November 21, 2013 by Craig Pontey
We are all aware of how active Sydney’s residential market currently is with all sorts of records being broken or tested. Auction numbers are up, clearance rates are at historic levels and prices generally are in very positive territory.
For some time the most active parts of the market have been the in the price bracket of $700,000 – $1m, however the strong confidence in the market is now moving well beyond this.
What we are seeing is that much stronger activity, if like from the bottom end up is now pushing the top end up of the market. While the two markets are very different, I accept that, the reality is that although at a different scale some of the influences are common.
For some years there has been a sort of price ceiling and properties in the bracket of $4 – $5m have been a little lack-luster. But now the situation has changed and like the rest of the market, the change has been rapid over the past two months in particular.
There is solid evidence that the $5 -$8m market is picking up and doing so in more than just one or two isolated cases. The demand for higher priced homes is spreading across markets like Sydney’s east and north shore. Higher priced homes in some non-metro markets, like Gerringong, while not in the same $5m bracket are also doing well.
Some examples of the activity include sales at Black Street, Vaucluse at $8.5m, Princes Ave $6.8m, Graylind Place $6.4m and Vaucluse Road $7.3m and also Drumablyn Road $5.4m in Bellevue Hill.
The general improvement in the market is clearly helping to power this market alongside much off shore interest not only Asian buyers but expats coming back home. We need to keep in mind that despite our high prices, many of our best suburbs do offer much better value than by direct comparison to the UK or China, our prestige homes and those in harbourside locations are still good value.
Also just like the general market low interest rate environment helping to attract more buyers, its all relative. If you have the income to service a big mortgage the savings are just as real as for anyone looking to buy in the median price bracket.
In many of the job sectors like finance and law the employment outlook is more stable, with much of the job losses we saw several years ago during the GFC now behind us. This adds security to the employment market which, until this year was not there. Added to this we have also started to see a return to conditions where the major City firms are again paying bonuses.
While the $5m plus market has been a bit tough, it is reasonable to expect that as general markets retain an up-beat setting that general confidence will and is spreading.