Australia’s Prestige Lifestyle Property Boom
Amid Covid-19, areas outside major cities see a surge of interest and new buyers.
By Michelle Singer
Wed, Nov 4, 2020 4:44am
6 min
6 min
Many wealthy Australians are leaving the city and heading for the hills, or the beach, desperate to find a luxurious hideaway from which they can work and play.
Relocating to some of the country’s most desirable regional locations is an unexpected silver lining for the prestige property market after the pandemic resulted in strict lockdowns, social-distancing measures across the country, and a ban on in-person inspections and onsite auctions.
It didn’t stop buyers from house hunting online, though, and that’s translated into a surprisingly active year for many regional real estate agents in Sydney’s northern beaches, Northern New South Wales’ Byron Bay, Victoria’s Mornington Peninsula, South East Queensland and Tasmania’s east coast
“We’re very busy and we weren’t expecting that back in March,” McGrath Estate Agents Avalon senior sales consultant James Baker said from the Northern Beaches, 50 kilometres north of Sydney.
“We were expecting it to be a tough time up here. Last time there was a recession and downturn [after the global financial crisis] the Avalon Beach, Palm Beach, Newport market was very slow,” he said.
More than a decade on, it’s a different story. People were already starting to work from home and change was occurring, Mr Baker said, and the pandemic has only accelerated that trend.
Meanwhile, the introduction of more reliable and faster internet services, coupled with the acceptance from businesses to allow their staff to work remotely, has also helped facilitate the trend.
“Some people are still working out whether this will be a long-term thing and there’s a bit of uncertainty among our clients. But for many who have holiday homes in New York, Greece or closer to home on Hamilton Island in Queensland, they can’t get to them,” Mr. Baker said.
“They’re very wealthy and they want to know they’ve got a place to get away to,” he added. “Everyone is looking for lifestyle and safety.”
Northern Beaches
The increase in demand is putting pressure on prices in the Northern Beaches area, predominantly on properties valued at $3 million or more.
Homes such as the luxurious five-bedroom, five-bathroom property on Pittwater Road, Bayview, with 180-degree views of Pittwater and Lion Island, sold in September 2015 for $4.4 million.
Five years later, it hit the market again, this time in the middle of the pandemic. It attracted three offers, and although the sale price is confidential, Mr Baker confirmed it sold for more than its $5.5 million price guide.
Byron Bay
An hour’s flight north of Sydney, or 750 kilometres by car, the southeastern coastal town of Byron Bay is also experiencing some of the most intense buyer action in the country.
Once a sleepy surf town, Byron Bay has transformed in recent years and has become a trendy destination for those escaping the city, and the onset of Covid-19 has only heightened the town’s appeal.
Its relaxed atmosphere and beautiful coastline has long been a sought-after destination.
A beachfront home on Marine Parade in Wategos Beach hit the market in the final week of September sold within five days for a suburb record between $20 million to $22 million through LJ Hooker Avnu managing director Michael Coombs.
The sellers, recruitment firm Morgan & Banks co-founder Geoff Morgan and his wife, Ros, bought the 664-square-meter beachfront site for A$1.2 million in 1994, according to sales records, and built an architecturally designed four-bedroom, four-bathroom resort-style holiday home.
SQM Research data shows Byron Bay’s property listing inventory at its lowest in the past decade with only 128 properties for sale as of Aug. 30. The number of properties for rent in the area has also plummeted, with vacancy rates dropping to 0.5% in August from a high of 7.5% in July.
Queensland
Across the border in Queensland, prestige homes and apartments in popular holiday destinations such as Noosa Heads have achieved higher-than-expected prices, multiple offers and significant interstate interest.
Century 21 managing director David Conolly confirms offshore, interstate and local interest has been strong.
“We’re not getting everyone here [due to border restrictions], but we’re still selling everything we can get our hands on,” he said.
“Noosa has been put on the map as a place to live and bring up your family,” Mr Conolly said “Covid has kicked our premium market forward significantly.”
In the final week of September, two apartments sold for about $3.5 million without hitting the open market, and a waterfront home on Mossman Court in Noosa Heads sold for $6.4 million in late August after 150 inquiries.
Victoria’s Mornington Peninsula
Online traffic shows Australia’s most-viewed properties of 2020 are lifestyle homes with wow factor in highly desirable locations either coastal or mountains.
