Australia: Wealthy Buyers and Barangaroo
High net-worth individuals, having USD $1 million +, are increasingly moving and buying residential property in Australia, mainly Sydney. The number of wealthy people taking up residence in Sydney is expected to increase by 70% by 2026. The ultra-wealthy, those having USD $50 million +, is expecting a 37% increase within the next five years to be living in Sydney according to a new survey in The Business Times.
The appeal for living in Sydney is understandable with its famous harbour, beaches and a good economy. Sydney is now ranked 11th best city in the world to live in based on wealth, investment and lifestyle by the Knight Frank City Wealth Index for 2018. It was also ranked at the 7th best in the world for investing.
In comparison with other regional locations USD $1 million can buy a 49 sqm of prime property in Sydney whereas in Singapore USD $1 million would buy 37 sqm, London 27 sqm and New York 25 sqm. As a result the property market growth continues to be robust even if the available stock in luxury residences has been low with the prime luxury residential sales being mostly in penthouses.
One of the hurdles for foreign home buyers interested in Australia are only able to buy new properties rather than existing ones as that is only available to Australian perman
ent residents and New Zealand citizens. Additional stamp duty taxes on foreign buyers made available residences more expensive thus lowering foreign demand.
The Barangaroo Developments
One precinct of Sydney that is now to undergoing a large renewal is the 22-hectare waterfront property One Barangaroo. It is expected that once completed this urban renewal project will feature just as prominently as the Sydney Harbour and the Opera House.
Barangaroo has now become a millionaires paradise with renters needing close to $250,000 per year in income to live there. Median rental prices are currently at $1400 per week.
The development of One Barangaroo, Crown Residences will feature a collection of 82 residences with floor plans of 2, 3, 4 and 6 bedroom residences and a limited number of duplex apartments. Along with views the residences will enjoy:
“...London architecture. Manhattan interiors. Tropical landscaping. Global dining and impeccable 6-star Crown Resort service. Introducing the Crown Residences of One Barangaroo.”
Prices start at $9.5 million with an expected completion of the development by 2021.
The Barangaroo Delivery Authority established in 2009 by the government of New South Wales says of the plans:
“The creation of Barangaroo is long term. When complete in 2024, Barangaroo will accommodate more than 23,000 workers and residents, and host thousands of visitors each day.”
The Sunday Telegraph reports that even as the trend of declining prices around Sydney is at 0.3% apartment prices have risen 7.4%.
CoreLogic analyst Cameron Kusher:
“And there’s been about 5 per cent growth in rents over the 12 months, so that’s pretty reasonable.”
The report featured agent Noemi Guttmann of The Agency, who is now offering her local one-bedroom apartment asking $1.475 million to $1.55 million.
Ms. Guttman says:
“It would rent out for between $900 and $1000 a week, so I’m getting interest from
both investors and owner occupiers.”
Mango Real estate agent Jane Zhao, who quickly sold a two-bedroom apartment for
$3.5 million said:
“Barangaroo is very popular with Chinese buyers because they want a water view and it’s not too high up.”
Describing life in Barangaroo Ms. Guttman says:
“Barangaroo offers a lifestyle like no other in Sydney. The energy is buzzing, with the hottest bars and restaurants, cafes, elegant shops, even David Jones at your doorstep.”
CBRE Residential chairman Justin Brown:
“Barangaroo is a perfect example of a successful urban renewal, it provides a
fantastic ground plan of social amenity with the vibrancy of a commercial precinct
next to the CBD on the water. It offers all the attributes city dwellers would seek.”
Ben Stewart, director of CBRE tells Domain:
“There is such huge demand for luxury city living and, along with the current upgrade to Circular Quay, that is playing out at a time when there’s a huge shortage of supply that’s driving up Sydney’s per-square-metre rate in these apartments.”
New luxury residences for high-net worth buyers and investors are in the pipeline for Sydney with Landlease planning three high-rise for the One Sydney Harbour Precinct. Two towers, 60 and 71 storeys will have 624 units developed by architect Renzo Piano and designer Pritzker. A third tower will feature 151 units in 29 storeys.The Australian reports: “Chinese-backed developer Aqualand is also has luxury apartments planned for its towers in Barangaroo Central but these plans have been kept tightly under wraps.”