Prestige Real Estate Sales On The Rise in Sydney’s East
Sydney’s prestige market continues to surge in 2021.
We look at the data and trends underpinning the luxury real estate market.
Sydney’s prestige property market has been busy over the past 12 months. In fact, according to the Knight Frank Wealth Report 2021, there was more activity at the top end of our real estate market in September 2020, than during any other quarterly period.
When you consider that over the past year we’ve experienced a pandemic, lockdowns, business closures and our only recession since the early 1990s, that’s a remarkable vote of confidence in premium Sydney real estate.
Interestingly, the report also argues that house prices overall are rising because of the pandemic, not despite it and that prices will continue to rise over 2021.
The difference between the prestige market and other markets
The boost to activity in the prestige market is even more remarkable when you consider that record low-interest rates, which are driving much of the current property boom, don’t have the same impact on the premium property market. While some high-end buyers will finance their purchase with a mortgage, cash buyers are more common in this market segment than in any other.
Instead, Sydney’s buoyant prestige market is being driven by factors such as high performing share markets, strong post-recession economic growth and, perhaps most importantly, Sydney’s growing lifestyle reputation in light of COVID-19.
And it looks like the luxury property market is not alone. While the art market took a tumble, Knight Frank also reported that investors continued to find key collectible luxury assets appealing over the past year, which drove prices up for things like handbags (which increased 17%), fine wine (up 13%) and classic cars (rising 6%).
Who’s buying in Sydney’s prestige property market?
With that in mind, we’ve noticed that there are two dominant types of buyers at the top end of the market over the past year.
As we reported recently, the first group of buyers are ex-pat Australians who are looking to either return home or invest in a second home in Australia. These buyers tend to be based in global centres such as New York, Los Angeles, London and Hong Kong. They often own their own business or work in sectors such as finance, entertainment or fashion. Many are looking enviously at the Sydney lifestyle and the relaxed freedom we enjoy compared to where they currently live and have decided to buy now before prices rise or circumstances change.
The second group consists of locally-based buyers, many of whom are looking to take a step up from their current homes. These buyers, like all of us, have been spending a lot more time at home recently, often working remotely. This has given them the appreciation for the importance of having a good base, and they’re willing to outlay more money to obtain one. In this part of the market, that usually means an architect-designed or architecturally significant home – often with a view.
Buying in Sydney’s premium property market
Just as different factors drive the premium property market, the sales process can work a little differently in the prestige market too.
For starters, although prestige homes are sometimes auctioned, it’s not the norm. Instead, many properties never actually make it onto the open market. Buyers and sellers in the prestige market tend to guard their privacy, so you often won’t see ‘For Sale’ signs in front of a prestige home or even see them advertised online and in the pages of Domain. Instead, properties are frequently sold off-market, with the real estate agent only contacting select buyers (and buyer’s agents) who they know are likely to be genuinely interested.
Because the buyer group is much smaller for high-end properties than it is for cheaper homes, premium properties often also sit on the market for longer. You don’t expect to see the short, sharp six-week campaigns real estate agents favour for less expensive homes. While the right home at the right time will sell quickly, it’s not unusual for a sale to take several months.
Finally, the more unique the high-end property is, the harder it can be to accurately gauge its value due to a lack of comparable sales, so there can also be more negotiation between buyer and seller. Having the right real estate agent working for you in this part of the market really can be a million-dollar decision, or potentially even a multi-million dollar one.
What’s been selling in Sydney’s premium market over the past 12 months?
As with most other market segments, demand for prestige properties is outstripping supply, so prestige properties are selling strongly. While we can’t reveal all our recent sales due to privacy reasons, here are some of the highlights over the past year:
This architect-designed, waterside, 3 bedroom apartment has stunning views, house-like proportions and is set in a garden oasis. Read more about living in Rose Bay.
Set on 500sqm, ‘Italianate House’ is a one-of-a-kind 4 bedroom residence that beautifully showcases the renowned architectural mastery of Renato D’Ettorre. Read more about living in Surry Hills.
Combining classical elegance with contemporary style and functionality, this stunning 5 bedroom manor offers the perfect blend of flexibility in family living. Read more about living in Bellevue Hill.
If you’re looking to buy or sell in Sydney’s Eastern Suburbs, don’t hesitate to get in touch with our team today.