributing to price growth in our local prestige property market.
Anecdotally, we have had strong interest from expat Australians – many of whom work in the banking, tech or entertainment sectors – who are looking to return home and want to buy in the prestige market. Others have been searching for a second home in Australia.
But we’ve also had strong enquiries from local buyers, looking to take the next step up from their current homes. As Knight Frank points out, many wealthy local buyers decided that with borders closed it made more sense to spend money on property in their hometown. Knight Frank also highlights that the past three consecutive quarters have resulted in the highest number of prime sales transactions on record. They forecast that this mounting turnover shows there is still depth in the market for 2022.
A global view
On the global stage, Knight Frank has Sydney leading premium price growth globally in 2021. We sit ahead of Miami (which is next in line at 8% price growth), Los Angeles, New York, Hong Kong, Paris, Geneva, Singapore, Auckland, Madrid and London. In 2022, Knight Frank predicts Sydney will share top spot with London, with prestige properties forecast to rise 7%.
While this may be below the level of general growth, when you’re talking about a home valued at many millions of dollars, 10% price growth can be a very significant windfall.
What’s been selling in Sydney’s premium market over 2021?
Realestate.com.au reports that there are now 70 suburbs across Australia where the median house price is at or above $3 million – Knight Frank’s measure of prime real estate – and most of these are in Sydney. Point Piper tops the list at $15 million, followed by Tamarama at $10.225 million, Centennial Park at $7.38 million and Bellevue Hill at $6.4 million. Double Bay and Vaucluse also make an appearance in the top 10 for suburbs with the highest median price.
Some of these suburbs, such as Bellevue Hill, have experienced an estimated 40% price growth, and some sellers have seen their property’s value double over just two years.
While we can’t reveal all our recent sales due to confidentiality, here are some of the highlights over the past quarter:
If you’re looking to buy or sell in Sydney’s eastern suburbs, don’t hesitate to get in touch with our team today.