Buyer enquiry and enthusiasm returns to Sydney’s high-end apartment market
1st City Projects has established itself as Sydney east’s most prolific and sought-after agency representing quality development projects. They are highly regarded for their involvement from site acquisition, funding, planning, marketing and sales and their reputation for providing genuine and highly informed feedback to both developers and buyers is unsurpassed.
Here, directors Julian Hasemer and Brad Caldwell-Eyles, along with new Projects partner, Yaron Foghel, share their experience of the current market in prestige projects.
Strong growth and improved sentiment
The strong growth in property values in recent weeks looks set to benefit High-end apartments sold off-the-plan across Sydney’s eastern suburbs this spring. Buyers in the market for quality off-the-plan apartments, who tend overwhelmingly to be downsizers selling the family home, are poised to take advantage of the price resurgence.
As downsizers confidently list their existing homes for sale, they will turn their attention to a range of appealing new projects throughout Sydney’s prestige locations. Perhaps as a sign of renewed developer confidence, the 1st City Projects team alone is currently representing an array of luxury projects across the eastern suburbs – including Palomar, Bower, Cielo, The Clermont, The Acre and Quartier in Bellevue Hill; Aloft and The Crescent in Darling Point; Dusk, Roseraie, Drift and Six07 in Rose Bay; Pointe in Edgecliff; 23 Gilderthorpe in Randwick; the Oxford Residences in Bondi Junction and AYR in Bondi Beach.
Beyond the staple downsizer audience, other ‘off-plan’ markets driving inquiry include investors (buoyed by low interest costs and recent relaxing of lending criteria); “up-sizers” (seeking to move up the property ladder) and off-shore buyers (returning to the fray)
Sydney’s prime market now outranks Berlin, Dubai and Shanghai for average luxury prices—sitting at around $27,000 – $28,000 per square metre in 2018 (which analysts suggest will increase over the next 5 years).
Topically, a deal worth more than $140 million for the most expensive residence in Australia has been inked for the top three floors of Lendlease’s yet-to-be-built Tower 1 development at Barangaroo South. Despite the vast internal footprint, the sale (pending confirmation) eclipses the $100,000 per square metre level. Such a sale rate would top the previous Australian apartment square metre record of $96,400 set in 2017 when a 280-square-metre penthouse in the Opera Residences development at Circular Quay sold off-the-plan to the Salteri family.
Areas of concern
Whilst there is clearly an uplift in buyer activity and enthusiasm, there remain other areas of consideration that must be addressed in getting buyers across the line. In particular are the issues of consumer confidence in the context of Opal and Mascot Towers and, separately, the matter of project funding (specifically the requirement for pre-sales).
Our property market is somewhat sentimental – issues other than fundamental economics often prevail in the buyer psyche. In ‘off-plan’, buyers need to be confident in the project and the ‘Towers’ have escalated wariness in that marketplace. Apart from the developer’s reputation and the architects and builders involved – buyers want to see progress on the site. A project requiring pre-sales before ‘soil is turned’ almost always elicits questions of both timing of completion and, significantly, the developer’s financial capacity to deliver the project and to deliver it at a high standard.
The good news for the ‘off-plan’ consumer is that the ‘cream is rising’ – and the stronger developers adhering to quality consultants and build are coming to the fore. These premier developers are able to secure quality sites; to afford premium architects; insist on quality builders and to be able to commence construction without pre-sales…all imbuing confidence in the ‘off-plan’ buyer
The ‘off-plan’ and new build market will almost always secure premium sale rates (compared against existing established apartments). This buyer is drawn to a variety of factors, including:
- Sparkling and ‘unsullied’.
- Opportunity to tailor certain finishes and layouts.
- State-of-the-art amenities.
- Potential for value uplift.
- Investor depreciation allowances.
- Foreign purchasing.
‘On the whole, we are seeing a significant increase in enquiry at the moment which has been translating. We are taking deposits weekly, which is certainly an indication of the quality of our stock but is also indicative of a general uptick in buyer sentiment within the high-end, luxury space.’ says Yaron Foghel.
1st City’s Double Bay office is established to cater to an ‘off-plan’ buyer experience. 1stCity Projects has established itself as the ‘go-to’ agency for buyers seeking premium residential apartments.