A rising tide lifts all luxury yachts in Palm Beach
Steve Bellotti, ANZ’s managing director of global markets, has spent $8.4 million on a beachfront property in the pricey part of Sydney’s northern beaches peninsula, Palm Beach.
The vendor, dentist Graham O’Neil, had wanted $9.95 million for the 558-square-metre holding with an architect-designed two-storey, five-bedroom beach house complete with boat and watercraft storage area with hydraulic floor lift.
It ranks among the few Iluka Road properties with title to the high-water mark, whereas the other properties are mostly reserve frontage.
Its more-than-respectable final selling price at $15,000 per square metre suggests the tide might finally be rising when it comes to prestige prices.
There was a nearby $6 million sale nearby last year with a tiny cottage that reflected $10,900 per square metre of land value. And another house slightly less comparable to the Bellotti purchase sold mid-2010 at $7.2 million, which reflected $13,400 per square metre.
While it would be pushing it to suggest that Palm Beach become a peninsula of paupers, there's no doubting beachfront property prices had come off by 20% or so by late 2009 due to the global financial crisis.
The pre-global financial crisis beachfront record was $12,980 per square metre, also on Iluka Road, in 2007.
At one stage during the downturn there was a $4 million oceanfront reserve sale on Ocean Road – directly opposite the northern end of beach – reflecting $3,550 per square metre in 2009.
Prices, however, eventually found their floor in the wash-up of the much-credited Lehman's effect.
The latest sale came after marketing through LJ Hooker Palm Beach agents David Edwards and Peter Robinson, who had it listed for December 2010 tender.
But the ongoing twin challenges for Palm Beach are the strength of the Australian dollar – and the virtual absence of expatriate buyers – and perhaps the greater underlying inhibitor to any sustained recovery, the detrimental impact of land tax.
Look at the rubbish trolleys still out on the narrow streets well after garbage night, and it is easy to conclude about 80% of Palm Beach properties are holiday houses. So their purchase requires not only the initial outlay – with its inevitable NSW government premium property stamp duty – but also the annual land tax.
The best thing to do is make Palm Beach one’s principle place of residence and have a land tax-free apartment in town.
But Bellotti, who joined ANZ in March 2010 from Blue Sky Capital Strategies, where he remains chairman, bought a Mosman house in 2010 for $9 million through Richard Simeon at Richardson & Wrench.
The 558-square-metre Bellotti Palm Beach block comes with a current $5.61 million unimproved land valuation. The 2008 land valuation was $5.28 million and $5.5 million in 2009, so with the NSW government's three-year land value averaging system, it would trigger an annual $93,700 land tax bill as a weekender.
Its value in 1984 was $350,000, according to RP Data.
Palm Beach sales peaked with the $15 million sale in 2007 of Anakela, the beachfront retreat of the late grocery tycoon Jim Fleming and his widow, Angela.
It was bought by the Uncle Toby's founder Doug Shears.
The Flemings had paid $3.65 million in 1995 for the 1,947-square-metre Iluka Road property, which had sold in 1973 for $140,000.
The Flemings constructed an expansively lavish house that came with a second-floor see-through glass bathtub, which was suspended above the ground-floor living area.
It was 1981 when the late Kerry Packer broke through the suburb's million-dollar threshold with his $1 million purchase from the MacCormick family. But the pianola is the raciest accoutrement around at the Packer family bungalow.
