The blue-chip Sydney suburbs that recorded the strongest price growth over 12 months are all near the harbour or coast, except for one in Sydney’s inner west.
Among Sydney suburbs with a median house price above $4 million, Bellevue Hill in Sydney’s east recorded the highest median growth over the 12 months to the end of March, rising 29.3 per cent to $11 million.
It was followed by northern beaches suburbs Fairlight and Manly, with annual growth of 27 and 20.5 per cent, respectively. Strathfield, in the inner west, was next in line with a 14.5 per cent annual jump.
The remaining six suburbs making up the top 10 were all in the east: Vaucluse (up 13.5 per cent), Bondi (up 7.6 per cent), Dover Heights (up 6.5 per cent), Woollahra (up 5.6 per cent), Coogee (up 4.6 per cent) and South Coogee (up 3.2 per cent).
LJ Hooker head of research Mathew Tiller said: “The prestige market remains resilient … [it’s] supported by property scarcity, lifestyle appeal and strong household wealth.”
Tiller noted that ultra-prestigious homes are often funded with business income, generational wealth or investments as opposed to a salaried income.
He said that if a typical $5 million property was financed through the bank, household income would need to be about $700,000 to $1 million a year.
Economic conditions have softened this year due to global conflicts, inflation, cost-of-living pressures and higher interest rates, Tiller said, noting that prestige buyers “do get impacted, probably not as much as the bottom end … they’re generally either self-employed or they have independent investments independent of each other, so they can have multiple income sources”.
He also said that some buyers “flip high-end properties, so we have some households that move into prestige properties for, say, 5 million, and do renovate them to a high end and on-sell them for the gain”.
Michael Clarke, principal of Clarke & Humel Property, said that since COVID, people who had wanted to be closer to the city now preferred Manly or Fairlight to lower north shore suburbs such as Mosman.
“The locals have known about it forever, but it’s the out-of-area buyers who have really started to compete with everybody else in order to secure their piece of paradise,” he said.
“When people were forced to stay in their LGA over COVID, it meant that people looked at the physical environment more than any other time and … there’s nowhere that can compete with Manly and Fairlight in Sydney.”
The area is renowned for world-class beaches, magnificent sunsets and beautiful bush walks, Clarke said, adding that it has a “really healthy lifestyle”, with residents able to jog or surf at several beaches.
Clarke said it would be difficult for buyers to get a nicely finished freestanding home for Manly’s median house price of $5.3 million, or Fairlight’s median house price of $4,102,500, but buyers would be able to secure either a nicely finished semi or an entry-level freestanding home.
Strathfield was the only suburb in the top 10 that was not near water.
Norman So, principal of Belle Property Strathfield, said buyers were predominantly doctors, lawyers and business owners with young families who attend the local private schools.
“Strathfield has always been the drawcard for family living because we have the best schooling here,” he said, noting that it was important for buyers not only to have private schools but also parks, railway stations and shops – and the suburb has all four.
Once Strathfield residents retire and their children have completed their schooling, they typically want to move to the water – “either eastern suburbs or Breakfast Point,” said So.
Strathfield’s median house price was $4.38 million at the end of March, but So said that “would normally get you an entry-level home in Strathfield on a 600-square-metre block that would require another half a million dollars in renovations”.
He said that he sells land for a 700-square-metre block at between $4 million and $7 million.
“History has always shown that Strathfield was one of the most prestigious suburbs in Sydney. I’ve always called it the ‘Mosman of the Inner west’,” said So. “There’s always strong demand.”
His record sale was a year ago at 17 Firth Avenue, which fetched $16.6 million, and the market has risen further since then.
“Throughout the last six to 12 months, despite the market cooling a little bit, Strathfield still moved from strength to strength,” So said.
