House Hunting in … Sydney
Sydney – This two-story Victorian house was built in 1880 in Woollahra, a neighborhood of nearly 8,000 in Sydney’s verdant eastern suburbs, about three miles from the central business district. It is one of eight similar homes on an “elegant, tree-lined street,” said William Manning, a sales agent with McGrath Estate Agents, which has the listing.
“The eastern suburbs are the most expensive in all of Sydney,” Mr. Manning said. In close-by Double Bay, Darling Point and Point Piper, a few properties sold recently “in excess of 60 million” Australian dollars (or about $46 million).
The house is 2,658 square feet, with four bedrooms, two and a half bathrooms, high ceilings, elaborate woodwork and other period features. The kitchen and rear portion of the home, which includes an atrium, are more recent additions.
From the sidewalk, a gate opens to a stepped path of black-and-white tiles, leading through an arched portico to the front door and foyer. The formal dining and living rooms have hardwood floors and marble fireplaces. French doors in the living room open to a hedge-lined terrace. A wide doorway separates the living and dining rooms, both of which have ornate ceiling medallions and chandeliers.
A side hall and a door from the dining room lead to the family room and a casual dining area that is open to a raised kitchen with a Bosch dishwasher, a gas stove, marble counters, a glass backsplash and a center island. A glass bifold door opens to a covered barbecue area and an enclosed courtyard with a topiary and an urn water feature, Mr. Manning said.
All four bedrooms are on the second floor, along with two full baths (the half bath is on the first floor). The master opens to the front balcony and views of the Sydney skyline; it has a walk-in closet and an en-suite bath with a double vanity, a tub and separate shower. The other three bedrooms have built-in cupboards and share a bathroom.
The house is on 0.06 acre, and it is a short walk to restaurants, cafes, antiques shops, galleries and boutiques on Queen Street, a village hub. Parks, playgrounds, gardens and schools are also close by. Buses and trains are a five-minute walk. The 5.6-mile drive to Sydney Kingsford Smith International Airport takes about 25 minutes.
The Sydney market rose “between 50 percent and 75 percent over the last four years,” said John McGrath, founder and executive director of McGrath Estate Agents, “with each year delivering between 12 and 15 percent growth.” With nearly five million residents, he added, “Sydney remains Australia’s strongest and most enduring property market.” It is also the priciest.
In the central business district, for example, $2.5 million buys a two-bedroom apartment in “a nice, modern development,” said Michael Lowdon, director of Ray White Residential Sydney CBD. Three-bedroom apartments range from 3 million to 8 million Australian dollars. Subpenthouses run from 5 million to 10 million Australian dollars, and penthouses from 10 million to 30 million.
Inventory is down 38 percent since 2014, said Michael Pallier, managing director of Sydney Sotheby’s International Realty. And the low stock of houses and apartments combined with high demand is causing “upward pressure on prices,” said Craig Pontey, director of Ray White Double Bay.
Fifty-six percent of homes are sold at auction, with 45 percent of sales exceeding 1 million Australian dollars.“The advantage of the auction method is that it creates urgency and brings the sale to a close on a specified date,” Mr. Pallier said. “It also presents an opportunity for two or more interested parties to compete with each other at the auction to push the price up.”
The most active part of the market is between 500,000 and 3 million Australian dollars. The luxury market starts at around $2 million and goes up to the tens of millions, agents said. That sector of the market hasn’t moved as much as others during the recent boom years, Mr. McGrath said, so “price growth is overdue.”
Homes with views of the Sydney Harbour Bridge or the downtown skyline, Mr. Pallier said, “demand a huge premium.” Over the last five years, the downtown business district has become a more popular place to live, particularly among baby boomers, with areas like Barangaroo, Walsh Bay and Millers Point commanding some of the highest prices.
For first-time buyers, current prices are “extremely prohibitive,” Mr. Pallier said. “Prices over the last 12 months have risen at a far greater rate than even gross income, let along wage rises.”
Who Buys in Sydney
Most buyers from outside of Australia “are expats returning home or immigrants coming to Australia to live,” Mr. McGrath said.
A small number of luxury buyers are British citizens looking for high-end holiday homes to escape the cold winters, Mr. Pontey said. Some also come from the Middle East, particularly Dubai.
But about a quarter of foreign buyers are from Asia, Mr. Pallier said, most from China. There is also increasing demand from buyers in India, Singapore, Malaysia, Hong Kong and Thailand, agents said.
Overseas buyers are allowed purchase new property “with little issue,” Mr. McGrath said. “However, if they want to buy established homes, they need to apply to the Foreign Investment Review Board for approval.” In most cases, approval is granted within two weeks.
In December 2015, the Australian government introduced fees for foreign real estate acquisitions, starting at 5,000 Australian dollars for purchases below 1 million dollars — which constitutes the majority of foreign transactions, Mr. McGrath said. Last June, the New South Wales government introduced a stamp duty surcharge of about 4 percent for foreign buyers. As of this year, there is also a 0.75 percent land-tax surcharge.
Official tourism site: sydney.com
Sydney government portal: cityofsydney.nsw.gov.au
Australia real estate: realestate.com.au
Languages and Currency
English; Australian dollars
Taxes and Fees
This property is exempt from the annual land tax, Mr. Manning said. But it is subject to the stamp duty surcharge, if it is sold to a foreigner. There is also a stamp duty tax calculated on a sliding scale, up to 5 percent of the purchase price, and an annual fee for services like garbage pickup and leaf removal of about 2,129 Australian dollars.
The New York Times