The Sydney Prestige Property Market: 2023 Review

The prestige property market in Sydney has continued to perform strongly throughout 2023 despite a downturn in property prices in 2022, with a lengthier and a higher run in upward trajectory in prices comparative to the broader market.

The main drivers in demand for prestige properties have been:

• strong demand from both domestic and international buyers,
• the relatively low Australian dollar making prestige properties more attractive, and
• lack of supply.  

The acute lack of supply in the prestige market has resulted in many off-market deals, as listings are scarce and purchasers eager to secure a sale before competing with the rest of market.

While the broader market led a downturn in prices throughout 2022, albeit with recent improved market condition in 2023, buyers at the top end of the market have not been as sensitive to recent interest rate increases.  We've seen a continuation of record prices being achieved in a number of suburbs throughout the Lower and Upper North Shore, Eastern Suburbs and Sydney's Northern Beaches.

A Rose Bay 3,000 square metre beachfront listing commanding world class Sydney Harbour views - known as 'Great Gatsby' - has hit the market with an $85 million price tag.  If sold, it will become one of Sydney' most expensive homes. Source: realestate.com.

The recent off market sale of a circa 1891 landmark residence known as 'Leura' in Bellevue Hill has transacted for a record price, reported to be in the vicinity of the mid $70m price point, and once settled, will mark the highest price paid for a residential property in Bellevue Hill.

Meanwhile, a Lower North Shore listing in Longueville known as 'Otahki', with reported construction costs of just under $30m, has also hit the market with $50m price expectations.  If sold, Otahki will become the most expensive home north of the Sydney Harbour Bridge, exceeding the prior record of 'Idlemere' in Lavender Bay which sold for $44.2m in December 2022. Source: Sydney Morning Herald.

The Sydney prestige acreage market is also going from strength to strength, with the recent $24.5m record sale of 'Charlotte Park' in Terrey Hills. Surpassing (by an unprecedented $10m) the previous Forest District record, held by a $14.5m sale in September in nearby Duffys Forest, Charlotte Park has been constructed to exacting standards over a 5 year period by one of Sydney's most respectable builders. With extensive equestrian facilities including a dressage arena, multiple stables and horse paddocks, a resort style in-ground pool with pool house, full size tennis court and professionally landscaped gardens encompassing the entire 2 hectare site, the property provides for high-end and well established ancillary improvements, significantly improving presentation and market appeal. Source: Sydney Morning Herald.

While the prestige property market continues to be buoyed by a lack of supply, a protracted period of high interest rates, inflationary pressures impacting on business performance, and current global economic uncertainty are potential market headwinds that may impact on the luxury property market.  The extent to which this may occur, if any, is uncertain.