Sydney prestige residential shows no signs of slowing

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MORE spacious offerings compared to global rivals have lifted Sydney’s ultra-prime residential market to sixth spot in world for sales volumes, while Hong Kong was the clear drawcard with nearly $1 billion more in purchases than place-getters New York and London.

Knight Frank’s first assessment of the market – taking in sales of more than US$25 million – saw $2.481 billion change hands in Hong Kong over the 12 months to August, slightly down on last year’s massive jump of more than $1 billion to $2.679 billion.

Hong Kong also boasts the highest average transaction value in the market, at $52.8 million, followed by Singapore with $44.1 million and then Sydney at $43.8 million.

Capital splashed on high-end pads in London has nearly halved in since 2015, plunging from $2.881 billion to $1.479 billion in that time, and the number of transactions has fallen from 72 to 38.

New York, which ranked first in 2016, was second with $1.497 billion, having peaked at $1.723 billion two years ago.

Singapore ranked fourth overall, with a near-400% increase to $529 million over the past year as the average transaction price leapt from $29.1 million to $44.1 million, following a drop from $65.5 million over two transactions. In fifth was Los Angeles, which has fallen from $718 million in 2016 to $441 million.

Sydney’s total of $219 million was a fraction below 2017’s $221 million, but well above the $123 million in the 12 months to August 2016.

According to Ponton Valuations data, Sydney did post a record 100-plus sales of homes worth more than $10 million this year, a jump of around 20% on the 85 registered last year, and well above the 19 in 2012.

Knight Frank partner, head of residential, Australia Sarah Harding, said all ultra-prime transactions in Sydney over the past three years occurred in the eastern suburbs, and all were for houses.

“However, this is based on completed properties and we expect that off-plan sales will further increase these numbers when further prestige apartment buildings in Sydney are completed,” she said.

Atlassian co-founder Mike Cannon-Brookes and his wife Annie set a new Australian record in September with the near-$100 million purchase of the 1.121-hectare Fairwater mansion site on the Point Piper beachfront from the Fairfax family.

The previous record has been set in April last year by his fellow Atlassian co-founder, Scott Farqhuar, who paid $71 million for the Elaine estate, also in Point Piper, and also bought from the Fairfax family.

“Whilst Sydney is one of the smallest city markets in regard to transaction levels, it has some of the most spacious properties with the typical transaction encompassing plots of land, and an average saleable area of 1,976 sqm,” Harding said.

“Not only do the properties cover large areas, but the majority have waterfront views and a private swimming pool.”

Knight Frank’s Wealth Report 2018 forecast the global ultra-wealthy population – those with at least US$50 million-plus in net assets – which grew by 18% in the five years to 2017, to increase by a further 40% over the next five. The firm also expects the number of demi-billionaires – those with US$500 million or more in net assets – in Australia will rise by 29% from 70 to 90 by 2022.

Liam Bailey, global head of research at Knight Frank said the “relentless” creation of private wealth globally over the past decade has fuelled the growth of ultra-prime residential markets.

“Despite the proliferation of ultra-prime markets across cities, second home and ski locations, our research confirms there are three undisputed leading ultra-prime markets – Hong Kong, New York and London.

“While London has seen a relative decline in its lead as the world’s largest ultra-prime market, in terms of sales, Hong Kong has steadily built a commanding lead in terms of total spend by the world’s wealthy on ultra-prime property with New York growing its position as a dominant ultra-prime location.”

Australian Property Journal