Catalyst Advisers

Sydney is a global gateway city because it is Australia's primary point of contact for international business and tourism. This also makes it a critical hub in the global talent network. Sydney is planning significant commercial and infrastructure developments to maintain its status as a gateway city and meet the rising talent migration to our shores. Net migration to Australia averaged 487,000 in 2022 and 2023, which was well above the 10 years before the pandemic, when it averaged 218,000, according to a report by CBRE. The Greater Sydney Commission envisions a ‘Metropolis of Three Cities’ – three interconnected urban hubs consisting of: * the Eastern Harbour City (Sydney CBD) * the Central River City (Parramatta) * the Western Parkland City (Aerotropolis) As the city evolves and attracts more business investment and global talent, the demand for office space, industrial facilities and residential accommodation is expected to increase. Investing in residential or commercial property in these three city hubs could potentially yield significant returns in the future.

Sydney continued to dominate the world of Australian luxury property in 2024, scooping nine of the top 10 spots for most expensive house prices and all 10 places for highest-priced units. According to CoreLogic Australia's analysis, the Eastern Suburbs was the standout performer while North Sydney and Hornsby also featured strongly among the highest-priced suburbs.  For houses, Bellevue Hill ended the year with the highest median value of $9.99 million, followed by Vaucluse and Rose Bay with respective medians of $8.65 million and $6.42 million. For units, Point Piper headed the rankings with a median of $3.119 million. Darling Point, with a median of $2.51 million, claimed second position while Millers Point rounded off the top three at $2.32 million. CoreLogic’s ‘Best of the Best 2024’ report also reveals that the three biggest sales of the year were for Sydney properties – all of which were located in the Eastern Suburbs. A home in Wolseley Road (pictured below), which sold for $51.5 million in March, was 2024’s most expensive sale.

Sydney’s Bondi Beach is a popular location for investors in the high-end property market. Its prestigious reputation and coveted beach lifestyle bring a high demand for rentals and strong capital appreciation. If you’re looking for a property in Bondi Beach, how big should your cheque book be? The median house price in Bondi Beach is $4.1 million – well above the Greater Sydney median of $1.7 million. A median unit costs around $1.4 million, compared to $815,000 in Sydney. Obviously, the closer you are to the beach, the higher the price tag. According to Domain, a luxurious two-bedroom penthouse on Notts Avenue, across from Icebergs, is up for auction this month with the potential to sell for $10 million.  Even a small 42-square metre, one-bedroom, one-bathroom apartment, ideal for short-term rentals, is on the market for $1.1 to $1.15 million. And the reason it can fetch over a million? It’s proximity to Bondi Beach, Icebergs and the Bondi to Bronte walk.

Catalyst is proud to announce that Stephen Michaels and Jonathan Valentino have headlined the Top 100 Mortgage Brokers in Australia 2024 Ranking by Mortgage Professional Australia. An amazing achievement and congratulations to you both! 🏆 🏆

Nine of the country’s 10 most expensive streets are located in Sydney, according to new Ray White research. Situated in Point Piper, Wolseley Road’s median property value of $45 million is the highest while Wentworth Road in Vaucluse is the second most expensive at $23.8 million . Bellevue Hill’s Ginahgulla Rd rounds off the top three, with a median value of $22.15 million. The only non-Sydney street to make the top 10 list is St Georges Road in Toorak, Melbourne. Here, the median house price is $16.93 million. Ray White senior data analyst Atom Go Tian told Domain that the most expensive streets were concentrated in exclusive pockets such as Sydney’s Eastern Suburbs and Melbourne’s Toorak. Many of Australia’s pricey locales were also close to coastlines and city centres, offering access to nature within an easy commute to work. “It’s not just water – you could have access to water in Darwin or Hobart,” he said, adding: “It’s really the balance between that access to water, nature and urban convenience.” Interestingly, Wolseley Road’s median property price is about 27 times higher than Sydney’s.

