From the terrace of his large, Tuscan-style house in Greenwich, on Sydney’s Lower North Shore, where he has lived for 32 years and raised a family, Dennis Karp still delights in looking out across the harbour, with a view of the world-famous Opera House beyond.
“Greenwich is one of Sydney’s lesser-known havens. It’s a very quiet harbourfront peninsula suburb, so traffic is never just passing through on its way to another destination,” says Karp, a South African mining company executive chair in his early sixties. “I question whether there is a more beautiful way to commute to work anywhere in the world, taking the Greenwich ferry across the harbour on a 15-minute journey to the city.”
Proximity to the water is what many Sydneysiders say they prize most about their city — and its wildly meandering coastline offers plenty of opportunities to enjoy it. “It’s what makes Sydney so beautiful in comparison to other cities, the fact that you can live on or near vast stretches of water and be within 20 minutes of Australia’s economic centre,” says Chris Orr, director of residential at estate agents Savills Australia.
Abundant as Sydney’s waterfront locations are, however, the supply of high-quality properties in them is not — particularly in the areas that are most sought-after among its mainly domestic, ultra-high-net worth population. And these buyers have been out in force recently. Erin van Tuil, head of residential at estate agents Knight Frank Australia, says that 42 homes sold for US$10mn or above in the last three months of 2023, double the number in the previous quarter and nearly double the 22 sales in Q4 2022.
The lack of supply is expected to cause luxury home prices to increase by more than every other global city, according to Savills, which is predicting growth of between 8 and 10 per cent this year. It expects most other markets to remain flat.
With international buyers hit by high fees and being more or less restricted to purchasing new-build homes, Sydney’s prime property market is almost entirely local. “It’s the most expensive market in the country and out of reach for most so it’s an exclusive club,” says Orr.
With most members of that club wanting a harbour view, frontline water properties in Sydney command a higher premium than waterfront properties anywhere else in the world. Knight Frank calculates that waterside homes cost 118 per cent more than similar homes inland.
I’d been watching the prices rise from A$950,000 to A$1.1mn in 14 months. I missed out on two and I knew if I didn’t get one soon, I’d be priced out of the market
Homebuyer Susan Brandrick
At the very top end of the market are homes such as the A$100mn ($65.38mn) penthouse at One Barangaroo Crown Residences, a luxury hotel-branded scheme in a newly regenerated area of the city centre near the Sydney Harbour Bridge. The penthouse is one of just four of the development’s 76 units still for sale. “Six transactions were valued in excess of AU$40mn and the lowest-priced marketed at A$9.5mn,” says van Tuil. She adds that 90 per cent of the properties have sold to Australian owner-occupiers. “We have retirees, young tech entrepreneurs and children heading off to school in the morning.”
But the nature of Sydney’s winding coastline means that the city’s most expensive waterfront areas are dotted all over, from the Northern Beaches (where the average house price is A$2.6mn, according to PropTrack) to the Eastern Suburbs, such as Point Piper, where 44-year-old Australian tech billionaire Scott Farquhar paid A$130mn in 2022 for a Scottish baronial-style mansion called Uig Lodge. Point Piper, adds van Tuil, “was the go-to suburb for wealthy buyers before the emergence of city-centre luxury living in the last five years”.
Surry Hills, near the Central Business District, was among the first central neighbourhoods to become gentrified. Prices there rose 20 per cent last year, more than any other suburb, and the median sold price in 2023 was $24,352 per sq m, compared with the Sydney average of $2,590 per sq m.
“There’s a relatively gritty and interesting inner-city component to living in Surry Hills,” says long-term resident Robi Constantinou, 71. She singles out as highlights the thriving LGBT+ community, good bars and a restaurant scene that she describes as going through a “golden age”.
But across the city, affordability remains a big issue. Despite interest rates being at a 12-year-high of 4.35 per cent — and the average mortgage rate currently 6.8 per cent — the median house price increased by 11.7 per cent in the year to February and stands at $1.395mn, according to CoreLogic data. The median property price is around 13 times the median income, leading the Committee for Sydney think-tank to declare it the sixth most unaffordable city in the world for housing.
There is added pressure for buyers from the fact that many properties are sold at auction, to encourage competing bids. “And the guide price is generally a lot lower than what the owner is willing to accept, just to get buyers interested,” says 49-year-old Susan Brandrick, a midwife originally from Kent in the UK. In December, she bought a three-bedroom town house in Matraville in the Eastern Suburbs, a 15-minute walk from Malabar beach, for A$1.1mn.
“It’s on a complex built in the 1980s and it’s quite unattractive, but it ticks boxes for me and my three teenage children,” she says. “I’d been watching the prices of these houses rise from A$950,000 to A$1.1mn in 14 months. I missed out on two and I knew if I didn’t get one soon, I’d be priced out of the market,” she says.
The need for more housing at all levels of the market, fuelled in part by record immigration numbers in 2023, has resulted in the rezoning of land for residential development — including in some heritage areas with train stations such as Roseville, 12km north of the CBD, where the median house price is A$3.6mn, according to PropTrack data.
While some residents welcome new development, especially in areas such as the Inner West — “which is in desperate need of urban renewal”, says Orr — in the wealthy Eastern Suburbs, Nimbies are out in force, he adds. “The argument is that additional density will congest roads and stifle infrastructure.”
As Sydney becomes more densely populated, “it will push up the value of land that is not able to be developed”, says Nick Boyd at Belle Property, part of the LeadingRE network. The affluent Balmoral Slopes, he thinks, will become an even pricier haven for buyers as its topography and harbourfront location make development difficult.
Dennis Karp is relieved for now, at least, that while his neighbouring suburbs of St Leonards and Lane Cove are home to substantial new development, Greenwich remains largely unchanged — “aside from a medium-size home for over 55s and the occasional renovation”, he says. “It’s a suburb known for its natural beauty and populated by people who stay for a very long time.”
Sydney’s property market has been on a rollercoaster of late. After rising sharply in 2020 and 2021, prices dropped a record 12 per cent in 2022, due to the rising cost of mortgages. Prices started rising again last year.
Foreigners cannot buy resale properties in Australia unless they live in the country for work or study — and they must usually sell the property when they leave. Fees for those that do are increasing this year.
In New South Wales, foreign buyers must pay a stamp duty surcharge of 8 per cent on top of the standard stamp duty fee. So, a foreigner buying a A$1mn new-build property would incur a total stamp duty fee of A$120,000.
House, Freshwater, auction guide price A$11mn
A five-bedroom house on Kooloora Avenue in Freshwater, 100 metres from the beach. The property is arranged over two floors and features an open-plan living area, a large balcony with built-in barbecue and a self-contained garden flat. Available with Belle Property .
Apartment, Kurraba Point, A$12mn
A three-bedroom, three-bathroom apartment in Kurraba Point, a harbourside suburb on the Lower North Shore, 4km from Sydney’s Central Business District. The property has 181 sq m of internal living space and includes a home office. Available with Savills.
Penthouse, Barangaroo, A$100mn
A six-bedroom penthouse in the Crown Residences at One Barangaroo. The apartment, which includes a cinema, gym and private pool, has nearly 800 sq m of living space and views of the Sydney Harbour Bridge and the Opera House. It is on the market with Knight Frank .
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