What does $100 million get you in the sky versus on the ground?

What was the first $100m+ sale in Australia?

Adam: We have only really been able to step on that stage and participate in a conversation like this in the last three years. The first $100m sale was a property called Fairwater in Sydney’s Eastern Suburbs near Point Piper in 2018 and it was sold to someone in the tech space.

That property had been tightly held in the same family for a long time. It sits on about a hectare – two and a half acres of prime harbourfront land with a trophy home, tennis court, swimming pool and plenty of off-street parking.

More recently in the last 12 months, we've seen a property sell in Wolseley Road, Point Piper, just around the corner from Fairwater. That traded at about $92m, so it’s still up there around that $100m mark.

There are other properties in Sydney and Australia that if they were brought to market, would certainly trade at that level or potentially above.

What would $100m get you in terms of a house in Sydney?

Adam: It'd be a large block of land, probably 3,000-4,000 sqm, and a trophy home with ultimate privacy, a high level of interior finish and all the bells and whistles that you would expect for $100m including garaging for cars, pools, tennis courts, gyms, saunas, home cinemas, dedicated cellars, butler's pantries, and even accommodation for either live-in help like an au pair or staff.

On the reverse of that, what can you expect for a $100m apartment in the sky?

Erin: In terms of off-the-plan or sales at $100m in the apartment space there hasn't been a stand-alone sale that has hit that number yet, but it's about to happen we hope.

There has been one transaction that hasn't been widely discussed that has been reported at $140. It hasn't been built yet, but that was over three floors and an amalgamation of several apartments.

If we took the opinion of everybody who has seen it, the only apartment in Australia that would warrant it is the penthouse at Crown Residences at One Barangaroo. Surprisingly in that building and apartment, you're about 270 metres up but so connected to the harbour, surrounded by water and 360-degree views. You’re sitting in and living in the views as opposed to looking down on the icons, which is what I've experienced in other high-rise buildings around the city. And the ceiling heights are incredible, 6.5 metres of façade looking out northeast and double height living areas.

You also have a kitchen and butler’s pantry which leads on to the goods lift. Living above a six-star hotel you've got access to every service and amenity of the hotel beneath. If you wanted to organise catering from Nobu, that can happen through back of house rather than coming through the front door.

In terms of size and some of the other features, the penthouse is 800 sqm internal with 50 sqm of balcony. One of those balconies has got a plunge pool on it. Because of the façades and the shape of the building, even at that height, the balconies are entirely useable. You've got a private gym, six beds all with ensuites, beautiful walk-in wardrobe, massive double steam shower, and access to the private residents’ pool downstairs and tennis court.

But the beauty of living in the penthouse at Crown as opposed to living in a property on land is that you can have a pool and tennis court, but you don't need to pay for the service or think about it. You don't need to organise the maintenance of the tennis court, get the house painted or replace the windows – none of that and but with all the benefits.

Adam: This is one of the headaches of some of our clients in larger homes on estates. The outsourcing becomes a headache because you still need to manage it, so it never really is a completely off your mind thing except when you live in an apartment where you pay a service charge.

The feedback we often get in the marketplace for people that are looking to what we call ‘rightsize’ to large lateral living with good floor space, is the strata levies. People have trouble getting their head around paying these quarterly rates, but our Rightsizing Report shows that it's cheaper as opposed to having someone in each week to look after the pool and the gardens. The report really highlighted that strata fees can be a lot more reasonable than the upkeep of a large freestanding home.

Erin: And then there are other benefits at Crown, where you’ve got the concierge services – 24 hours a day and security which is important for a lot of people. It is hands down the best building in Australia. The experience of our clients when they visit, and those that are looking to buy or have bought in there, all we hear are rave review. There’s not too many left – we’re coming to the end and it’s really exciting.

Can I have a pet if I move into an apartment?

Adam: Whilst there have recently been changes to legislation which allows for apartment owners to have dogs in the building, there are some non-pet friendly developments here in Sydney where the average days on market to sell them are longer and the discounting is greater because there are less buyers for it. They’re not going to part with the family dog. And why should they have to?

We are moving more towards that New York style of thinking and living when it comes to having pets. Soon it’s going to be the norm.

Erin: We recently concluded a transaction at One Barangaroo with pets. A lot of our purchasers have experienced living in apartments not in Australia and have loved it, and therefore want to have that same lifestyle here.

