NOT ON TOP OF IT YET, BUT FAR FROM THE BOTTOM!

NOT ON TOP OF IT YET, BUT FAR FROM THE BOTTOM!

In 2008, people are watching, listening and talking about the top-end property markets across Sydney which are shrouded in mystery and innuendo. These are the property markets of intrigue, envied by a vast majority. Nevertheless, in 2007/2008, these indulgent property markets lost a few staunch supporters with the AUD$ on parity with a weakening US$. Our expats have lost a significant financial force that locals can now reckon with on near level terms.

It should be noted however, that local participants (otherwise known as the ‘Merchants of Real Estate’) have been leading the way in recent years, thanks to the cascading flow-on effects from our financial markets . Unlike ‘Venice’ the tides may turn, but there is still plenty of water under these high bridges.

One needs to look no further than the recently published “Dyson Austen top 10 prestige residential survey” – for the December quarter 2007. A quarter that eclipsed all previous records which identified a $12,000,000 home acquisition at tenth place. This ongoing (and highly competitive), battle for supremacy identified the Eastern Suburbs agents with five recorded sales in the Top 10 along with Mosman agencies who posted the other five. Richardson & Wrench Mosman & Neutral Bay (RWM) posted two sales with our $11,000,000 – Clifton Gardens sale coming in at an ironic equal eleventh place. In the quarter January – March 2004 the highest recorded sale was $11,000,000. In the October – December quarter 2007 a home sale of $11,000,000 failed to make the cut.

We went to Australian Property Monitors (APM) to research how Mosman performed in the October – December quarter 2007. For the record we did not include villas and townhouses (Strata Title) as APM prefer. We prefer Torrens title only (deemed by agents to be a house).

MOSMAN HOUSES – SALES 01/10/2007 – 31/12/2007 DECEMBER QUARTER.

Total Sales Recorded – 111

Total Value Sold – $259,432,500

Median Price – $2,242,500

Average Price – $2,948,096

Highest Price – $14,500,000

(The sale of 16 Hopetoun Avenue for $22,500,000 is yet to settle. As well, 5 Raglan Street Mosman $15,000,000*) *Unconfirmed sale price.

The 2008 top – end property markets have not exactly been rocked by interest rate increases, rather significant reductions in the stock market, margin lending woes, stock lending and short selling speculation. The cover story in last Saturday’s Domain by Jonathan Chancellor, “Fewer worries at the top end” identified some very interesting rationales. “Sydney’s prestige residential market is unlikely to follow the outer suburbs into deep mire. At first glance Sydney’s top – end home market appears to be holding its ground, despite the stock market’s ill wind, but estate agents admit last year’s robust market has yet to re-emerge.”

Quite true – back to APM data where we compared 01/01/2007 to 31/03/2007 house results to 01/01/2008 to 11/03/2008.

MOSMAN HOUSES – SALES 01/01/2007 – 31/03/2007 MARCH QUARTER.

Total Sales Recorded – 119

Total Value Sold – $274,440,420

Median Price – $1,940,000

Average Price – $2,428,676

Highest Price – $11,000,000

Now compare twelve months later.

MOSMAN HOUSES – SALES 01/01/2008 – 13/03/2008 MARCH QUARTER (NOT COMPLETED)

Total Sales Recorded – 54

Total Value Sold – $97,645,500

Median Price – $2,200,000

Average Price – $2,789,871

*Highest Price – $7,000,000

* (This sale actually exchanged last year so it was a December quarter 2007 sale. APM may argue that it had a February 2008 settlement date. However, when and if they correct their reporting procedures agents may treat them more seriously.)

Thus far in 2008, the immediate impression is that the top end has slowed – not so. In excess of $5,000,000 we (RWM) have posted the most sales but because of confidentiality agreements, we have not reported them. Our considered opinion is that this niche market remains alive and well – just that listings of such properties have been scarce compared to previous quarters. When one looks at the March quarters in 2007 (compared to 2008) the median and average prices in 2008 are significantly higher despite fewer house listings. Therein, is a further clue.

Jonathan Chancellor said in his article.”Some top – end properties are never marketed publicly for sale, and several listings have failed to emerge this year, as sellers seek to avoid any suggestive stigma of being vendors under pressure.”

This is where the acknowledged IT real estate agencies come to the fore. Here are the results for a Mosman house that we sold recently (and the online activity).

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