What downturn? Sydney’s trophy market hits peak performance

Sydney’s trophy home market has not only been spared the broader market downturn but has recorded its best-performing year for sales in the $20 million-plus range.

The top 20 house and apartment sales alone have totalled about $760 million, and 50 sales for more than $20 million were recorded across Sydney, topping last year’s boom-time bonanza.

The architect Stephen Gergely-designed mansion Ganeden secured this year’s highest recorded sale result.

But, says veteran prestige agent Craig Pontey, “it is only the very top of the market that is still booming. The rest of the market is a bit of a mess.”

Pontey, who signed on to the McGrath brand this year, taking control of the flagship Double Bay agency, said the strength of this year’s trophy market is indicative of the many people who have done well from business or private equity buyouts and are keen to plant as much of that money as possible in a safe haven.

“The fact that the family home isn’t taxed just adds to its attraction,” Pontey said.

Brad Pillinger, who set this year’s top sale price of $62.75 million for the Vaucluse mansion Ganeden, said limited supply and strong demand drove the market, not issues such as eight consecutive interest rate rises.

“No matter what happens to the economy, there’s still only about 200 houses on the waterfront between the city and Watsons Bay, and only ever a few that are genuinely for sale at any given time,” Pillinger said.

“As more buyers enter the market, those houses only become more expensive.”

Forbes Global Properties’ Ken Jacobs said the thing that differentiated this year from recent years was that half of the top sales took place off-market, whereby no public marketing was required.

Nicky Zimmermann and Chris Olliver purchased on the Vaucluse waterfront for about $60 million.

“That’s because there are so many more capable buyers than properties to sell,” Jacobs said. “So when a property is listed, the buyer for it is already known.”

The Agency’s Ben Collier said the oversupply of buyers – many of them returned expats – forced buyers to circle back to grand estates in Bellevue Hill that were trading in the $20 million range a few years ago and had since doubled in price.

Collier points to the Bellevue Hill property Belhaven, bought by recently retired ASX chief Dominic Stevens in 2017 for more than $21 million and resold last month for about $50 million.

Likewise, the Bellevue Hill house sold by fashion designer Camilla Freeman-Topper on Christmas Eve 2018 for $16.5 million was resold by The Agency’s Stephen Chen for $26.5 million to the co-founder of Quadpay Brad Lindenberg.

The surge in trophy home values comes as Sydney’s broader property market copped an 11.4 per cent fall in median values from the market peak in January, according to recently published CoreLogic data.

The Bellevue Hill property Belhaven was bought in 2017 for $21 million and resold last month for about $50 million.Credit:

The ripple effect of that downturn is being felt up the price chain, Collier said. “We’re seeing a significant correction in those second- and third-tier properties of up to $15 million that last year were selling for top prices but are no longer achieving those sorts of outcomes.”

Not included on the list are two neighbouring houses in Darling Point owned by prominent business executive Jillian Segal and her husband, property magnate John Roth. The paper trail to both properties confirmed the sale earlier this year, but settlement is yet to reveal the price.

Last year’s trophy home market was the previous strongest performing. There were almost $700 million worth of sales in the top 20 alone, and more than 45 for the year of $20 million or more – double that of 2018.

Last year had one sale in the top 20 outside the eastern suburbs, in Palm Beach. This year there are six: two in Mosman, two in Palm Beach, and two in Barangaroo.

“The reality is that the rest of Sydney has been under-valued for years compared to the eastern suburbs, and from an international perspective, that has made no sense,” said Forbes’ Ken Jacobs.

“But that looks to be changing as these satellite prestige areas north of Harbour Bridge and on the CBD foreshore become trophy markets in their own right.”