Sydney's mega rich in super prime elite company

If you’re in your $15 million Sydney mansion looking over the harbour, put down the caviar spoon, kick off the Italian loafers, put your feet up on the Yaya and Wenge table and bask in another win.

Defying the international odds, Sydney is one of just five cities globally to record a rise in sales for super prime residential property.

The actual definition of super prime property is as clouded as the tax arrangements of many of global occupants of such premises.

Depending on the source, it can be the top one or five per cent of property values, or in the case of the Knight Frank Global Super-Prime Intelligence Q3 2023 report released Wednesday (29 November), properties valued at US$10 million or more (A$15 million).

While residential sales in many of the world’s mainstream markets are down by 20 to 30 per cent year-on-year, Sydney this latest quarter recorded 21 super-prime sales in Q3 2023 compared to 18 in Q3 2022. The aggregate value of sales in Q3 2023 was A$532 million compared to $372 million in Q3 2022.

A different world

Five markets saw volumes rise through the last quarter on a year-on-year basis, with Hong Kong, Dubai, Geneva, Miami and Sydney seeing more sales in Q3 this year against Q3 2022.

Dubai once again led the ranking of quarterly sales – a position it has held since Q4 2022. London followed in second position, with Hong Kong in third.

Liam Bailey, Knight Frank’s Global Head of Research, said super prime activity has come off the 2021 peak, but the latest results confirm a market still seeing activity above pre-pandemic levels.

“Higher debt costs will continue to weigh on the sector – but a lack of fresh new-build project launches in key markets like London and New York will impact on sales in 2024.”

The super-prime market is driven more than most by new-build completions.

The Knight Frank report noted that the strong sales volumes in 2021 were flattered to an extent by delayed completions from 2020, and to some extent that has impacted the latest figures.

Among the 12 international markets measured, this especially applied to London, New York and Miami, which have been bolstered by completions in luxury schemes that started pre-pandemic.

“As we move into 2024 the tailwind from new build sales will weaken as the lower volume of new project starts through the pandemic begins to be felt,” Mr Bailey said.

“Super-prime markets are inherently international and the recovery in travel volumes through 2023 have helped to support sales – with global flight volumes as one measure – closing in on 2019 levels again.”

That news of a super prime recovery will (or perhaps not) be music to the ears of first home buyers, who on Tuesday learned that the time required to save for a house deposit in New South Wales had blown out big time to eight years.

No sign of luxury market slowdown

Sydney’s super prime property strength shows no signs of taking its leather-bound foot off the Aston Martin’s accelerator.

The biggest shift in the market is not in price or number of super-wealthy outlaying on luxury property, but in the locations they are buying.

Super prime is no longer the sole preserve of eastern Harbour-dwellers with views to the Opera House.

Knight Frank’s Head of Residential Research, Michelle Ciesielski, said this year to the end of Q3 Sydney has seen 71 super prime sales, with no signs of slowing, while for 2022 as a whole Sydney had 108 super prime sales.

“In 2023, 54 per cent of Sydney’s super-prime sales were recorded in the eastern suburbs, a significantly lower share than recorded a decade ago when this prime region accounted for 80 per cent of all super prime sales,” she said.

“The North Shore, meanwhile, rose from a 13 per cent share 10 years ago to 31 per cent in 2023, while the CBD and inner Sydney share has seen only modest growth from 7 per cent to 8 per cent, despite several new luxury apartments built over this time.”

Accessorising with the $15 million apartment

With the broadening of locations for super prime home, has come a shift in the types of properties coveted by the uber-rich.

Apartments, although bearing little resemblance to the unit dwellings of the broader masses, are becoming de rigueur.

Erin van Tuil, Knight Frank’s Head of Residential, said Sydney’s peripatetic elite were gleaning home ideas from their international counterparts.

“Each time our ultra-wealthy population return from overseas travel, we find a growing number seeking the ease of apartment living with exceptional amenities that allow for privacy, security and lateral living, plus a lock-up-and-leave option for their next trip.”

She said buyer appetite is strong, but sellers reluctant.

“Supply from new builds will always be limited given the scarcity of well-positioned sites on the harbour,” she said.

“Increasingly, more apartment sales in Sydney have been reaching super prime status over the past few years than we have seen ever before in our harbour city.

“In the past, it was mostly a prestige home on a large parcel of land transacting at this price point and a handful of penthouse apartments with stunning water views.

“Going forward, there will be an increasing focus by developers delivering super-prime residential projects from the ground floor to the rooftop.”

Such properties were also seen as a safe haven during times of economic uncertainty, Ms van Tuil added.