January 18, 2024

Luxury property outlook as we enter 2024

The growth in the luxury property market in 2023 is set to continue as we enter the new year.

Luxury property outlook 2024

Looking back over 2023 reveals luxury properties continued to be highly sought after with new record prices being achieved, particularly on the east coast of the country. It’s a trend expected to be repeated this year.

The strong prices being achieved in the luxury property market were and continue to be underpinned by the combination of a lack of supply, wider economic health, the return of wealthy purchasers from mainland China and appeal of Australia as a desirable destination.

Despite the higher interest rate environment persisting in 2023 with the potential of higher rates for longer, the luxury property buying cohort has been largely unaffected when compared to the broader market. For wealthier individuals, higher interest rates can mean higher income, as often large sums are held in lower risk fixed income products as a means of preserving wealth and lowering the risk profile of a large, diversified investment portfolio.

Below the luxury end of the market, and despite the rising interest rate environment, property prices in Sydney and Melbourne moved back to growth in 2023 after a softer 2022. However, there was some moderation in growth in the final quarter of the year as the choice of properties available increased and borrowing capacity was made more restrictive by lenders. It did not impact the luxury market.

The record price for luxury properties in 2023 was $76 million (m) for a Bellevue Hill trophy home in Federation Queen Anne-style on a 4,260sqm estate, transacting at more than twice the price paid for it just eight years ago and making this the third highest sale in Australia to date. This follows the new Australian price record set on Christmas Eve 2022 with the $130m purchase of Uig Lodge also in Point Piper (29 Wentworth Street) Sydney, a Scottish baronial-style estate on about 3,300sqm at the top of Wentworth Place.

This set a new benchmark in the nation’s most prestigious suburb of Point Piper, exceeding the $100M previously recorded in 2018 for Fairwater.

When it comes to Australia’s most expensive properties, Sydney’s eastern suburbs and northern beaches and Victoria’s Toorak lead the way. Here we take a closer look at the eastern states:

Melbourne

The most expensive property to change hands since the start of the year was in Toorak with the much-anticipated sale of the late Ron Walker’s five-bedroom family home known as ‘Huntingfield’ in Albany Road on a 3,300 square metre lot, which sold after being listed with a price guide of $55 million to $60m making it the most expensive Victorian sale in 2023 so far. The selling agent has declined to comment on the buyer or final price.

The second-highest sale so far this year occurred in Hawthorn, where iconic Victorian-era mansion ‘Avon Court’ in Shakespeare Grove comprising nine-bedrooms, seven-bathrooms and on a 4,300 square metre allotment sold in May to a Chinese businessman for $41m, closely followed by a six-bedroom mansion known as ‘Carinya’ at 61 Clendon Road Toorak which sold for an undisclosed amount, understood to be in the vicinity of $40m.

A new unit benchmark was smashed in the Melbourne CBD in early-May when businessman Adrian Portelli purchased a penthouse on levels 57 and 58 of the “Sapphire by the Gardens” residential tower adjoining the proposed Shangri-La Hotel near Carlton Gardens for $39m, making it Melbourne’s most expensive apartment.

Toorak features heavily in Victorian prestige sales to date including the off-market transaction of a contemporary style mansion in Whernside Avenue in mid-April for $34m; a six-bedroom mansion in Macquarie Road selling for $30m; a six-bedroom mansion in St Georges Road transacted in an off-market transaction for $30m; a mansion in Clendon Road on 1,350sqm sold for $23.5m; the  purchase of a five-bedroom, six-bathroom mansion in St Georges Road for circa $23m; a 1930’s-built four-bedroom mansion in Ottawa Road sold for $21.5m and the purchase of a six-bedroom 1930’s mansion at 26A Linlithgow Road for $20.7m.

Melbourne’s Toorak remained the key luxury suburb in 2023 to date, other luxury suburbs such as East Melbourne, South Yarra, Armadale, Kew, Hawthorn East, and Brighton have also recorded strong activity to date.

