Why Housing Demand In Sydney Is So Strong
The Strathfield agent won't disclose the reserve, but said the price paid for the 23 Newton Road house was considerable – the most anyone offered to pay ahead of the auction was $5.5 million.
Strathfield, with its large blocks and family-size homes, has always been popular with growing families. But over the past 18 months the top end of the market has taken off, with more buyers chasing properties above the $5 million level than ever before, says the Strathfield agent.
"I've never seen that segment of the market so competitive," he said. "In the last 12 months we've sold 19 Newton Road for $5,850,000, 32 Newton Road for $5,025,000, we've sold 9 South Street for $5,715,000 and in the last few weeks we've had four transactions totalling just under $20 million off market that are subject to non-disclosure agreements. That gives an indication of how strong the top end of the market is at the moment."
Demand for homes is booming in Sydney. Last weekend, the NSW capital posted an auction clearance rate of 84.3 per cent, its highest in 14 months, and raising expectations that banking regulator APRA would have to step in again to force lenders to tighten credit to investors making the most of ultra-low interest rates.
Prices continue to rise, although most commentators expect the pace of growth to moderate from last year, when Sydney homes jumped 11.5 per cent, as the growth in dwelling prices that is outstripping wages exhausts the ability of many to pay more.
Low stock levels have contributed. New Sydney residential listings are almost 21 per cent below their level a year ago.
But the surge in demand that made Strathfield's prices jump 30.5 per cent last year isn't just because there are fewer homes on the market. It's the economy.
"NSW, along with Victoria, is the prime beneficiary of the rotation in growth that's going on, driven by the fall in exchange rate and the decline in interest rates," said veteran economist Saul Eslake.
Australia's resources-driven economic growth over the decade to 2013 was focused in the north and west of the country, and the consequent strong exchange rate dampened industries such as education exports – the fourth-biggest after iron ore, coal and natural gas – and tourism, which were focused in the south-east.
In addition, NSW has been playing catch-up after a decade of underperformance in which gross state product expanded less than the national average.
"Send them elsewhere, Sydney is full up," then premier Bob Carr infamously said in March 2000, after prime minister John Howard had publicly talked about boosting Australia's migration intake.
The NSW economy expanded at an average 1.8 per cent between 2001 and 2010 – in contrast to a national figure of 3.1 per cent – as immigration slowed, housing production was constrained and infrastructure investment dried up.
In the decade to 2010, NSW lost an average 23,000 people interstate each year.
Now, however, the tables have turned. In the March quarter of this year, gross state product grew 1 per cent. Infrastructure investment – particularly in transport – is booming.
But the state is still unwinding a woeful under-investment in housing. NSW planning authorities approved the construction of nearly 58,000 new homes in the 12 months to February 1995. It took another 20 years to get back to that number, achieved in the 12 months to March 2015. Over the same time the state's population grew by 1.5 million to 7.6 million people.
"Overwhelmingly, the biggest factor is demand," Mr Eslake said. "It's just driven by natural factors. Underpinning that increase in demand is the much-improved performance of the NSW economy."
Sydney's now the jobs hot spot. Greater Sydney's 5 per cent unemployment rate in July was the lowest of any state capital, beating Melbourne (5.9 per cent), Brisbane (5.6 per cent), Adelaide (7.3 per cent), Perth (6 per cent) and Hobart (6.1 per cent). Only Darwin (3.4 per cent) and ACT (4.4 per cent) were lower.
But the Sydney housing market is supercharged further by interest rates too low for its booming economy. Some commentators finger the Reserve Bank of Australia for cutting the benchmark rate to a record-low 1.5 per cent, but the central bank is trying to weave a path – as it did during the resources boom, when the situation was reversed – between wildly diverging regional economies.
If Sydney's economy could be ring-fenced, it would ideally have an interest rate of 3.5 per cent, more than double the national current rate, and house prices in the city would consequently be an average $100,000 cheaper, said Terry Rawnsley, the head of economic analysis at consultancy SGS Economics & Planning.
"Sydney is detached from many of the challenges facing the rest of Australia," Mr Rawnsley said.
And the ultra-cheap money and supply-constrained market are a potent draw for investors, who see Sydney's housing market as too good an opportunity to pass up.
Back in Strathfield, the market is expected to stay strong until the end of the year. Things might be coming off slightly, but not in any major way.
"We had four active bidders bidding more than $6 million on that property," said the Strathfield agent. "Maybe a year or six months ago we'd have had an extra two people. The competition is still there, but it might be slowing a bit."
But it will do little to slow price growth, he said.
