A scarcity of large, luxury apartments is fuelling record prices across Australia’s prestige market.
An ageing population with a significant amount of equity in their homes, eager to downsize and simplify their lifestyles, is now grappling with an acute scarcity of oversized, high-end apartments.
While there is an increasing number of luxury homes being developed for that large “rightsizer” market, it’s nowhere near enough to prevent the prestige squeeze.
“There’s just a chronic shortage of the right kind of high-quality product being delivered,” says Richard Temlett, national executive director of research at property advisors Charter Keck Cramer, who’s been working on a report about the state of the apartment market. “With building costs having risen by 30 to 50 per cent since the pandemic, projects are also now setting new price points across Australia.
“Even in Melbourne, one of the softest markets for new apartments, prices are breaking records, and the price per square metre in Sydney is reaching $100,000, especially if there are views of the harbour and bridge, and $50,000 in Brisbane with views of the river or CBD.
“There is a lot of development going on, but this market is very demanding.”
Empty-nesters looking to sell large family houses and move into apartments don’t necessarily want smaller floor plates, Temlett says; they just want liveable, functional, well designed space. That could be two, three, or four bedrooms, plus a second living area, and often features good entertainment areas with views.
They’re often cash buyers, unaffected by interest rate moves, but they demand excellent fixtures and fittings, developers and builders with a track record who’ve invested in their brands. They are willing to pay top dollar for products that fit the bill.
Sydney’s beachside scarcity
Another boutique-type development is exciting a lot of interest in Sydney, and this time it is a series of new “lock-up-and-leave” houses. The Bronte Collection comprises nine free-standing luxury four-bedroom homes, starting from $13 million, overlooking the beach.
Ed Eve, general manager of development for NSW at developer Fortis, says the low maintenance houses appeal to downsizers, as well as families and younger, aspirational buyers, as an alternative to apartments.
“We’ve had a lot of inquiry and demand, and are now actively negotiating with a few purchasers,” Eve says. “We’re at a price point where people like to see the project under construction and a little closer to completion, which will be before the end of next year – so, now is the point that we’ll start to advertise.
“There are a lot of people looking for quality in blue-chip, exclusive suburbs, but it’s scarce.”
