Prestige sales surge 12% nationally, Sydney leads growth: LJ Hooker
Activity in the top 20% of the market has been markedly pronounced, according to new research in LJ Hooker’s Prestige Property White Paper.
With prestige house sales up 12%, and prestige unit sales up 18%, LJ Hooker’s national research manager Matthew Tiller said that the 80th percentile of markets has done well.
“Properties in the top price bracket have begun to take off thanks to rising demand from upgraders and the country’s top income earners,” said Tiller.
“In the last financial year, the ASX 200 Index grew by 12.3%, and some companies have boosted dividend payments to shareholders.
“There’s also a strong correlation between the bonuses of company executives and transaction activity in the prestige property bracket.”
Some vendors are also pushing themselves into the prestige bracket by renovating their properties prior to selling to achieve the top dollar.
Low interest rates, rising executive remuneration and a strengthened share market were all noted as potential factors behind the prestige market’s strength.
Despite this, it is difficult to compare the prestige markets across the country, with the top 80th percentile ranging from Sydney’s $1.58 million to Hobart’s $530,000. The median of the prestige sales over 2013/2014 was, however, $1.13 million – up 9.3% on 2013/2014. Prestige units clocked in a median price of $629,000, or a 6% increase.
Looking at $2 million plus sales, therefore, it makes sense that Sydney accounts for the majority of the strength in the price bracket, with 3.8% of the past 12 months’ sales falling into this price range.
It seems these prestige medians are expected to climb further, with LJ Hooker’s head of real estate Christopher Mourd noting that the renovations will likely lift the medians.
“Many home owners have been targeting big ticket items in their renovations like the kitchen and the bathroom to really add appeal before selling,” said Mourd.
Similarly, growth in wealth creation investments and a stable economy over the next year should also help drive the top end of the market, including upgraders.