"Whilst supply remains low and demand continues, prices will remain high."
But the low level of housing stock, particularly that of established homes – the outcome of a high clearance rate – remains a conundrum.
Last weekend, when the auction clearance rate reached the 14-month high of 84.3 per cent, Sydney had 654 auctions compared to 930 a year ago. In the previous week, when the clearance rate was 78.3 per cent, there were only 635 auctions versus 910 at same time last year.
While some agents say vendors who wanted to sell have done so in the boom of the past four years, the low stock now may be due to other factors.
"People won't sell because home owners can't go to where they want to," LJ Hooker's Peter Tannous said. "The prices are 'wrong'."
By "wrong", Mr Tannous means prices are now "too high". Sydney housing prices have risen over 61 per cent since 2012 and the median house price is now close to $800,000, according to Corelogic. Ten years ago it was half that price.
Sydney's house price to income ratio is about 8.5 according to Corelogic in June, nearly twice the national average of just over 5, according to the Demographia International Housing Affordability Survey and UBS.
Even at 5 Australia was considered severely unaffordable, according to the survey, making Sydney the world's second least affordable place to buy a home – worse than San Francisco.
The higher prices get, the less current owners are willing to sell their homes, for fear they won't be able to "get back into the market", even with the additional equity earned on their homes, Mr Tannous added.
Mr Tannous was referring to Sydney's west, in Guildford and Merrrylands areas where he sells, and where house prices are already traditionally cheaper and more affordable than the east and harbourfront areas. Auctions are traditionally used less frequently in the west, yet auction clearance rates have reached 70 per cent in the last few weeks.
"People in this area traditionally move up to the Hills area, but even the north-west has become so expensive because of the new metro," he said.
Land and property prices in north-west Sydney areas such as Castle Hill, Kellyville and even Rouse Hill rose up to 20 per cent in the last few years with commencement of construction on the $8 billion new fast train.
Over in the eastern suburbs such as Bondi, the scenario is similar albeit at higher prices, auctioneer Jesse Davidson said.
"Sellers are thinking, if I sell, where do I go?" he said.
A "price vortex" is the result – high prices stop people from selling which in turn reduces housing stock that propels prices further.
So instead of buying, would-be sellers renovate to get the upgrade they need, perpetuating the low stock problem.
In June, the Housing Industry Association said renovations will rise by 2.5 per cent in 2016, and another 1.7 per cent in 2017.
Some experts think the mix of housing is wrong with too many apartments being built instead of houses, discouraging current owners from selling because the preferred upgrade for many current owners is a house.
"There are too few detached homes being built. Even townhouses, detached dwellings are too few," Starr Partners' Doug Driscoll said.
"Ideally the city needs to see more affordable detached housing options which means improving the transport infrastructure connecting the outer fringe areas and introducing more amenity to these areas," Corelogic head of research Tim Lawless added.
But Urban Development Institute of Australia NSW chief executive Stephen Albin thinks differently.
"Three years ago, we worked out how to put houses on small lots to get feasible projects and buyers what they want. What I think is stopping people selling is stamp duty," he said.
Stamp duty rises with the value of homes, and with homes priced so high already, the situation "locks people in their current property", Mr Albin added.
Importantly, the high auction clearance rate in Sydney shows there are not enough bigger homes close to centres of commercial activity.
"People want to live close to the city mainly because of jobs. If you live in the city, the demand for your labour is higher," Mr Albin said.
And while Sydney is trying to alter the concentration of jobs in one centre – Parramatta in Sydney's west is being sculpted into Sydney's second CBD – and therefore disperse housing demand, development is not happening fast enough due to archaic planning laws.
For example, Parramatta is trying to get housing and commercial developers to pay for infrastructure that the city needs, but the higher costs means projects can't go ahead, Mr Albin said.
Even the changes to central Sydney planning,which caps residential development in the CBD, is contradictory, threatening to reduce housing stock even further.
"This could potentially kill the goose which lays the golden egg," Mr Albin said.
Original article sourced from The Financial Review, written by Michael Bleby
Cate Blanchett's Sydney Mansion Back On The Market As Chinese Buyer Defaults On Sale
The Hunters Hill trophy home of Cate Blanchett and her husband Andrew Upton is set to return to the market after the buyer was forced to default given problems getting their funds out of China.
The historic residence, Bulwarra, made headlines when it sold for $19.8 million last August, not only because of its high-profile ownership, but because the sale came less than three weeks after it hit the market.
Property transactions at this level usually involve a 10 per cent deposit, which represents a $1.98 million loss for the Chinese buyer.
