Sydney's eastern suburbs prestige market enters winter with overpriced oversupply

Sydney's eastern suburbs prestige market enters winter with overpriced oversupply
Sydney's eastern suburbs prestige market enters winter with overpriced oversupply

Sydney's eastern suburbs prestige home auction market faces testing times.

Estate agents are concerned the top end enters the winter hibernation with a serious overload of unsold stock.

Winter traditionally sees reduced activity as buyers and agents head overseas for holidays.

The eastern suburbs has dozens of stale listings on websites and off market.

There are 12 forlorn offerings sitting on the website of the leading eastern suburbs' listers, Sotheby's International with $10 million plus hopes.

The recent $13 million plus sale of the Bellevue Hill mansion of Japanese developer Kemmori “Alex” Yasumoto and his wife Sacha to the Berger family is hoped as the icebreaker sale on the sales impasse.

Michael Pallier secured the sale of the 2000-square-metre property on Suttie Road after seven months.

But another offering, in Rose Bay has been with its Sotheby's listing agent since 2014.

Another in Vaucluse was listed in late 2015 by agent Michael Pallier.

The home at 70 Wentworth Road had an initial price guide of more than $30 million.

The five-bedroom house on more than 1400sq m of harbour front land was listed by downsizers.

“They are empty nesters, their children have grown up, left home and they’re ready to pass the baton on to next person,” Pallier said at the time of 2015 listing, adding there had been interest from both local and overseas buyers which had buoyed hopes it would sell over the before the 2016 New Year.

“That pocket along there — there’s only a limited number of those prized, deep water front houses and they rarely come onto the market.”

But it was still there when the local paper advised Pallier hasn’t inked a deal yet in February this year, but noted he advised the $33 million five-bedroom waterfront abode at 70 Wentworth Rd had been particularly popular with Chinese buyers here for the Chinese New Year celebrations.

“They dream of being able to fish from the front garden or jetty,” he said.

Pallier was described in the spiel as a "listings machine" by his wife, Lu Lu who said she brings the buyers.

Pallier described this year’s Chinese New Year as "the strongest we’ve ever seen” in terms of inquiry from Chinese buyers and inspections.

But rival agents suggest the level of unsold stock pitched at the Chinese buyer was a sign of trouble in the market.

It is not just harbourside as last October a Tamarama Marine Drive, Tamarama building block was listed by Marco Rossi, chairman and founder of the construction company Built.

There were $15 million expectations for the property Rossi bought back in 2007 for $11 million through the Blacket Agency, setting a record for the suburb at the time.

He demolished the existing building and excavated at a cost of around $1 million.

Plans for the five bedroom home include an eight-car garage and a lift from the street frontage are estimated to cost another $7 million.

They were designed by internationally renowned architect Wallace E. Cunningham.

In March the private auction for the blue blood Hordern family's longheld Bellevue Hill trophy home didn't go ahead.

The Ginaghulla Road home was set for a private auction through Sydney Sotheby's James McCowan, but was pulled and remains for sale.

Heritage-listed, the iconic eight bedroom home was built as a wedding gift to June Baillieu and Samuel Hordern, who united two of Australia's most prominent families.

One of Sydney's most famed architects Professor Leslie Wilkinson was commissioned to design the home some 80 years ago.

The home, still etched with the Hordern family coat of arms, is set behind a walled entry with a forecourt in a church-style.

Another unsold offering is the redundant Point Piper home of BRW Rich Lister Paul Lederer and his wife Eva which was listed last December with $20 million hopes.

The Wyuna Road property was designed by architect John Suttor and purchased by the Lederers in 1992 for $2.8 million from businessman Charles Scarf and his wife Maria.

While the $10 million plus market appears stalled, valuers HTW recently noted the Sydney prestige property market, generally considered to be properties above $3 million, has continued its strong performance into 2017.

It pinpointed Bellevue Hill in Sydney’s east has having a total of 70 dwelling sales in the past 12 months with a median price as at April 2017 of $4.777 million.

HTW noted factors which have been driving the prestige market included a limited supply of quality stock coming on to the market and a sustained period of high auction clearance rates in prestige suburbs.

Savills recently noted prices in Sydney’s luxury eastern suburbs markets continued to increase in the first quarter of 2017, "albeit at a slower rate than seen across Greater Sydney."

The luxury property market increased by 1.2 percent over the three months to March 2017, taking annual growth to 8 percent.

This compares to a quarterly and annual growth of 5 percent and 18.9 percent respectively for Greater Sydney, according to Corelogic.

Savills says this outperformance was partly due to the price differential.

"The median price of properties in the luxury index is over $7 million compared to $795,000 across the wider Sydney market," it noted.

"The luxury eastern suburbs markets are less dependent on affordability - instead, the market is driven by global flows of wealth and a supply versus demand balance," Savills International head of research Sophie Chick said.

Savills calculated across the luxury market in the eastern suburbs the average price per square metre (internal and external) is $16,600.

For a property on the waterfront, that increases to $24,800, a 50 percent premium.

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Sydney Prestige Homes

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