The Top End of The Market is Out of The Gates & Racing

The 2024 Sydney luxury property market has begun with a flying start.

The landmark waterfront property “Boomerang” on Billyard Avenue, Elizabeth Bay, has sold for a staggering $80M. Whilst the transaction occurred just prior to Christmas 2023, the sale details have only been revealed in early 2024. The direct waterfront sits on 4,233m2 of prime harbourfront land and last traded in 2005 for $20M. The property is owned by trucking magnate Lyndsay Fox. No doubt this sale will recalibrate waterfront prices in Sydney Harbour.

Nearby, on Wolseley Road, Point Piper, another impressive sale saw a non-waterfront property on a 958m2 block of land fetch over $50M. The main feature of the property is the elevated due north views over the harbour. It’s a massive price for a non-waterfront on this land size. The nearby sale of $130M in late 2022 for a non-waterfront in Point Piper comprised a land holding of 3,351m2.

In Watsons Bay, a direct beachfront property reportedly sold for $32M, a significant leap from its previous sale price of $9.2M in 2014.

Meanwhile, the broader Sydney property market appears to be flatlining. Price growth seems to be moderating, likely influenced by the interest rate rises in 2022-2023, while an increase in stock levels is providing buyers with more choice.
It’s an interesting time we are in as mixed signals keep being emitted. On one hand, there is evidence the economy is slowing, and on the other hand, unemployment remains low whilst inflation locally and globally remains high. The Reserve Bank of Australia (RBA) has a most difficult task in front of them. If they pull the trigger too soon on rate cuts, it may spark up the economy again and push up property prices and inflation. If they leave it too long, they may miss an economy starting to slow way too much. I dare say, as the RBA ponders this dilemma in the lift at 8 Chifley Square, the elevator music will probably be The Clash singing “Should I Stay, or Should I Go Now?”

It's evident that at certain price points, in various locations, the interest rate rises have had the desired effect. Whilst mortgagee in possession sales have not been prevalent, struggling homeowners have taken the opportunity to manage the sale of their property or property investments in a controlled manner. Often the highly geared investment property is the first to go along with the holiday home. The principal place of residence is the last to go but often it simply means downsizing to a more affordable property and debt. I dare say a lot of this has occurred in the past 6-12 months. The upside is that there has not been a bloodbath in the property market and there have been better opportunities for first home buyers.

Back to the luxury end of the market, anything over $10M is less effected, particularly as the price point increases. At the upper end, buyers are all about opportunity. The opportunity to buy in a very good location, undertake some renovation work and substantially increase the value of their asset well beyond the median price growth. These buyers are less leveraged and more cashed up.

Mind you, I will conclude with an air of caution. Regardless of the location, price type or price point, you still have to do your due diligence. I recently valued a property, above the $10M price point, which sold off the plan in 2016 and literally to the month, sold 8 years later for the exact same amount. Did it resell cheaply? No, it had been openly exposed in the marketplace for a number of months with a very good agent. So, what was the problem? They simply paid too much for it the first place. In fact, they paid way too much for it.

Peter Raptis
Director - Prestige Valuations
— Sydney Property Valuers - Residential & Government Services
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