The Hollywood A-listers exchanged on the sale of their historic home a year ago and have since moved to the United Kingdom.
Earlier this year China started forcing its state-owned banks to delay or block large sums of money going overseas.
By law, individuals in China are restricted to moving the equivalent of $US50,000 out of the country each year.
Foreign buyers relying on finance from Australian banks hit a roadblock in May this year when the big four started clamping down on loans obtained based on overseas income.
Property developers have reported concerns with smaller-priced investments to foreign buyers defaulting as a result of the crackdown on foreign capital outflows from China.
Until now the trophy home market was said to be immune to the moves because buyers at that level usually already have their money in offshore accounts.
The 3642-square-metre Hunters Hill estate returns to the market this weekend exclusively listed with the agent who sold it last time Ken Jacobs, of Christie’s International.
When it sold last time the result was 60 per cent higher than the previous suburb record, which was set in April 2015 when the non-waterfront mansion of property investor Jana Lanvin sold for $12.85 million
Blanchett and Upton purchased the property for $10 million in 2005 from merchant banker Jim Dominguez and his wife Suzanne.
More than $8 million was spent on a three-year redesign by architects Nadine Alwill and Stephen Lesiuk that almost doubled the home’s floor space and added a self-contained apartment under the swimming pool.
Set on one of the suburb’s largest blocks, it comes with a riverfront tennis court and gardens that were designed by Will Dangar.
Built in 1877 as Erigola, it was originally owned by brick manufacturer Herbert Oswin Weynton, who sold it in 1904 to Arnotts Biscuits company chairman Halse Rogers Arnott for £750.
In 1909 the Arnotts family sold it for £900 to local alderman Charles Adnam Fairland, where it remained until 1958 when it was bought by ragtrader Thomas Powell.
The Blanchett-Upton family have since moved into the historic English manor in East Sussex they bought last year for £3 million ($5.08 million).
Original article sourced from Domain News, written by Lucy Macken
August Feature Properties
Sales Feature Property - 7 Wentworth Street, Randwick
With Centennial Park at the end of the street and its leafy streetscape lined with distinguished residences, it's little wonder that Wentworth Street is renowned as the dress circle of Randwick. Built c1908 on a deep level block with rear access via Earl Lane, this wide-fronted Federation semi has been a much-loved family home for almost 20 years presenting a rare opportunity to buy in this tightly held enclave. A fluid layout from front to back and a sun-filled extension flowing to a leafy garden courtyard with DA approval for a studio are perfect attributes for relaxed family living, all within easy reach of top schools, a choice of beaches and the city.
For me information on this property, please contact Patrick O’Brien on 0439 025 188 or Clint Ballard on 0411 426 600. The first open for inspection will be held this Saturday at 11:00 – 11:45am.
Property Management Feature Property - 801/227 Victoria Street, Darlinghurst
Perfectly positioned in the iconic ‘Top of the Town’ building this ultra modern fully furnished apartment features a private entertaining balcony with spectacular district views, large open plan living/dining area, spacious bedroom with built-in robes, designer kitchen with stainless steel bench tops and gas cooking, stylish tiled bathroom and plenty of storage.
The iconic Top of the Town building is centrally located With 24hr concierge, pool, gym & sauna facilities and within walking distance to everything you need - restaurants, bars, shops and public transport.
Rent per week: $820
Please contact Christy Nochar, our leasing consultant on 0424 753 307 for inspection times.
You May Not Be Able To Afford Their Big Price Tags, But It Doesn’t Hurt To Look, Right?
You don’t have to jump on a plane to take a tour through some of the world’s most amazing properties any more - in fact you don’t even have to be able to afford them to get a sneak peek inside.
Property watchers can now access a global property network with listings in 56 countries across Europe, the Americas and the Asia-Pacific region on the newly launched realestate.com.au/international.
According REA Group chief executive officer Tracey Fellows people who love looking at property will now have easier access to international listings of all types and values.
“Whether they are interested in a beach house in Jamaica, a warehouse in Brooklyn, a villa in Thailand or even a castle in the French countryside.,’’ she said.
Some of the more amazing listings include:
172 BLISS CANYON RD, BRADBURY
$AUD 104,202,848
With seven bedrooms, seven full bathrooms and three half bathrooms, this majestic home sits on 3ha of land within the guard-gated Bradbury Estates.
The home, which took eight years to build, has amazing ocean views.
Of the seven bedrooms, two are master suite sized. The home has a two-storey library, 2000 bottle wine cellar, and a poker lounge.
