AVRA AT BONDI BEACH SETTING A NEW STANDARD FOR LUXURY LIVING

From the Spring 2024 issue of Kanebridge Quarterly, out now. Order your copy here.

A glittering stretch of suburbia flanking the northern reaches of Sydney Harbour, the Lower North Shore is synonymous with affluence and coveted trophy homes. The drawcard for deep-pocketed house hunters is the area’s quiet leafy streets, prestigious schools and the opportunity to secure a waterfront property or an enviable harbour view. For cashed-up buyers, both big ticket items sit high on their wish lists.

Mosman leading the charge

While the Lower North Shore is home to prime high-profile suburbs like Neutral Bay, North Sydney, Cremorne, Crows Nest, Milsons Point and Kirribilli, it’s Mosman that takes centre stage when it comes to head-turning real estate. The large harbourside suburb is home to three sales over the $30 million mark.

In 2022, a Stanley Avenue mansion on 1200sqm fetched $33 million and an Iluka Road home on 1700sqm achieved an undisclosed amount in the “low $30 millions”. A grand contemporary residence on 883sqm The Grove in Mosman exchanged in March for $30 million, the highest suburb price for 2024. Despite the sky high price tags, Mosman’s 12-month house median was $5.744 million, up 10.7 percent over the year, according to PropTrack.

Michael Coombs, director at Atlas by LJ Hooker, secured all three high-profile sales and says the local market has had a good calendar year to date.

“It’s no longer a cycle of traditional seasons, but activity is more driven by the greater economy and confidence,” Coombs says. “We saw that taper off at the end of the last quarter of 2023 so we actually held a few of our high end properties back. It paid off because about 90 percent of our sales this year over $20 million sold in March.

“If you go back five years, about 80 percent of buyers were in that lower end, under $10 million. Now I’m finding a significant amount of activity above that (level). Although it’s not necessarily booming, there’s just not a lot of quality stock in that upper end luxury market, but there are plenty of buyers around.”

More buyers, greater demand

An increasing number of buyers are prepared to play the waiting game, says Coombs, fuelling a local trade in under the radar, off-market deals.

“We’re probably doing just over 20 percent of our sales off market. The key drivers are those wanting privacy but sometimes, because these properties can be quite unique, buyers wait for them to come up. Then when a possibility arises they’re prepared to pay what they need to secure them,” he adds.

Scott Thornton, director of BresicWhitney’s newly opened Lower North Shore office, says the most active buyer profiles in the area are young families and professional couples.

“These buyers are looking for community, accessibility, and the lifestyle that the Lower North Shore’s harbourside suburbs offer,” Thornton says. “There’s also strong demand in the prestige market between $5 million and $10 million, as there’s persistent interest in architect-designed or more unique homes.”

Some buyers, he says, are crossing the bridge in search of better value.

“They’re not only locals looking to buy their first home or upsize, they’re also buyers coming from Sydney’s other markets. There’s a significant migration underway into the Lower North Shore from buyers currently in areas like the Eastern Suburbs or Inner West.

“We’re seeing this happen day-in, day-out with up to 5000 buyers a month actively looking for Lower North Shore property.”

It’s not all about the economy

While the wider Australian property market has slowed in response to high interest rates and greater cost of living woes, the Lower North Shore runs its own race according to  Thornton.

“Despite the broader economic uncertainties affecting some buyers and sellers, both local and international buyers recognise the Lower North Shore as a place that offers location, lifestyle and community. Homes are also generally quite tightly held and passed through generations, which keeps competition high and supports ongoing price stability,” he says.

“The combination of limited supply and good demand has, in some ways, insulated the market from any significant declines in values.”

Nerida Conisbee, economist with Ray White Australia, says cashed-up buyers have the power to move at their own pace.

“There are a lot of buyers who aren’t necessarily getting a loan which puts them in quite a different financial situation compared with someone trying to get into the market or simply upgrade,” she says. “The rich are getting richer — it’s not just a saying. There’s statistical evidence to show that.”

The Wealth Report 2024, compiled by global real estate consultancy Knight Frank, found that in Australia the number of ultra high net worth individuals — defined as those with a net worth of $30 million or more — rose by 2.9 percent between 2022 and 2023 to reach 15,347 people.

The report tipped that the figure is expected to rise a further 27 percent by 2028 to 19,491.

“That concentration of wealth is happening at the higher end, and it impacts Sydney premium markets because owning your own home is a tax-free asset,” Conisbee says. “There are definite benefits to buying a multimillion-dollar home if you want to put your money somewhere safe. And we know Sydney property is seen the world over as very safe.”

The future is heading up

Conisbee adds that plans in the pipeline to improve the North Sydney local government area are a bonus for potential buyers.

“There’s a lot of investment going into North Sydney,” she says. “There’s a new metro line improving accessibility and the council has some grand plans to open up the CBD and make it more pedestrian friendly while also improving the weekend and nighttime economy. Previously, it’s been very much a 9 to 5 worker area.”

North Sydney Council’s proposed $11 billion facelift to the country’s fastest-growing second CBD would create an extra 19,200sqm of parks and plazas — with an additional 25,000sqm of land proposed in a new bridge over a section of the Warringah Freeway.

Part of the new look Lower North Shore is welcoming new residential development.

“There are proposed changes to bring more density to some of the area which will allow for a larger mix of different apartments types, including one and two-bedroom units,” says Tim Abbott, of Ray White Projects Lower North Shore.

“Predominantly, the largest part of the project market has been with downsizers wanting to stay in the area and they’re looking for larger three and four-bedroom apartments. Developers have been designing specifically to meet that target market, knowing there’s such an undersupply there,” he says.

The apartment market north of the bridge comes with an eclectic price range, with luxury one-bedroom pads securing $1 million, while one furnished penthouse in the recently completed Kurraba Residences building by Third.i Group in exclusive Kurraba Point came to market earlier this year with $50 million expectations.

Abbott says he has high hopes for the future apartment market on the Lower North Shore as the landscape changes to match demand —and budgets.

“The luxury end starts at about $4 million, but of course it can go a lot higher than that, it just depends on size, finish and the views. The good thing is, with the projects now coming onto the market there’s a range to cater for a lot of different buyers. They’re no longer just building all the same thing and that’s a positive for all buyers.”