If you have $11 million sitting in your bank account, you might feel like the king of the world in most parts of the planet. But in Bellevue Hill, Sydney's wealthiest pocket, that kind of cash gets you a middling house on a standard block, and it's about to be turned into rubble. Domain's latest data shows a 29.3 per cent price surge in the 12 months to March, leaving the rest of the Sydney market, which grew by 6.6 per cent, stuck in traffic.
Dr. Nicola Powell, the chief of research and economics at Domain, puts this massive growth down to simple scarcity. There were only 83 recorded sales in the suburb over the past year, meaning houses there are held onto tighter than a winning lottery ticket. For the ultra-wealthy, who don't care about interest rate hikes or the cost of a loaf of bread, these properties are viewed as trophy assets—a safe way to park their cash long-term.
That's a function of the scarcity of supply in the suburb, with only 83 sales in the last year. This very limited turnover means houses there are very tightly held.
While the suburb doesn't boast a harbour or beach front, the address alone commands a premium. Last year, Gretel Packer reportedly shelled out $59 million for a property right next to her existing home. Other eye-watering deals include 69 Victoria Road changing hands for $50 million, while 106 Victoria Road fetched $26 million. The higher the price, the faster these homes move.
Prestige agent Brad Pillinger notes that the area was actually considered undervalued until about three years ago, when a string of high-profile sales changed the narrative. This included a $61.5 million mansion purchase by freight boss Arthur Tzaneros. The seller of that property, flower mogul Leo Lynch, didn't waste time, using his payout to drop $76 million on the nearby Leura mansion.
If you reckon $11 million buys you a turnkey mansion with a pool and a home cinema, you're in for a rude shock. Oliver Lavers, an agent with TRG, recently sold a four-bedroom home on Bunyula Road for $10.4 million, which is currently being demolished to make way for a dual-occupancy duplex. He is now listing 34 Beresford Road at the $11 million mark, noting it sits right on the border of Rose Bay.
The appeal for these buyers goes beyond just the zip code; it's about having a big block of land close to the city, Bondi Junction, and top-tier schools. Yet, there's a strange irony playing out in the property market. Houses are shooting for the moon, while apartment prices in Bellevue Hill have dipped 8.1 per cent to a median of $1,655,000. Powell explains that unit buyers aren't quite as shielded from the rising cost of living as the mansion-buying crowd.
Powell's explanation is simple: unit buyers are just as affected by the rising cost of living as everyone else. This means apartment prices in the area are dipping, despite the overall growth in the market.
Looking ahead, federal budget changes regarding negative gearing and capital gains tax could pour even more petrol on this fire. Experts anticipate that wealthy owners will pour even more money into renovating their primary residences, as these gains remain tax-free. This trend ensures the sound of jackhammers in Bellevue Hill won't be stopping anytime soon, as owners look to build bigger and better on their prime soil.