Charter Keck Cramer and Precisely Property Podcast respectfully acknowledge the traditional custodians of country throughout Australia. We pay our respects to their elders past, present and emerging.
Richard: Hello, and welcome to another episode of Precisely Property. I’m your host, Richard Temlett. I’m excited to have you with us today. So, sit back, relax, and let’s get started.
If you’re here for the first time, thank you for joining us. I encourage you to listen to our previous episodes where we discuss all things property, with a focus on dynamic discussions with industry leaders. In this episode, I’ll be speaking with Nerida Conisbee of Ray White. Nerida is Ray White’s Chief Economist and one of Australia’s leading property experts.
She provides market commentary to a wide range of Australian media outlets and contributes to Ray White’s publications. Nerida is the Chair of the Construction Forecasting Council and is a member of the Australian Taxation Office’s Foreign Investment Stakeholder Group. She also provides updates on property market conditions to major government bodies. With more than 20 years of property research experience throughout Asia Pacific, Nerida has held senior positions within commercial agencies and major consulting firms during this time. Welcome, Nerida.
Nerida: Hi. Thanks for having me.
Richard: Nerida, thank you so much for coming along, and on the show. I can’t wait to get into the content. But as I typically do, just giving a bit of a background as to how you and I know one another and then setting a bit of the scene, just for the listeners.
I don’t know if many listeners know that you actually, once upon a time, used to work at Charter Keck Cramer. And it’s fantastic, and I’m very grateful that you are still certainly connected to Charter, and you’ve been very kind in terms of helping myself out and sharing information and data. And I certainly love catching up with yourself even though you’re based in Sydney now and just sharing your views of the market. And today, we’re going to be talking about the Sydney housing market and I can’t wait to get your views. When I was on the train this morning, what I thought we’d do, because I certainly know the people in my office and I’m one of them, you are one of my role models and a bunch of my colleagues’ role models.
So I’m keen to learn a little bit more about your background, what your qualifications are, where you’ve worked, where you’ve got to now, if you’ve got any tips for people looking to get into a similar role of yours because you are certainly one of the best known personalities and highly educated people that I know in this space. And I love talking and working with you, and it’d be good to just get some of your background. And then today, what we decided to do is talk about the Sydney housing markets. We’re going to break the session up into the prestige housing market, which just seems to be on another planet compared to the rest of Australia. And then I’m also very interested to talk more broadly about the mainstream housing market, and no doubt within that we’ll also talk about the apartment markets because there’s a lot happening there which is quite different to the rest of the country.
So, in terms of the scene setting for the listeners, as I said to you before, Sydney seems to be in a housing market of its own. I am astounded when I see some of the prices of some of the dwellings in some of those southeastern suburbs. I’ve actually walked around some of them. It’s just one of my hobbies and seeing the beautiful views, the Harbour Bridge, it’s incredible. And I’m keen to talk to you more about what’s happening on the ground there, who the buyers and sellers are, and some of those price points.
Sydney is also the most mature apartment market across Australia. I’d love to get your views on what you’re seeing both in the higher end and then the more mainstream end of the apartment market. It’s at a very different point in the cycle compared to a lot of the other Australian cities and it’d be fantastic to hear what you’re seeing on the ground.
And then the final thing I’d love to talk to you more about, and certainly it’s a question that we’ve had from a few of our listeners, is the people living in Sydney. How are they affording to live and rent in Sydney? And I can’t think of anyone better placed, having lived in Melbourne and now you’re living in Sydney to talk to that. So, let’s get into the show. The first discussion point is your background and experience in the industry. So, may you please give us a little bit of that background?
Nerida: Yeah. Sure. I studied economics at Melbourne Uni, went on to do a master’s in econometrics. I graduated early 90s, so, I think anyone who was around then, it was very, very rough in Melbourne to get a job. I think youth unemployment was sort of 25-30%. So, I came out of Uni, worked for Ian Harper for a little while at Melbourne Business School as a research assistant. Was pretty happy there, but he was sort of like, “no, this is a one year job. You need to find something else beyond this” and ended up getting a job at a company called Jebb Holland Dimasi, and they ended up becoming part of Urbis, still an economic advisory group. And it really was my first introduction to property. I didn’t really know much about property. I was good with numbers. I was good with modelling, forecasting, but not specifically for property. And that really just gave me a taste for the industry and got to meet lots of people. During that time for sort of my first 10 years of my career, I spent a great year at Charter Keck Cramer, had a really good time. You guys were in Richmond at the time. There was a woman there called Susie Wardrop, and she was this really amazing marketing person.
And she got me a few radio interviews, and I loved it. I thought it was so much fun, and she was fun, and the industry was fun. There was lots of really interesting insights. So that gave me a taste for media. And then from there, I’d had various roles. I was at JLL for a little while, became the head of research at Colliers, and then had a role, a stint, at REA Group as their Chief Economist. So, now I’m at Ray White and have been there for three and a half years.
Richard: Amazing. In terms of moving from Melbourne to Sydney, when did you do that? What brought that on?
Nerida: It was a big move. I was at Colliers, and it was during the time I got promoted. I was promoted from a Victorian head of research role to a national head. And I was asked to move, and I was pretty open to it. You know, I mean, Sydney is a great city. Lots of opportunity. My kids were at a good age to move at that time, they were still in primary school. So, we packed up. We had a house in in Heidelberg. We sold the house, and we moved to Freshwater. And talking about the shock in terms of pricing, we really saw it then that Freshwater is a very nice suburb, but what we were able to buy was very poor quality. We had to live there for quite a long time before we could afford to knock it down and rebuild.
So that was probably about 10 years ago that we made the move to Sydney. So, yeah, originally spent most of my life in Melbourne, but now based in Sydney.