Search activity data from realestate.com.au has confirmed the trend among home buyers is for dreamy mansions in aspirational lifestyle locations.
REA Chief Economist Nerida Conisbee said those who were not tied to a central lifestyle for work were prioritizing lifestyle.
It meant areas such as the Central Coast and Southern Highlands of NSW—a 90-minute drive north and south of Sydney respectively—had regularly appeared at the top of search activity this year, alongside property on Victoria’s Mornington Peninsula.
RT Edgar Flinders agent Peter Kennett has worked in the industry for more than three decades and five years ago bought himself a home on the Mornington Peninsula.
“Even 10 years ago, this area was attracting me for all the right reasons,” Mr Kennett said. “I’m originally from the land, and I did a lot of competitive horse riding. I also like wine, good restaurants and golf.”
Melbourne
Melbourne has experienced tougher lockdowns than any other city in Australia, with two highly restrictive periods of movements, curfews and social distancing measures introduced in March and July when cases spiked for a second time.
It has done little to stop wealthy buyers seeking refuge in the area, which Mr Kennett describes as “the Victorian Byron Bay” with its coastline, world-class wineries, restaurants and myriad of golf courses.
“You talk to people who have holiday houses down here, and they’re now thinking about making this permanent, how they can work remotely,” he said.
“We’re getting a mix of age groups, couples and families in their 30s and 40s who are deciding there’s good education here and a lifestyle that allows them to easily get to Melbourne for work or to see family,” Mr Kennett said.
Since Covid-19 case numbers have eased and movement restrictions were starting to lift, Mr Kennett expects October and November to be busy. Within a week of relaunching the marketing campaign to sell a 28-acre private boutique vineyard and luxury home on Rogers Road at Boneo, it was under offer.
Mr. Kennett said the sales campaign had been paused after in-person inspections were banned but within four days of resuming the marketing on Oct. 1, three offers were made and the property sold well above the $6.5 million to $7.15 million price guide.
Tasmania
The closure of borders to Tasmania has been a blessing and a curse for the real estate industry.
Borders have been closed to all non-essential travellers since March, with mainland buyers resorting to online viewings via digital means.
The state government’s handling of the pandemic, along with its natural beauty, has meant Tasmania’s appeal is greater than ever to city slickers looking for a regional lifestyle escape.
Knight Frank agent Rodney Rawlings has seen extraordinary online interest in a luxury cliff-top property on the Tasman Highway, Four Mile Creek, 150 kilometres east of Launceston, with a A$2 million price expectation.
He’s fielded inquiries from mainland Australia as well as locals and expects the opening of borders, potentially occurring in December, to bring a rush of inquiry, if it hasn’t already sold by then.
“Tasmania is such a safe haven, and because we’ve performed so well during the pandemic, this is going to have some real appeal when the borders open,” Mr Rawlings said.
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What a quarter-million dollars gets you in the western capital.
Alexandre de Betak and his wife are focusing on their most personal project yet.
Unmarried home buyers say they are giving priority to a financial foundation over a legal one
By DALVIN BROWN
Mon, Nov 25, 2024 4 min
4 min
The big wedding can wait. Couples are deciding they would rather take the plunge into homeownership.
In reshuffling the traditional order of adult milestones, some couples may decide not to marry at all, while others say they are willing to delay a wedding. Buying a home is as much, if not more of a commitment, they reason. It helps them build financial stability when the housing market is historically unaffordable.
In 2023, about 555,000 unmarried couples said that they had bought their home in the previous year, according to a Wall Street Journal analysis of Census Bureau data. That is up 46% from 10 years earlier, when just under 381,000 couples did the same.
Unmarried couples amounted to more than 11% of all U.S. home sales. The percentage has climbed steadily over the past two decades—a period in which marriage rates have fallen. These couples make up triple the share of the housing market that they did in the mid-1980s, according to the National Association of Realtors.
To make it work, couples must look past the significant risk that the relationship could blow up, or something could happen to one partner. Without a marriage certificate, living situations and finances are more likely to fall into limbo, attorneys say.
Mark White, 59 years old, and Sheila Davidson, 62, bought a lakeside townhouse together in Newport News, Va., in 2021. But only her name is on the deed. He sometimes worries about what would happen to the house if something happened to her. They have told their children that he should inherit the property, but don’t have formal documentation.
