Melbourne’s prestige property market is set for a flurry of activity over summer and into next year as buyers see value in a market that has begun recovering from its post-GFC lethargy. But experts warn further volatility in the equities markets could put a damper on buyer hunger for homes worth $5 million and above, while reducing corporate profits will also have an impact. Affluent southeastern suburbs of Toorak, Kew and Canterbury are where the activity in the established homes will be, while the $5m-plus apartments will be sold in the central business district, Southbank and East Melbourne. One local, at Kew, will aim to capture the demand for trophy homes in the Victorian capital, putting a home on Swinton Avenue up for auction this weekend with hopes of reaping more than $9m.
The home, called Swinton, has views over the river and city skyline, with the recently renovated house on a 2013sq m block of land about 7km from the CBD. Built in 1856, the Italianate six-bedroom, five-bathroom property includes a music room, formal sitting and dining rooms, and a luxurious kitchen. There is also a guesthouse that has been converted from horse stables. The agent marketing the property, Abercromby’s Real Estate director Jock Langley, says there has been a surge of inquiries in the high-end market in the past month. “If you had asked me three weeks ago I would have told you that we had probably been in a soft spot, partly because there wasn’t enough stock on the market,” Langley says. “But now the stock is available and there is certainly more buoyancy. Generally speaking the market is strong, the prices are solid and there is plenty of buyer activity.” He attributes the recent buyer ebullience partly to a lowering dollar, which has enticed a host of expatriates to buy local homes. Kay & Burton director Gowan Stubbings says the luxury agency last week had its strongest week of sales. The agency sold five homes over the price of $10m in just seven days, and many between $5m to $10m in the wealthy municipalities of Stonnington and Boroondara. “It’s a culmination of campaigns coming to an end, the typical business of a spring market, us having good stock and a market that still has a great desire to buy property,” Stubbings says. “For everyone who says that this market is coming to an end, what we have just witnessed is a market that is still in very good condition.” One of the homes sold in the golden week, at 159Kooyong Road, Toorak, with an asking price of $9m-plus, was bought by an offshore buyer. The four-bedroom house, known as Nauroy, includes botanic gardens and a retreat area. Values in the $5m-plus Melbourne housing market have been boosted by more than 10 per cent so far this year, with a potential for similar results next year, according to Australian Property Monitors senior economist Andrew Wilson. “The top end of town in Melbourne has really been flat since 2007 but there is no doubt that it’s back in town this year,” Wilson says. “Toorak in particular has the most depth for that price range.” He adds: “If the stockmarket can find some way of getting to where it was earlier in the year then that will keep momentum going.” MacroPlan Dimasi chief economist Jason Anderson says there is momentum in the luxury apartment market. “There are a lot of people who are getting businesses that are integrated between Australia and Asia, more of them wanting to have an apartment: somewhere to live in Australia rather than just the travelling back and forth and staying in hotels,” Anderson says. CBRE managing director of residential projects in Victoria Andrew Leoncelli says the emerging luxury apartment market in Melbourne has gained traction in the past year. “The trend is towards bigger, more expensive, better quality product,” Leoncelli says. “Wealthy downsizers and the top end of town are now accepting apartments as a way of living and the amount of three-bedroom apartments we sell doubled.” He picks the CBD, Southbank and East Melbourne as the premier destination for penthouses. The offshore market is also prominent in this market. Earlier this year, Leoncelli negotiated Australia’s largest apartment sale, with a Chinese businessman paying $25m for the penthouse at the under-construction Australia 108 apartment tower in inner-city Southbank. Leoncelli is negotiating the sale of a second penthouse at the project to another Chinese businessman for about $23m, although he has declined to comment on this mooted deal. Developer Grocon is marketing a $12m penthouse for its CBD project at 85 Spring Street, while Cbus Property is expected to sell opulent apartments at its planned project at 447 Collins Street. Colliers International managing director of residential Tim Storey says many wealthy families are buying the apartments so they can live close to the city. “The amount of families in these buildings is significant,” Storey says. “This is all driven by demographics.”\ This article originally appeared in The Australian.