The price per square metre in Sydney has risen the most over the last five years of all the capital cities, according to PropTrack. Analysing the median house value versus typical lot size, PropTrack found that prices per square metre rose by 64% to $2,450 per sqm in Sydney. That’s $850 more than the next city, Melbourne, where prices are $1,600 per sqm. With such a gap between Sydney and the rest of the capitals, it’s not surprising that Sydney also accounts for more than 30 of the most expensive suburbs in the country by value per sqm. While suburbs like Bellevue Hill, Vaucluse and Dover Heights tend to have the highest median house values, they are not the most expensive per sqm because their lot sizes tend to be bigger. The highest price per sqm is Paddington at $28,000. “On a per sqm basis, it makes Paddington a little over twice as expensive as Bellevue Hill, reflecting the desirability of living close to the city and the value placed on houses in these amenity-rich, lifestyle-centric locations,” said PropTrack. 

Thirty-two capital city suburbs nationwide have recorded $1 million median house prices in the September 2024 quarter, according to Domain’s latest house price report. It’s no surprise that Sydney suburbs dominate, but suburbs in Brisbane, Adelaide, Perth, and Melbourne suburbs also made the list. Sydney suburbs Newport and North Sydney saw double-digit quarter-on-quarter growth of 17.3% and 11.6%, respectively. Kensington in the eastern suburbs and Manly Vale in northern Sydney slid in at exactly $1 million. But even more remarkable is that four suburbs (three in Sydney and one in Brisbane) joined the $2 million dollar club over the quarter. Of the four suburbs, Mascot in Sydney’s Inner South clocked the highest value of $2,080,000, up from $1,980,000. 

Buyers in Sydney’s higher-end market will be pleased to hear there is more choice available, according to Domain. In October 2024, listings are up in several suburbs across the city compared to the same time last year, including the northern beaches (up 21.1%), Eastern Suburbs (up 12.1%) and Baulkham Hills and Hawkesbury (up 19.5%). In all these cases, listings were also above the five-year average. This increase in listings reflects the overall softening of the market, said CoreLogic's Head of Australian Research Eliza Owen. She added that in some cases, in the higher-end suburbs, people might be selling to downsize or to manage their mortgage serviceability costs. Additionally, some locations like the Hills district have seen more development over the last few years, which would also have contributed to rising stock levels.

Rising house prices and lifestyle preferences are driving demand for Sydney units and could transform the city’s architectural face over the next 10 to 20 years, according to Domain. Domain’s data shows that unit searches have risen 94.3% over the past five years as Sydney buyers readjust their expectations in the search for affordability. The city’s ageing population is also driving unit demand, especially downsizers seeking lock-up-and-go flexibility. Looking ahead, Domain chief of research and economics Dr Nicola Powell said there would be a greater diversity of housing in Sydney. “I think we are going to see more infill, and more of us are going to be living in units, apartments, terraces and townhomes...It’s not just going to be the capital’s ageing population; it’s also going to be young families, and I think more of us are living on our own as well.” Powell added: “Sydney is a global city and it is one of the least dense cities in the world, but I think we are going to see that morph and change over the next decade or two.”

Leading property marketplace Domain predicts that Australia’s housing market could be on the cusp of another boom in 2025. What’s behind a potential uptick in the market? The likelihood of a drop in the cash rate early next year, which will bump up the borrowing capacity for many buyers. The stable cash rate over the last 12 months has already improved consumer confidence, nudging house and unit prices in Sydney to new records in the September 2024 quarter. House prices rose 0.6%, hitting a new median record of $1.65 million, while median unit values grew 0.9% to $815,258. “The high cash rate is helping temper the pace of price growth,” said Domain’s chief economist and research head, Dr. Nicola Powell. “What’s going to happen when we see the cash rate being cut and Australians feel more confident that inflation is tamed? That will boost sentiment. When you get more positive sentiment, you get a greater rate of price growth.”