“We need to get him on the deed at some point,” Davidson said.
White and Davidson both had previous marriages, and decided they don’t want to do it again. They also believe tying the knot would affect their retirement benefits and tax brackets.
Financial foundation
Couples that forgo or postpone marriage say they are giving priority to a financial foundation over a legal one. The median homeowner had nearly $400,000 in wealth in 2022, compared with roughly $10,000 for renters, according to the Federal Reserve’s Survey of Consumer Finances.
Even couples that get married first are often focused on the house. Many engaged couples ask for down-payment help in lieu of traditional wedding gifts.
“A mortgage feels like a more concrete step toward their future together than a wedding,” said Emily Luk, co-founder of Plenty, a financial website for couples.
Elise Dixon and Nick Blue, both 29, watched last year as the Fed lifted rates, ostensibly pushing up the monthly costs on a mortgage. The couple, together for four years, decided to use $80,000 of their combined savings, including an unexpected inheritance she received from her grandfather, to buy a split-level condo in Washington, D.C.
“Buying a house is actually a bigger commitment than an engagement,” Dixon said.
They did that, too, getting engaged eight months after their April 2023 closing date. They are planning a small ceremony on the Maryland waterfront next year with around 75 guests, which they expect to cost less than they spent on the home’s down payment and closing costs.
The ages at which people buy homes and enter marriages have both been trending upward. The median age of first marriage for men is 30.2, and for women, 28.6, according to the Census Bureau. That is up from 29.3 and 27.0 a decade earlier. The National Association of Realtors reported this year that the median age of first-time buyers was 38, up from 31 in 2014.
Legal protections
Family lawyers—and parents—sometimes suggest protections in case the unmarried couple breaks up. A prenup-like cohabitation agreement spells out who keeps the house, and how to divide the financial obligations. Without the divorce process, a split can be even messier, legal advisers say.
Family law attorneys say more unmarried people are calling for legal advice, but often balk at planning for a potential split, along with the cost of drawing up such agreements, which can range from $1,000 to $3,000, according to attorney-matching service Legal Match.
Dixon, the Washington condo buyer, said she brushed off her mother’s suggestion that she draft an agreement with Blue detailing how much she invested, figuring that their mutual trust and equal contributions made it unnecessary. (They are planning to get a prenup when they wed, she said.)
There are a lot of questions couples don’t often think about, such as whether one owner has the option to buy the other out, and how quickly they need to identify a real-estate agent if they decide to sell, said Ryan Malet, a real-estate lawyer in the D.C. region.
The legal risks often don’t deter young home buyers.
Peyton Kolb, 26, and her fiancé figured that a 150-person wedding would cost $200,000 or more. Instead, they bought a three-bedroom near Tampa with a down payment of less than $50,000.
“We could spend it all on one day, or we could invest in something that would build equity and give us space to grow,” said Kolb, who works in new-home sales.
Owning a place where guests could sleep in an extra bedroom, instead of on the couch in their old rental, “really solidified us starting our lives together,” Kolb said. Their wedding is set for next May.
Homes and weddings have both gotten more expensive, but there are signs that home prices are rising faster. From 2019 to 2023, the median sales price for existing single-family homes rose by 44%, according to the National Association of Realtors. The average cost of a wedding increased 25% over that time, according to annual survey data from The Knot.
Rent versus buy
Roughly three quarters of couples move in together before marriage, and may already be considering the trade-offs between buying and renting. The cost of both has risen sharply over the past few years, but rent rises regularly while buying with a fixed-rate mortgage caps at least some of the costs.
An $800 rent hike prompted Sonali Prabhu and Ryan Willis, both 27, to look at buying. They were already paying $3,200 in monthly rent on their two-bedroom Austin, Texas, apartment, and felt they had outgrown it while working from home.
In October, they closed on a $425,000 three-bed, three-bath house. Their mortgage payment is $200 more than their rent would have been, but they have more space. They split the down payment and she paid about $50,000 for some renovations.
Her dad’s one request was that the house face east for good fortune, she said. Both parents are eagerly awaiting an engagement.
“We’re very solid right now,” said Prabhu, who plans to get married in 2026. “The marriage will come when it comes.”
