Some softening in prestige prices in Sydney's trophy home market

Some softening in prestige prices in Sydney's trophy home market
Some softening in prestige prices in Sydney's trophy home market

The prestige market in Sydney is spread across a number of regions including riverfront locations in the south and inner west, to large estates in The Hills, to large modern inner city apartments, to harbour side and beachside areas of the east and north.

Traditionally prestige properties were considered to be those with a value above $3 million, however in some areas this is now $5 million and above, the valuation firm Herron Todd White's latest report suggested.

It noted the prestige market has experienced significant growth over the past five years, however has experienced some softening of prices over the past six to twelve months, with some areas holding up better than others. A recent CoreLogic article indicated a 5.7% fall in the prices of the 25% most expensive properties in Sydney over the past 12 months.

HTW consider the prestige market to be less dependent on affordability issues than other markets.

Instead, the market is driven by global flows of wealth and a supply versus demand balance. It noted the factors that will help stimulate the Sydney prestige market include the Australian dollar, domestic and international share markets, business performance, business confidence, company profits, Chinese interest in trophy homes, buyer activity from expats and migration interest under the Significant and Premium Investor Visa Program.

The report did noted that rhe eastern suburbs prestige market has started 2018 fairly strongly, carrying over from what was considered a solidly performing 2017.

Good quality family homes in the $5 million to $10 million price range are the strongest sector of the prestige market.

The harbourside suburbs of Bellevue Hill, Rose Bay, Woollahra, Double Bay, Dover Heights and Vaucluse and beachside suburbs such as Bronte, Tamarama and Clovelly have all seen steady numbers of prestige sales in the year to date.

Local high income families have been the typical buyers for these types of properties which is driving this sector. Vaucluse saw approximately 11 registered sales above $5 million in 2018 (as at 19 April) with two of these sales being above $10 million (source: PriceFinder, RP Data and Realestate.com.au.).

The higher price points of $15 million plus, often referred to as trophy homes, have seen limited transactions and some market softening with extended selling periods. Vendor expectations have had to become more realistic to meet the market.

This is fairly similar with the prestige unit market with somewhat mixed results and limited transactions occurring in the $5 million plus category.

Buyers are becoming more cautious particularly in regard to those considered to be secondary prestige properties (busy road positions, steep sloping sites, etc). There are also an increasing proportion of prestige properties being sold off market though local agents.

Overall there are some mixed results within the eastern suburbs prestige market and the rest of 2018 is expected to see a continued stable market with some of the price points and property types experiencing some softening.

Some examples of recent prestige sales in the area include 148 Old South Head Road, Vaucluse, which sold in March for $8.2 million after 30 days on the market and 178 Hopetoun Avenue, Vaucluse, which sold in April for $17 million after 253 days on the market with original expectations in August 2017 of $22 million.

A Vaucluse brand new architecturally designed house over three levels with harbour views was sold on May 3 (pictured below).

Designed according to traditional Feng Shui principle, the 148 Old South Head Rd house is graced with prestige appointments and finishes of the finest calibre.

The indoor features include five bedrooms, living/dining and family areas with balconies, home cinema and Miele marble kitchen.

The outdoor area comes with mosaic tiled pool, rooftop terrace with superb views and five car garage. 

Positioned on a 700 sqm block, it is opposite Christison Park and the iconic Macquarie Lighthouse. 

Some softening in prestige prices in Sydney's trophy home market

Another Vaucluse seven bedroom harbourside house was sold in April (pictured below).

Architect designed by Michael Suttor less than 20 years ago, the 178 Hopetoun Avenue house features light filled interiors and resort style living.

It comes with seven bedrooms, separate formal lounge and dining areas, and gourmet open plan kitchen.

Outdoor features include level garden, pool, and full tennis court.

It is located within a stroll to historic Watsons Bay and convenient to Rose Bay and Bondi Beach.

Some softening in prestige prices in Sydney's trophy home market

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Eastern Suburbs Htw

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