Demand for housing in Sydney and Melbourne’s blue-chip enclaves remains as strong as ever heading into this year, according to buyers’ agents, estate agents and valuers.
Their comments defy recent data showing inner-city suburbs were behind the easing in house price growth that occurred in the final months of last year.
CoreLogic noted last week that four out of the six regions to record lower house prices in December were in Melbourne and Sydney, including Melbourne’s inner east and Sydney’s eastern suburbs, which has the country’s fourth-highest median home value of $1.8 million.
“After leading the upswing, it is clear the upper quartile of the housing market is now leading the slowdown,” said CoreLogic’s head of research Tim Lawless.
“Across the combined capitals, upper-quartile dwelling values were up 2.6 per cent in the December quarter compared with a 3.7 per cent rise across the lower quartile and broad middle of the market,” he said.
But Melbourne buyer’s agent David Morrell, who specializes in securing homes for ultra-wealthy clients in Toorak and South Yarra, said there was no sign of any let-up at the very top end of the market.
“That’s not what I am experiencing. We had our busiest two to three weeks of the year in the lead up to Christmas,” Mr Morrell told The Australian Financial Review.
“In fact it’s the opposite [to what CoreLogic] is saying. There is more interest at the top end.
“It’s in my interests to talk down the market, but at the coal face that is not what I am hearing,” Mr Morrell said.
“Vendors are saying: this is my price. There is no room to negotiate.”
An ongoing issue, he said, was a lack of listings, a problem being exacerbated by the omicron wave of COVID-19 infections
“There’s not a lot happening. Owners don’t want people coming into their houses. Some are talking about holding off selling until April or May.“
Mr Morrell said it may well be the case that a slowdown was occurring one notch down the property ladder, in the $3 million to $4 million bracket, where more onerous lending conditions were having an impact.
But at the very top end, finance was not an issue, but rather choice, quality offerings and the motivation to sell.
“A lot of vendors are just dipping their toes in the water. They’re using a listing to get a free valuation.”
On Sydney’s wealthy upper north shore, similar dynamics were playing out said Lynette Malcolm, an agent at Chadwick Real Estate.
“It’s going to be a tightly held year again at the top end,” she said.
“There are a lot more mid-range properties – $6 million to $7 million – for sale, but not many are being tipped onto the market at the high end. It’s the lack of stock, which is preventing areas like the upper north shore from cooling off.”
Just how strong this market is will get an early test after Ms Malcolm listed one of the area’s historic mansions for sale alongside Chadwick colleague William Zhang and Tim Fraser of Di Jones.
The grand five-bedroom Georgian estate set on 5400 square metres on Burns Road in Wahroonga has been put on the market by the directors of China’s Yunnan Tin Group, the world’s largest producer and exporter of tin.
Price expectations start from $13.8 million for the property, which was built for Dr HR Arnott of the famous biscuit family back in 1941. It last sold for $7 million in 2008.
Should it attract strong interest, it could come close to matching the $15 million record for an upper north shore home, a price paid two years ago for 27-29 Chilton Parade, Warrawee, a nine-bedroom mansion on 6400 square metres of land.
Anna Porter, a property valuer and chief executive of Sydney-based advisory firm Suburbanite, said affordability challenges had emerged for those looking to buy “middle-tier” family homes.
Previously able to purchase something in the $1 million to $2 million bracket, 20 per cent price growth over the past 12 months had lifted average prices above $2 million.
“Some families have had to reconsider their options. It’s a lot tougher to purchase sub $2 million and get a nice, long-term family home. You have to come up with a bigger budget.”
“Any interest rate increase could be a trigger for a slowdown in this sector,”
But, Ms Porter said, at higher price points it was a different market.
“At the super prestige level it’s about supply and demand, and there is a lack of supply. You need more listings to put downward pressure on prices.”
This article is from Australian Financial Review, please click the following link for the original article: https://www.afr.com/property/residential/it-s-the-opposite-top-end-property-market-still-surging-20220109-p59mvb