Sydney Mansion Doubles in Value Over 4 Years

DG Institute
DG Institute

Published 5:46 am 26 Nov 2021

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Across the country, Australian properties are being sold for multiples of what they were purchased for just several years prior. 

Three years ago, Mechanic Steve Davidson and his wife Carmen purchased a luxurious, 2000-square metre mansion in Vaucluse for $17 million. Just four years later, they sold that same property for $35 million – more than double their purchase price.

The extravagant Vaucluse property has six bedrooms, seven bathrooms, a billiard room, 11 cars’ worth of garage space, an additional studio apartment, a tennis court and more. 

Whilst the sale price of the Vaucluse mansion is certainly breathtaking, it isn’t an isolated incident. Just a few days earlier, another property sold far beyond its purchase price. 

Also in Vaucluse, another mansion sold for close to $25 million just a week after hitting the market at a $19 million listing price. 

Nine years prior to its sale date, that property was purchased for $6.1 million. 

Vaucluse home owners have enjoyed a sizable boost to their property values over the past five years, with Domain reporting that median house prices in Vaucluse rose 52.7 per cent over the past five years to an average of $6.3 million. 

Combine this with a lack of luxury homes in the area, and Vaucluse properties are now hitting the $20 million-dollar mark regularly.

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Camden Pub sells for four times the previous buying price

All across the country, properties are selling for multiples of their buying price, including commercial properties such as the Royal Hotel in Camden, which recently sold for $19.5 million – nearly four times its purchase price 2015.

In 2015, the Royal Hotel was purchased by Mosman-based developer Tony de Saxe for $5.5 million and was sold to Ben Lawler, the former CEO of Mitchell Waugh’s Public House Management Group, who gained the 1526 sqm site, a 2am liquor license and 24 gaming machines.  

The Royal Hotel purchase joins a suite of other hotels owned by Lawler, including the Riverina Hotel in Wagga Wagga, the Elephant & Castle Hotel in Bathurst and his purchase of the Commercial Hotel in his hometown of Dubbo in 2018.

HTL Property’s Blake Edwards negotiated the sale of the Royal Hotel, stating that “The opportunity [to buy the Royal Hotel] was keenly contested, with the final price reflective of the current undersupply of quality south-west Sydney freehold hotels.” 

The sale of the Royal Hotel follows a busy year for pubs, which have seen a record number of transitions of ownership. 

Andrew Jolliffe, managing director of HTL Property, believes that the premium being paid for pubs is due to their resilient nature:

“Fundamentally pubs are resilient, they have always been resilient, maybe nothing is recession-proof, but these are close to it.”

Luxury market has nearly doubled in the past 12 months 

Australia’s property market as a whole has boomed throughout 20-21, with median property values in capital cities climbing a staggering 20.1% over the past twelve months. However, it’s Luxury home values that have truly gone interstellar.

The number of suburbs with median property prices over $3 million has doubled in the past twelve months, on top of having already doubled in the twelve months prior to that. 

The skyrocketing prices of luxury homes in Australia likely arose as a result of travel restrictions and wealthy Australians seeking out a local holiday destination on their home turf. 

In Sydney, 1429 prime sales were recorded in the first quarter of 2021, making it the highest quarterly figure on record for Sydney, with Prime sales defined as the top 5% of the market. 

And, despite being in lockdown at the time, Sydney was named the world’s leading city for luxury property growth in 2021, according to global property consultancy Knight Frank.

Speaking on Sydney’s luxury property market growth, Knight Frank’s Head of Residential Research, Michelle Ciesielski, said:

“Although Sydney’s mainstream market has rebounded to record 24% annual growth in the year to Q3 2021, the prestige market has experienced a lengthier run of upward trajectory in prices as this market advances in line with other developed global cities.”

“Contributing to Sydney’s prime values, the super-prime market is performing exceptionally well with many suburban records being achieved in excess of A$10 million, especially for those homes located close to the water,” Ciesielski said.

Though it should be mentioned that Australia’s luxury property market has been climbing for much longer than just over the past 24 months.

Analysis of 9315 suburbs by Ray White chief economist Nerida Conisbee found that one in 10 housing markets had a median price of more than $3 million, more than three times the number it was a decade ago.

Can you still find a bargain? 

Both Australia’s luxury property market and the broader market more generally have seen tremendous price gains over the past 24 months, with the number of million-dollar suburbs climbing by more than 200 this year alone. 

So, the question that many Australians have is, are there any property bargains left on the market?

Our answer here at DG Institute is a resounding, YES! 

But, of course, you need to know how to find them. 

Luckily for you, this is precisely what we’ll be teaching at our upcoming Real Estate Rescue event

But, be quick as registrations will be closing in just one week, and this is our final event for the year.

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Lawyer, Asset Protection Specialist and Property Educator

Dominique Grubisa is a practicing lawyer with over 25 years experience. She is a property investor and developer, an entrepreneur with businesses in Australia and Southeast Asia, a speaker, educator, writer and published author.

This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

About DG Institute

Founded in 2009, DG Institute strives to empower everyday Australians to grow and protect their wealth. Our goal is to provide direction, motivation and inspiration to our clients and help them perform at their very best. We do that through our professional services, in addition to teaching them how to grow their wealth through property and business education.

This column has been written for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such.

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