Where do we store all the things we’ve accumulated?

Adam: That comes down to the developer at the time and what we've seen at Crown is dedicated storage cages in the garage. With the day-to-day things that people might want to access such as golf clubs, the apartments themselves have ample storage. The way they have been designed is basically houses in the sky, but without the hassle.

Erin: A lot of our purchasers have multiple cars for example, and here in Sydney there are strict planning restrictions on the number of car parks that can be allocated. There is the ease of a large house with a huge garage so you can keep all your cars very close to you, but we've seen people come up with other solutions for storage.

Adam: People with large car collections have either bought off-plan and amalgamated to pick up extra car spaces or they’ve bought in older buildings that were developed at a time when you were able to have multiple car spaces. For example, The Horizon had eight car spaces – you can't do that anymore. What we find our buyers doing is buying a warehouse to store all the toys, which still makes a really good industrial investment.

How does the Sydney market compare with other global cities?

Erin: In terms of living in big apartments, New York and London have traditionally been seen as, and still are, two of the world’s biggest, most reliable and trusted markets for prime and super-prime property.

There's always been a strong and growing population of ultra-high-net-worth individuals in both those cities. According to The Wealth Report, over a third of those from Australia are based in Sydney.

We are starting to compete with those two cities in terms of desirability but there are some exceptional apartments in that have achieved well in excess of $100m and the big one at the time, which broke unbelievable records and expectations, and people were just astounded that they could achieve the pounds per square foot was One Hyde Park.

And then in New York, a couple of years ago I was lucky enough to see 111 West 57th Street, which broke some huge records and has again on some resales recently.

Adam: On the ground, my favourite that I’ve seen in a long time is up in Wainscott in the Hamptons. It’s a seven-bedroom home on 14 acres of perfectly manicured gardens and waterfront land. We’re talking a 930 sqm home. Huge!

As we talked through those big transactions elsewhere in the world and how common that is, with our ultra-high-net-worth population growing here, the demand on developers here in Sydney to create super-prime apartments is going to be greater and greater. We’ve only just woken up.

If you had an infinite amount of money, what’s your preference?

Erin: I have always lived in houses but having worked so consistently in an apartment building for the last five years and spent so much time in those apartments, I have turned the corner. It’s the practicality and ease.

I really love the horizon views and it would look for if money was no object, from way out to the Blue Mountains and the ocean on the other side. Whatever the weather, there’s always something to see at that height – from misty and moody to the blue harbour alive with activity.

So many of our purchasers at One Barangaroo have maintained the house, city apartment and now off the back of COVID-19 we’re seeing more co-primary residences.

Adam: You don't have to be in the city all the time now and split your time more equally between a house in the north or east, the Southern Highlands farm getaway or something in the Hunter Valley.

Erin: There’s been a focus on lifestyle for a long time and wellbeing has been a hot topic for the last few years. With that focus, having the pandemic, now with not being so dictated by having to be face-to-face, that has enabled people to live in a way that suits them better in terms of where they're located and use all the homes that they have more equally.

Adam: That has become a key part of any new prime or super-prime project and COVID has only pushed that further.

How does being on the waterfront impact property prices?

Erin: There’s only so much space on the harbour for houses in Sydney so the demand for developers to build on the harbourfront but upright, multi-levels rather than singular homes is only going to increase.

We recently released the Australian Waterfront Premium and the uplift for having a direct harbourfront home in Sydney is 119%, which is a reflection of how tightly held those properties are and how few come to the market.

Adam: Being on the water and having water views in Australia as a whole, in terms of the prestige buying brief, that’s the crème de la crème. On average across all Australian cities, if you're on the water, it's a 79% premium over someone who's living on the high side of the road. When these offerings like Crown come up or any other harbourfront project, they’re as rare as hen's teeth, but when they do come up they’re so well received.

Erin: While the Australian dream is still land ownership and international purchasers find it a real attraction because it’s a leasehold and even rarer than hen's teeth to buy land in their markets, the value of those free-standing homes is only going to go up on the harbour but the demand for apartment living on the harbour is going to fly.

Adam: In terms of seeing more transactions around the $100m mark here in Sydney, we’re going to see a lot more of them and certainly in the apartment space.

For more information, contact:

Erin van Tuil

Erin.vanTuil@au.knightfrank.com

+61 409 325 700

Adam Ross

Adam.Ross@au.knightfrank.com

+61 409 663 051