2019 saw Sydney’s prestige market perform in a landscape where almost all other sub-markets suffered a significant downturn. CoreLogic has reported an increase of 4.6 percent in the values of the top quartile of Sydney property, almost double the growth of the lower quartile over the last quarter.
Michael Coombs, premier prestige market sales expert at Avnu Neutral Bay, says that more buyers than previous months have attended open homes, and that he’s also seen an influx of premiere stock come to market. In December, Mr. Coombs smashed Cremorne’s record sale price, exactly a year after it was beaten last, this time at close to $19 million for the home of businessman Carl Peterson.
What’s leading this turnaround?
There are many factors which drive up buyer interest, including lower interest rates, as well as the uncertainty in the UK and US markets. This drives more investment into the comparatively stable Australian market.
The Australian dollar has also been weak which has driven more expatriates and international buyers from markets such as Hong Kong to secure property in Australia.
There is also the effect that comparable stock has had. Much media attention has been given to the sub-quality blocks built by mass-producers such as Meriton and Mirvac, as seen in the case of Mascot towers. The word is out that, all too often, shoddy workmanship and poor design lead to an unlivable environment and/or costly work to fix damage down the track. This is in juxtaposition to the premium high-end stock being built in exclusive suburbs, such as Premiere Place in Mosman.
What will this mean for the future?
The strong performance of the prestige market in an economic downturn has a two-fold effect:
Number one; it will encourage people to sell to international buyers seeking to take advantage of the weaker dollar and to flee troubled locations around the globe.
And secondly; it will allow to government to not worry about the performance of the top end of the market as it focuses on lifting the bottom end with programs such as the First Home Loan Deposit Scheme – this will have a ripple effect – pushing people in each property bracket up into the next, creating a larger group of prestige property buyers.