Continued demand for prestige properties and the return of international buyers signals another strong year for luxury apartments.

By KIRSTEN CRAZE

THE APPETITE FOR prestige apartments is growing and demand for penthouse properties is leading the way. During the first half of 2021, the sales volume of super-prime luxury apartments over $10 million was eight times higher than the decade average, according to a 2022 report by Knight Frank.

“Despite living through multiple lockdowns throughout a global pandemic, the concept of living in a luxury apartment in the sky, with house-like proportions, is still an aspiration for many across Australia,” writes the report’s author, Michelle Ciesielski, Knight Frank Australia’s head of research and consulting.

Super-prime properties are those that fall in the top 1% of the market by value, the threshold generally being over $10 million in Melbourne and Sydney, and $7 million in Brisbane, Perth and the Gold Coast. In early 2021, the top five super-prime apartment sales in Sydney averaged $39 million (four of these are in the One Barangaroo Crown Residences complex). Melbourne’s record price for an apartment was broken in 2019 when a two-storey seven-bedroom penthouse in St Kilda sold off the plan for an undisclosed figure, reportedly close to $30 million.

Ross Savas, managing director of Kay & Burton, says despite a pandemic-induced shift that saw a wave of Melburnians retreat to the regions, buyers have also been flocking to the high-end apartment scene because it fits with their new raison d’etre. “Demand for these types of apartments is high because this calibre of buyer now has multiple homes. People want the flexibility to move around, whether in the same state or across the country. They want to enjoy different settings at different times of the year,” he says.

“In winter, they might head up to Noosa, the Gold Coast or Byron Bay. Then, in summer, they might go down to their Flinders or Portsea home. The rest of the time, they’ve got their luxury Melbourne pad.”

Ross Savas,
Managing Director, Kay & Burton

In Noosa, last October, a new record was set when a rare three-level apartment just metres from the beach fetched $16.1 million at auction. Meanwhile, on the Gold Coast, the benchmark was set in May when a 1,070- square-metre four-level penthouse overlooking Surfers Paradise Beach changed hands for $15.25 million.

Modern design and cutting-edge features are at the top of buyers’ wish lists, says Savas. “This market is growing, not diminishing. And it’s growing because people want luxury. They’re demanding the finest finishes and fittings, the best appliances, the latest technology, lots of space to work from home if necessary, plenty of parking, and security.” Apartments priced at more than $10 million are highly sought after, he adds.

One of Savas’s most recent listings, a sub-penthouse at 150 Clarendon Street, East Melbourne, has ample space; in fact, with a total of 1,400 square metres, the 11th-floor apartment holds the title of largest whole­ floor apartment in the Southern Hemisphere. With interiors by the late Stuart Rattle, it offers 24-carat-gold Louis XVI-style appliques, imported Lalique Masque de Femme crystal decorative panels, a private Zen Garden with meditation room, five fireplaces and a six-seat cinema. The price guide is $30 million.

“It’s a house-sized apartment with views that make you feel like you can reach out and touch the city; they’re just phenomenal,” says Savas. “It’s in one of Melbourne’s finest buildings and in terms of luxury, you’re not going to get anything better.”

Ross Savas,
Managing Director, Kay & Burton

The big draw for buyers of these apartments, is convenience; for many, this trumps the trappings of a large, stately home. “It’s all about being able to lock up and leave, and have a maintenance-free life,” says Savas. “You can’t shut up those big houses for six months and not attend to them. But with these apartments, you’ve got concierges and caretakers within the building who look after everything, whether you’re there or not. So it’s a very different lifestyle.”

Damon Krongold, the director of special projects at Kay & Burton, agrees that the low -or no- maintenance lifestyle these apartments offer is fuelling demand. “Buyers are coming out of large, valuable homes, some with sprawling gardens, and they’re at a stage of life where they want to literally lock up and leave. They might have a beach house somewhere, or may want to make a sea change, or maybe they’re looking forward to doing more travelling,” he says.

“There’s a lot of locked up value in those houses -anywhere between $6 million to $10 million, or more – and people want to realise that value now there’s strength in the market.”

Damon Krongold
Director of special projects, Kay & Burton

Krongold says many homeowners in this segment are not downsizing but “rightsizing”. “When it comes to the buyer of a penthouse or luxury apartment, it’s not necessarily about moving to a smaller floor plate or a smaller home, it’s about having a smaller property to manage,” he says.

Lifestyle comes before all else, he adds. “As long as they can find what they want, the money is almost secondary. It’s quite a discerning and generally well-informed buyer who knows what they want. And that’s at least three large bedrooms, ensuites, a study and big open-plan living areas with breakout spaces so people can hide from noise. What they don’t want is to move into a shoebox.”

Shortly after Melbourne’s last lockdown, Krongold made a significant penthouse sale that he believes signals a shift in buyer sentiment. One of three apartments in The Botanic Collection by the Sadikay Group, designed by the architect Rob Mills and the landscape architect Jack Merlo, the house-sized three bedroom penthouse features some 700 square metres of living space split over two levels and offers sweeping views of the Royal Botanic Gardens Victoria.

“Although the market was impacted dramatically by Covid-19, the dust has started to settle. There’s been a strong resurgence of interest again, beginning around last October or November,” says Krongold. “The ultimate testimony is the sale of the penthouse at 30 Anderson Street, South Yarra. The price guide was $16.5 million to $17.5 million and while I can’t disclose the sale price, it exchanged in the mid to upper level of that range.”

But while penthouse buyers are out in force, stock levels remain low. As a result, says Grant Samuel, of Kay & Burton South Yarra, budgets are rising. “Supply has been low and at the end of the day, that’s what drives this market: supply and demand. The sweet spot is probably around $4 million to $6 million. This is for buyers who might be selling a $10 million home and want to have enough money leftover for their later years, or to help out their children.

“As house prices have continued to rise, people have been able to push a bit higher with their next purchase. But having said that, in the current market, if you want an absolute premium penthouse in Melbourne, you’ll be looking in the $10 million to $15 million range.

There are, of course, some on the market for more than that, but that’s the range pent­ house buyers are typically chasing.”

Grant Samuel
Partner, Kay & Burton

Samuel is currently marketing a penthouse at 2a Hopetoun Road, Toorak, with a price guide between $10.75 million and $11.825 million. The new four-bedroom home, developed by Eden Residences and designed by BG Architecture and Kestie Lane Studio, boasts a total of 480 square metres of living space, with 120 square metres of private gardens and a courtyard. Additional features include two full kitchens, a wine cellar with space for 400-plus bottles, a wellness room, a statement spiral staircase and an 85-square­ metre bedroom suite, complete with a library and private terrace.

In Brighton, Kay & Burton partner Darren Lewenberg has listed the beachfront penthouse at 27a St Ninians Road with a price guide of $15.5 to $16.5 million. Located at the heart of the Golden Mile, with uninterrupted views of the city skyline and Port Phillip Bay, the impeccable 400-square-metre home includes a private rooftop swimming pool, three bedrooms and a five-car garage.

“Given that this breathtaking home is one of only a handful of residential Bayside properties with direct beach access, it’s an incredibly rare opportunity, likely to attract both local and international interest,” he says.

We’ve already seen a number of key apartment sales this year, and now that international borders have reopened after a two-year hiatus, Savas concludes that the only way is up for the local penthouse market. “We’ve got expats and international buyers coming from Hong Kong, Singapore, and throughout Asia, New York and London,” he says. “It’s shaping up to be an incredibly strong market and will continue to be that way for many years to come.”