Sydney

Sydney again featured strongly in the nation’s top luxury property sales since the start of 2023, with the prestige market displaying signs of strength on the back of continued demand for quality property and limited stock.

Since the start of the year the most expensive sale was in Sydney’s Bellevue Hill where an eight-bedroom, eight-bathroom mansion with six-car garage, tennis court, pool and Sydney Harbour views on a large 4,260 square metre parcel at 24 Victoria Road sold in June for circa $76m.

Also in Bellevue Hill, and within a week of the Victoria Road sale, a four-bedroom, four-bathroom mansion with four-car garage on a 1,338 square metre parcel at 68-70 Kambala Road sold for $61.5m.

A Spanish-Mission style landmark home at 49 Wunulla Road Point Piper sold for $69m in late-April, making it among Sydney’s top ten most expensive house sales of all time.

The most expensive apartment to sell so far in 2023 is a luxury unit in Crowns One Barangaroo complex which sold in mid-February for $26m.

Other top sales were the sale of “Lang Syne”, at 31 Gaerloch Avenue Tamarama which sold in May after seven months on the market, setting an Australian oceanfront sale record. The purchaser and exact price remain undisclosed but is speculated to be around $45m. In Sydney’s Point Piper, one of the two apartments that comprise the country’s third-most expensive home known as ‘Edgewater’, a four-storey waterfront mansion in Wolseley Road, has settled for $47.5m, three years after it was contracted for $95m in 2020.  The remaining apartment is understood to be on extended settlement terms and when expired will complete the deal.

The suburbs of Point Piper, Bondi, Mosman, Bellevue Hill, Darling Point, Woollahra, Double Bay, Avalon Beach, Centennial Park, Bronte, Drummoyne, Warrawee, Vaucluse and Birchgrove also continued to feature several other luxury property sales since the start of the year.

Queensland

Queensland’s highest sale result of the year so far was on Queensland’s Gold Coast where a tri-level, six-bedroom, seven-bathroom trophy home on 3,442 sqm known as ‘Alston’ at 5 McMillan Court Southport sold to a mystery buyer for $24.8m, recording the biggest residential property sale in Queensland this year and setting a new residential auction record for the State.

This sale eclipses the sale in July of a tri-level Balinese-style mansion on 2,197 square metre main river parcel with 52 metres of river frontage at 59 The Corso Isle of Capri, which sold at auction for $24m.

In Brisbane the top sale of 2023 to date sets a new record with a 130-year-old riverfront property in New Farm. ‘Amity’ sits on 2,127sqm, with the classic Queenslander, built in 1892, selling in late-April for $20.5m, making it the most expensive residential property to ever be sold in the city.

The prior Brisbane record was the $18.48m Kangaroo Point purchase back in 2017. The new record comes as the luxury market continues to outperform. A new apartment record was set in early February with the sale of a luxury unit in the “Luminare Residences” apartment complex in Newstead for $12.95m. The sale broke the Brisbane per square metre price record becoming the most expensive apartment, at $24,000 per square metre.

Other notable sales to date in 2023 include a four-bedroom beachfront home in Albatross Avenue Mermaid Beach on the Gold Coast which sold for $14.1 million; a five-bedroom tri-level home on a 2,303 square metre waterfront lot in Monaco Street Broadbeach Waters sold for $13.5m and a four-bedroom, whole floor 650 square metre sky-home apartment on level 42 of the recently completed 272 Hedges Avenue at Mermaid Beach which sold for $12m.

Given the reported increasing level of enquiry in the luxury market sector supported by a surge in migration, agents and buyers’ agents anticipate strong activity for the start of 2024 and the prospect of new record prices being set, largely due to the lack of quality stock. The luxury segment closes out 2023 with momentum and is anticipated to remain outperforming the broader housing market into the new year.

 

Important information

The information contained in this article is gathered from multiple sources believed to be reliable as at December 2023 and is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. NAB does not guarantee the accuracy or reliability of any information in this article which is stated or provided by a third party. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, property, financial and taxation advice before acting on any information in this article. ©2023 NAB Private Wealth is a division of National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686

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