ASX profits unlock the wealth effect at property’s top end

Is a strengthening ASX the reason that the very top of the property market is booming?

The ‘ghost mansion’ at 29-31 St Georges Rd in Melbourne’s suburb of Toorak

The wealth effect created by a strengthening Australian sharemarket is helping unlock the ultra-prestige housing market and has emerged as one of the drivers behind the recent burst of shifts in the nation’s most exclusive enclaves.

In one of the largest potential moves, an uninhabitable property in the blue-chip Melbourne suburb of Toorak dubbed the “ghost mansion” is the latest home to become available, and is hoped to sell off-market for $80m.

David Yu, director of property developer Ausvest Holdings, is hoping to make a tidy profit on the 7246sq m inner-east landholding.

Should the block on the sought-after St Georges Road sell at that level, it will top the Victorian record for a residential property sale, lset in 2018 when art dealer Rod Menzies sold the former government house, Stonington, in the neighbouring suburb of Malvern, for $52.5m.

Andrew Baines, managing director of agency Andrew Baines & Co, has already shown several potential buyers through the property but said the block “is very much off market”.

“In reality, half of Toorak is for sale if the owner is given an attractive offer,” Mr Baines told The Weekend Australian.

“But, this has always been the case.”

Ray White chairman Brian White said the potential sale would likely have a ripple effect on the top end of the market.

The Toorak property adds to the substantial list of ultra-prestige properties going to market and changing hands in recent months.

In reality, half of Toorak is for sale if the owner is given an attractive offer.

Brisbane’s most expensive property, a cliffside mansion at 1 Leopard Street, Kangaroo Point, is under contract for around $18m to unknown local buyers.

It is the city’s second-largest sale after the same home sold in 2017 to wealthy Chinese couple, Huihui Zhai and Zijian Zheng, for $18.48m.

Heath Williams of Place New Farm secured the latest deal. He said a number of potential buyers had made offers on the home since it was listed in May but fell short of the vendors. expectations.

1 Leopard Street, Kangaroo Point, in Brisbane. Picture: Supplied.

On the other side of the country in Perth, the former home of the late Australian businessman Alan Bond is on the market for $35m after it was listed in October last year. The home on the banks of the Swan River at 89 Watkins Road, Dalkeith, was last sold to Perth socialite Sue Gibson and her former husband, WA mining magnate Steve Wyatt, in 2011 for $39m.

SQM Research managing director Louis Christopher said movement in the top end of the market was unusual given the general volatility due to a very low number of available homes and the weaker economy not instilling confidence in cashed-up individuals.

“Usually, when you have a strong economy, there is a lot more turnover in the top end,” Mr Christopher said. “But the economy isn’t doing very well right now. “It’s a strange time. Perhaps sellers are more willing to meet the market.”

Chief economist at My Housing Market, Andrew Wilson, instead suggested a link to the strength of the Australian stock market, which has already grown over 3 per cent in the year to date after a strong performance throughout 2019.

89 Watkins Road, Dalkeith in WA. Picture: Supplied.

“There is no doubt there is a correlation between the stock market and the prestige property market,” Mr Wilson said.

“The improved stock market has created a wealth effect, perhaps not to the degree of before the global financial crisis, but it is good news for prestige property.”

Back in Melbourne, Mr Baines said the purchase of the Toorak property would very much be for the land only, which has been valued at $11,000 per square metre.

“This is a generational property. It has been about 15 or 20 years since anything like this has become available in Toorak,” Mr Baines said.

Former Hoyts boss Leon Fink had been in the midst of building a French-renaissance-style mansion on the block when the banks took possession of the property in 1991.

The home was never completed and has stood vacant ever since, falling into disrepair and is non-compliant with today’s building standards.

The Stamoulis Mansion at 39 St Georges Rd, Toorak. Picture: Aaron Francis

The generous land size could prove attractive to a wealthy individual looking to build their dream home in a prized Melbourne market or a property developer hoping to take advantage of the attractive prices within the premier Melbourne suburb.

The past decade saw several prestige mansions change hands in big-ticket deals.

Property developer Harry Stamoulis famously paid $24m in 2010 for more than 6000sq m of land at 39 St Georges Rd, Toorak. The former Baillieu family home was later demolished to make way for a private palace, at a rumoured cost of $70m.

The wealthy Chinese owners of 16 Georges Rd, Wang Hua and Xiao “Kylie” Yan Bao, listed the property for $40m. After purchasing in 2013 for $18.58m, the pair controversially demolished the grand 1913 mansion Idylwilde, leaving the block bare to this day.