02.16.2022 Suburb Spotlight

The Eastern Suburbs Prestige Market In 2022

The Eastern Suburbs Prestige Market In 2022

Sydney’s prestige property market has been going from strength to strength in recent years, recording its best-ever performance in 2021.

Now that the new year is well and truly underway, what can we expect from the eastern suburbs’ prestige market in 2022?

Last year we saw Sydney’s prestige property market record its best-ever performance, with more than 45 sales over $20 million. Now that the new year is in full swing, what can we expect from this market segment in 2022?

What happened in the eastern suburbs’ prestige market in 2021?

While Sydney real estate performed strongly across the board last year, the prestige sector recorded its best results ever.

By the beginning of October, there had been 170 sales in the $10 million-plus range, 30 more than the same period in 2020, according to the NAB’s Luxury Property Market Update. Meanwhile, the Sydney Morning Herald reports that by the end of the year, there had been more than 45 sales in excess of $20 million, more than double the record set in 2018. The top 20 sales of 2021 totalled $691.5 million, outstripping the results of the last prestige boom in 2018 when the top 20 sales came to $672 million. Knight Frank’s Australian Prime Residential Review reports that Sydney prestige property’s annual growth was 10.7 per cent over the year ending September 2021, putting it above the global average of 9.5 per cent and trending well above world cities such as Paris, London and New York.

Sydney’s eastern suburbs are home to many luxury residences, and 18 of 2021’s top 20 house sales took place in the eastern suburbs across suburbs including Woollahra, Vaucluse, Double Bay, Point Piper, Rose Bay or Bellevue Hill, while Bronte and Tamarama also recorded premium sales. The prestige boom saw suburb records tumble, including in Woollahra, where our sale of historic Rosemont both set a new suburb record and took out the accolade of Sydney’s top house sale of 2021. While grand family residences were undoubtedly in demand last year, reflecting the COVID real estate trend for larger homes, ultra-premium apartments also sold for record prices.

What’s been driving the prestige boom?

A shortage of prestige homes for sale was one of the driving factors behind last year’s strong results, according to the NAB’s report, with demand for luxury homes simply outstripping supply. The dearth of listings has been an issue for the prestige sector for some time, as we wrote about back in 2020. Last year’s demand came from both returning ex-pats and locals looking to invest in premium property, with some buyers redirecting travel funds towards property purchases. And although we’ve written in the past about how the factors propelling the prestige sector differ from those that drive the mainstream real estate market, in 2021, record low-interest rates had an impact on both market segments. The NAB report names low borrowing costs as a contributor to last year’s luxury market boom, just as they were a major factor in the mainstream real estate market’s record-breaking year.

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What can we expect from the prestige market in 2022?

Although last year’s results were exceptional, they were no flash in the pan. Sydney’s prestige market has seen 35 consecutive quarters of growth to Q3 2021, according to Knight Frank, averaging 7.3 per cent growth since 2013. And there are several reasons to expect even more growth in 2022.

One of the biggest factors likely to impact the eastern suburbs luxury market this year is the reopening of international borders. With our borders closed last year, activity from foreign buyers hit a record low in the June quarter, according to the NAB Residential Property Survey.

With bottled-up demand from both international buyers and ex-pats, experts, including the NAB, predict that as travel resumes, overseas arrivals will return to the prestige market, with a rise in sales expected to follow. Areas traditionally popular with foreign buyers, such as our harbourside eastern suburbs, are likely to benefit.

The return of investors and the desire from locals for second homes on home soil are also destined to drive price growth in the prestige sector this year, according to Knight Frank’s Prime Global Forecast. In fact, it predicts a 9 per cent rise in Sydney’s prime property prices in 2022, putting it in second place globally, after Miami at 10 per cent.

Looking for more?

If you’re thinking of buying or selling in the eastern suburbs this year, contact us today.