Asian buyers returning to prestige homes market with overseas back on the rise

Asian buyers, who are a key part of the top-end housing market in Melbourne and Sydney, are quietly making a return.

RT Edgar recently sold this four-bedroom, two-bathroom residence in Melbourne’s Toorak to an Asian buyer for about $12m

Asian buyers, who are a key part of the top-end housing market in Melbourne and Sydney, are quietly making a return, but they are yet to have the same impact they once did.

Overseas buyers have been striking deals in Melbourne’s mansion market before the spring selling season gets under way, even though volumes are low.

Buyer’s agent David Morrell said Asian buyers were now one of the most active groups in an otherwise quiet Melbourne market, where activity had dropped at the premium end during the last month.

Mr Morrell said that at an inspection for one sought-after property in blue-chip Toorak, Asian buyers had made up more than 80 per cent of the 28 groups that went though the home.

“They are back out looking,” he said.

“At the same time, there is a relative shortage of blocks of land on which to build in Toorak.”

Mr Morrell said a number of influences were making potential buyers wary.

“I think people are very cautious about what’s happening globally,” he said, and added that the $2m to $4m market was “really hurting”, partly due to financial pressures from banks.

RT Edgar’s Toorak senior sales consultant Max Ruttner said Asian buyers were very strong in the Toorak market.

“The bigger prestige homes are selling to Chinese families,” Mr Ruttner said, and noted that many had been locals for some years.

37 Irving Rd, Toorak, Victoria.

He cited the attractions of the suburb, including top private schools and the ability to safely park money in premium areas.

Mr Ruttner said Asian buyers typically opted for well-known streets, including Toorak’s Hopetoun Road and St Georges Road.

“They know these positions and there are multiple Chinese buyers chasing these triple-A locations,” he said.

Mr Ruttner said there was a lack of stock on market but he expected it to pick up later this year once there were a few larger sales.

“Confidence in the market breeds activity,” he said.

“More prestige homes will follow in the back end of the year in those third and fourth quarters.”

RT Edgar recently handled the sale of 37 Irving Road in Toorak for close to $12m after the Asian buyer was drawn to the property due to its attractive position. The four-bedroom residence on an 800sq m northeast allotment is on the corner of Grant Avenue, one of Toorak’s famed tree-lined boulevards. It is within a short walk of many of Melbourne’s leading schools, and both Toorak and Malvern Road trams, Toorak Village and High Street.

An Asian buyer also emerged to claim the Schiavello family’s Hopetoun Road residence. Title records show that the buyer paid $21m for the mansion that was formerly owned by former ANZ boss Mike Smith.

An Asian buyer also emerged to claim the Schiavello family’s Hopetoun Road residence in Toorak.

The banker’s family commissioned a Rob Mills renovation before selling the home to Gabriella Starzynski, who is part of the property-developing Schiavello family, for about $12m in 2017. Kay & Burton handled the latest sale.

But not all players are as bullish about the level of interest from the international market, partly as the Melbourne market is faced with hefty tax burdens imposed by the Victorian government.

Marshall White director Marcus Chiminello said the Chinese community played a part in Melbourne’s market, but they had not been dominant this year.

“I would say [they have been] one to two in 10 of our transactions at the high end,” the luxury agent said.

Mr Chiminello said this was not surprising considering some of the road blocks thrown up by the government that were penalising overseas investors.

“It is deterring them,” he said. “But we are still dealing with a considerable amount of second- and third-generation Chinese that are using first-generation wealth to purchase properties.”

Mr Chiminello said the contribution from the international market was at one of its lowest points it had been for some time.

“Our local market is outperforming any external influence from the Asian corridor,” he said.

In Sydney, Steven Chen, who heads The Agency Projects division, said the volume of Asian buyers had “definitely slowed down” after an influx over the last five years.

“There are still high net worths looking at significant properties … from the $10m, $20m, $50m and $100m price points, but not at the volumes we’ve previously seen,” Mr Chen said.

He said at this time last year, Asian groups made up the bulk of inspections at premium open houses, but this was not currently the case.

“They’re still present but not in the volume they had been previously,” he said.

“A lot of that has to do with economic factors in China and current market sentiment.

“They haven’t disappeared completely but volumes are down.”