The Market for $5 Million-Plus Homes Is Booming in New York’s Posh Hamptons
The luxury segment recorded a robust third quarter
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Deep-pocketed buyers were busy this summer in the Hamptons, as sales of luxury homes in the affluent New York vacation-home market soared, according to third-quarter reports released Thursday.
“Every price range experienced increases in the number of sales in the third quarter, but the transactions over $5 million soared,” Robert Nelson, executive managing director of Brown Harris Stevens of the Hamptons, wrote in the brokerage’s report.
There were 55 transactions above $5 million, up from 31 a year earlier, marking a 77% increase, according to Brown Harris Stevens data.
The 16 ultra-luxury home sales, defined as properties over $10 million, accounted for 4% of sales, but made up 19% of the total dollar volume last quarter.
The median price of a luxury Hamptons home was $8.5 million in the third quarter, surging 38% from a year ago, according to a separate report from Douglas Elliman, which defines luxury as the top 10% of the market.
More properties in the beach towns are joining the $5 million club every year, according to Douglas Elliman, as this category has continued to double in market share.
The Hamptons has been surprisingly unaffected by this pre-election season that tends to temporarily dampen sales, said Philip O’Connell, executive managing director for Brown Harris Stevens in the Hamptons. Instead low rates have fuelled the market, enabling year-on-year sales to climb back up every quarter.
“A large segment of our buyer population comes from New York City. I think they see a bright future economically, which is driving their confidence in the market,” O’Connell said. “We have the expectation that the market will continue to be very active.”
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Buyer demand, seller confidence and the First Home Guarantee Scheme are setting up a frantic spring, with activity likely to run through Christmas.
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The spring property market is shaping up as the most active in recent memory, according to property experts Two Red Shoes.
Mortgage brokers Rebecca Jarrett-Dalton and Brett Sutton point to a potent mix of pent-up buyer demand, robust seller confidence and the First Home Guarantee Scheme as catalysts for a sustained run.
“We’re seeing an unprecedented level of activity, with high auction numbers already a clear indicator of the market’s trajectory,” said Sutton. “Last week, Sydney saw its second-highest number of auctions for the year. This kind of volume, even before the new First Home Guarantee Scheme (FHGS) changes take effect, signals a powerful market run.”
Rebecca Jarrett-Dalton added a note of caution. “While inquiries are at an all-time high, the big question is whether we will have enough stock to meet this demand. The market is incredibly hot, and this could lead to a highly competitive environment for buyers, with many homes selling for hundreds of thousands above their reserve.”
“With listings not keeping pace with buyer demand, buyers are needing to compromise faster and bid harder.”
Two Red Shoes identifies several spring trends. The First Home Guarantee Scheme is expected to unlock a wave of first-time buyers by enabling eligible purchasers to enter with deposits as low as 5 per cent. The firm notes this supports entry and reduces rent leakage, but it is a demand-side fix that risks pushing prices higher around the relevant caps.
Buyer behaviour is shifting toward flexibility. With competition intense, purchasers are prioritising what they can afford over ideal suburb or land size. Two Red Shoes expects the common first-home target price to rise to between $1 and $1.2 million over the next six months.
Affordable corridors are drawing attention. The team highlights Hawkesbury, Claremont Meadows and growth areas such as Austral, with Glenbrook in the Lower Blue Mountains posting standout results. Preliminary Sydney auction clearance rates are holding above 70 per cent despite increased listings, underscoring the depth of demand.
The heat is not without friction. Reports of gazumping have risen, including instances where contract statements were withheld while agents continued to receive offers, reflecting the pressure on buyers in fast-moving campaigns.
Rates are steady, yet some banks are quietly trimming variable and fixed products. Many borrowers are maintaining higher repayments to accelerate principal reduction. “We’re also seeing a strong trend in rent-vesting, where owner-occupiers are investing in a property with the eventual goal of moving into it,” said Jarrett-Dalton.
“This is a smart strategy for safeguarding one’s future in this competitive market, where all signs point to an exceptionally busy and action-packed season.”
Two Red Shoes expects momentum to carry through the holiday period and into the new year, with competition remaining elevated while stock lags demand.
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