Tempered recovery ahead as Sydney prestige bouncing off the bottom: HTW

Tempered recovery ahead as Sydney prestige bouncing off the bottom: HTW
Jonathan ChancellorDecember 7, 2020

The Sydney prestige market has shown very early signs of market recovery, according to valuers, Herron Todd White.

It was evident in a "minor increase in both buyer interest and transaction activity." 

"We would consider this is reflective of a general perception that the bottom of this market has been reached, combined with improvements in the share market, the implementation of the Significant Investor Visa and cheaper Australian dollar," the HTW May report noted.

"Confidence in the prestige market is slowly re-emerging with moderate signs of a market recovery," it said.

They tip increased demand from overseas purchasers, including expat purchasers.

According to the valuaion firm, Herron Todd White, tthe prestige residential market in Sydney for both units and houses was properties with values in excess of $3 million. 

Prestige houses tend to be located either within the eastern suburbs and eastern beaches, lower and upper North Shore, northern beaches, some waterfront localities in the southern suburbs and the larger rural residential estates to the north-west of Sydney. 

It wasn't an interest rate driven market, they noted.

"More significant drivers of the prestige market include the state of the equities market, stability in global economic conditions, levels of business and consumer confidence and overall business conditions and the value of the Australian dollar," the report said.

"Over the past six to eight months, the market for prestige dwellings has shown early signs of strengthening, with increased sales activity and selling agents indicating ongoing strengthening in demand.

Combined with the impact of the weakened Australian dollar, there appears to be early signs of market strengthening flowing into the prestige apartment market. 

But before the latest $40 million plus Point Piper sale the report noted market activity for 2015 was yet to reach the records of 2014.

It noted demand for premium apartments was largely driven by overseas buyers and empty nesters seeking to downsize from the family home which is typically also from within recognised prestige locations. 

"With the weakness in the prestige dwelling market during post GFC and up until early 2013, these empty nesters had been unable to secure a premium price for their existing prestige homes and there was a subsequent reduced demand in the prestige apartment market.

"Demand from overseas investors for off the plan property that complies with overseas investor requirements and a general recovery has seen an improvement in the prices achieved for prestige units. 

HTW noted highlights of this market include the sale through Savills of a penthouse in Elizabeth Street with north views over St Mary’s to the park and the main harbour, with four bedrooms, five bathrooms, private pool, terraces and four car accommodation at $12,365,000 in late 2014. 

"Given there has been some gathering momentum in transaction volumes in the prestige market sector with a corresponding reduction in stock levels and an array of super prestige trophy homes transacting, we would expect that 2015 should show a maintained cautious optimism and confidence in the prestige market and further tempered recovery," it concluded.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.
Tags:
Sydney

Editor's Picks