Outside is an infinity edge pool, a 15 person spa, and a guesthouse. The home also has a 3D theatre and its own subterranean firing range.
It has high vaulted ceilings with dome ceilings in some rooms with hand painted frescoes and Venetian plaster.
The home has a detached guesthouse with a full kitchen which sits above a ten-car garage. It is listed through Bob Hurwitz of Hurwitz James Company.
125 ROONEY CIR, ASPEN COLORADO
$AUD 106,346,916
With 26 bedrooms and 24 full bathrooms, this Aspen home has plenty of room for when visitors come to stay. Known as Elk Mountain Lodge, the retreat is on 33ha of land at Castle Creek Valley.
The whole estate is made up of a number of parcels including 12 buildings - a main lodge and three single family homes - which are available for separate sale.
Buy the lot and you could set up your corporate retreat business or maybe just keep it all to yourself for your family to enjoy. The property has two trout ponds and a large gym.
It is being marketed through Joshua Saslove of Douglas Elliman Real Estate-Durant.
1000-1220 WATSON DIVIDE RD, SNOWMASS, COLORADO
$AUD 74,442,841
If you are after something a little smaller, this Snowmass Colorado “shack’’ could be the new home you are looking for. Known as Four Peaks Ranch, it has seven bedrooms and eight bathrooms.
It is also being marketed by Joshua Saslove of Douglas Elliman Real Estate-Durant.
The home is high in the Rocky Mountains and has views of Mount Sopris, Mount Daly, Capitol Peak and Snowmass.
The house is on 354 ha and has plenty of trails suitable for hiking or riding.
There is a private beach, which has waterfalls which flow into three ponds.
There are two outside fireplaces, four fire pits and two full kitchens plus a pizza oven.
CANNES, FRANCE
$AUD 139,206,991
The 12-bedroom Palais Venitien in Cannes has panoramic views of the mountains and the Mediterranean Sea. It is on a 2.4 ha property which has a private lake, tennis court and two swimming pools, one indoor and one outdoors. The master bedroom area has it own bathroom and dressing room as well as two lounge rooms.
There are eight reception rooms in the palatial home which includes state of the art technology.
REA Group chief executive Tracey Fellows said the new international section of the website offered potential buyers a way to explore property around the world and gave vendor’s listings exposure to 200 million visits globally each month.
News Corp chief executive Robert Thomson, said the global property network, launched today, cemented News Corp’s position as the largest digital property business in the world.
“By combining the listings - and the talent - of REA Group, realtor.com®, and other partner sites, we are creating an opportunity to enhance listings for consumers and customers around the world, while enabling collaboration with News Corp’s existing stable of real estate businesses and partners, including Mansion Global and PropTiger,’’ he said.
REA Group, parent company of realestate.com.au, is majority owned by News Corp.
Original article sourced from news.com.au
The Most Expensive House In The World Is For Sale
It's on the market for 1 billion euro (A$1.5 billion).
Villa Les Cedres is a 10-bedroom mansion surrounded by 34 acres of botanical gardens on a peninsular between Nice and Monaco. Real estate in the area is considered the most expensive in the world.
Neighbours of the extraordinary home include Microsoft co-founder Paul Allen, the Ferrero family of Nutella fame, and Curt Engelhorn, the great grandson of the founder German chemical company BASF.
When David Compari-Milano bought liquor giant Grand Marnier Group earlier this year, the European distiller also acquired the historic villa. Now the property is for sale, with proceeds going to Grand Manier shareholders.
King Leopold II once owned the property, and Winston Churchill loved painting the exquisite gardens. Richard Burton, Elizabeth Taylor, and Charlie Chapline are all said to have holidayed there.
Original source, The Real Estate Conversation
Local Events
Spring Night Markets at Carriageworks
The Spring Night Market returns to Carriageworks. On Saturday 3rd September from 5-10pm, come and enjoy the best food and wine with over 50 stalls. The Spring Night Market will be an immersive experience with a focus on connecting food lovers, restaurants and chefs with producers. Please visit the Carriagesworks website for more information, http://carriageworks.com.au/
Taste of Coogee
Serving delicious local food and wine, Taste of Coogee will be held over two days, Saturday 3rd September and Sunday 4th September. This year it will be held at Coogee Oval, 10am-6pm. With over 100 stalls, be sure to get a taste of the best eats from local restaurants, (Little Jack Horner, La Spiagga & Coogee Pavilion). This year there will also be cooking demonstrations from some of Sydney’s best chefs. For more information, please visit, http://www.tasteofcoogee.com/
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