Empty nesters drop in on luxury apartments
Ray White Double Bay director Michael Finger said this trend appears to have been exacerbated by the increase in the number of sales of family homes particularly in the Eastern Suburbs.
“Larger homes in Bellevue Hill, Vaucluse, Rose Bay and Dover Heights are slowly being vacated by families that have lived in the same home for up to 40 and in some cases 50 years,” said Mr Finger, a veteran of over 45 years in real estate.
“Their children have grown up and are now married with their own children. They find themselves rambling around in a home that in many cases is slowly deteriorating.
“What we have found historically is most people let their homes run down when they get to certain age, firstly because they run out of cash and are really only asset rich. They all say they will repair or renovate just before they sell. Naturally that never happens.”
Mr Finger said homes are selling much more readily now for premium prices.
“It’s in complete contrast to the post-GFC time, where the larger homes were slower to sell so older families found it challenging to move and buy into an apartment for their twilight years. Now with the current market so active and higher prices being achieved for their big homes we are finding more and more elderly couples looking to move and wanting to secure their luxury apartment.”
As a result the price per sqm in the last 12 months to two years has increased by 30 per cent and now in parts of Sydney, like Double Bay, agents are seeing $35,000p/ sqm being secured by vendors.
“This is a huge jump from $20,000-25,000 p/sqm in less than 2 – 3 years. The ability to replace the stock has slowed down as well, which again puts pressure on this now very strong market place for spacious luxury apartments,” Mr Finger said.
“Those looking for luxury apartments are very selective about what they purchase – all want to be close to amenities, infrastructure, wanting level access, easy parking as well as being able to accommodate visitors coming to their home.”
There have been some recent apartment developments along the Harbour foreshore that have been sold within days straight off the plan.
“It seems this part of the market will continue to rise rapidly with baby boomers now starting to look for their apartment to move to well before time,” he said.
“We have experienced several families out buying an apartment well in advance of their need for it, with the view to renting it until such time as they need to physically make the move.”
Last week Ray White Double Bay saw the perfect example of this situation where more than 65 parties inspected Penthouse 2 at 515 New South Head Road, Double Bay.
The property sold under the hammer at 17 per cent above expectations exceeding the $6M barrier and setting a new record for the immediate area.
Mr Finger predicts this trend is likely to continue, with prices rising not only because of the demand but the rise in the cost of building.