Richard: Well, you certainly experienced Melbourne and a decade in Sydney. You’re ideally placed to talk about the Sydney housing market. So, thank you for that background. Let’s get into the first part of the session, which is the prestige housing market. And as I said, part of what I do, it’s a hobby, but also a lot of my work, I walk around the different areas. One of my earliest mentors actually suggested as part of my research that I should do that. I walk around different land estates or apartment projects, which is different suburbs to see who the people are, what the cars and the streets are, the housing, the walls, the roofs, the architecture. And I must admit, parts of Sydney are some of the most beautiful that I’ve seen in the world.
When you’ve got those views of the Harbour Bridge and either the Harbour or the ocean, the size of the land and the size of the houses are absolutely indescribable. And I was recently in South Africa and I was interested at the same sort of exercise in Cape Town, which is probably the comparable housing market to Sydney. What was amazing is there’s beautiful views of the Harbour and Table Mountain, but, I thought you’d be interested and the listeners would be interested to know the most expensive housing in South Africa is around about $30 million Rand. If you divide that by 10, it’s $3 million for, basically, comparable dwellings that you’d get in Sydney for $80 million. And so, there’s something in there.
I’m considering doing a research piece to go. Luxury cars seem to be very similar priced in South Africa versus Australia, but housing here seems to be 10 times the amount. And when I told some of my friends even that the dwelling that I’ve bought versus when I spoke with them and the most expensive ones they bought were the equivalent of $150,000. So it’s just incredible, but I suppose that’s just a bit of a background in terms of even though South Africa has some beautiful views, especially in Cape Town, I still think of all the markets that I’ve seen in the world, and I’ve walked around a number of them, I’m very lucky whether it’s in London or Paris, I still think Sydney and that that part of Sydney with some of those schools at the bay, it’s absolutely gorgeous. I’m keen to understand what you’re seeing in that segment of the market, who the buyers are, how on earth is it still just increasing in value so much, kind of in your hands on this?
Nerida: Yeah. I mean, it’s a big topic. Sydney is one of the least affordable cities in the world. It’s been documented by demographia of consultancy with which tracks the data. The median is sitting at about $1.6 million, so it’s, you know, it’s obviously extremely high, much higher than anywhere else.
In terms of affordability, it’s a hard one, there is that absolute mind-boggling expensive property. I mean, you go somewhere like Point Piper, and you get 50-60 plus million-dollar homes, which have incredible views and beautiful homes in their own right. And then you move out west and you start to get far more greater levels of affordability. And I guess that’s the thing too. There is affordable property in Sydney, but what you can buy for your money is quite different than what you can buy in other cities.
I think one of the things that’s happened is that for a long time now, first time buyers don’t necessarily think to buy a house. They would definitely look an apartment. And there are apartments that are in the budgets of first home buyers. We sort of look at it around that $750,000 price point, but you’re not getting a house, and you’re not getting three bedrooms. You’re probably getting two bedrooms. It might be quite an old apartment. And so, I think that’s the way younger people seem to be getting in is that they’re buying something that’s just very, very different compared to what they would be buying if they lived in Brisbane or Adelaide or even Melbourne.
Richard: That’s really interesting to hear. So, basically, what you’re saying is in Sydney, because of the price points, first home buyers are really just looking straight at apartments for the majority of people because that’s obviously quite different to Melbourne where a lot of them are actually looking at house and land or townhouses.
Nerida: Yeah. I mean, house and land is popular in Sydney, but you are looking again at quite a different price point. A lot of those house and land areas, the medians would sort of be up there in around $1 million, and then they’re quite far from the city. I think it’s that choice of, do you buy house and land or do you buy inner, but definitely that house and land I mean, you study it in a lot of data, but that house and land price differential from Melbourne to Sydney is quite incredible.
Richard: It’s astronomical. Yes.
Nerida: Yeah. So, what I mean, that’s a big driver. Then you look at the luxury market. And I think this is quite fascinating because when we look at the luxury market, we’ve definitely seen it outperform the median. And we’ve seen it outperform the median not just for houses, but also for apartments. And we won’t talk about apartments right now, but apartments is quite interesting because the median apartment price in Sydney over the last 10 years has increased by 25%. Luxury’s increased by about 75%. So, when we talk luxury, we talk the top 5th percentile of all properties.
When we look at houses, it’s a little bit, when you look at percentage terms, the match is a little bit more even. But then when we look at the top 5%, there are some homes that are clear outliers that wouldn’t be in that same category. So, luxury houses, there are a lot of people with a lot of money in Australia. To look at things like median wage is pretty meaningless once you start to get to luxury because these people are not in those figures. They’re business owners, and they are earning very, very high incomes.
There’s even a lot of wealthy people in Australia who would also have Sydney property. So even if they’re based in WA, they’re based in Perth, they would still have a Sydney property. If you’re just based wealthy in Melbourne, you’d probably still have a Sydney property. And I think part of it is because owning the home you occupy is a tax-free asset. So, there’s quite a lot of good reasons to park your wealth in the home that you occupy. And as a result, there’s quite a lot of very, very wealthy people battling it out for not many properties that are located in Point Piper, for example. So, that that does definitely keep it elevated. But the other thing that we have seen is that luxury is getting more luxurious. And we used to always talk about, “oh, you know, be careful. Don’t overcapitalise on your home.” And, obviously, that’s still the case. You shouldn’t build a huge mansion in a suburb that’s super cheap. But when you look at these luxurious suburbs and you’ve got a block of land with a harbour view it’s really sky’s the limit in terms of how much you can invest. So we have seen a lift in terms of the value of these homes, not just because they’re in locations that are very limited in terms of where you can build and very well located, but also just the homes themselves have become far more luxurious and more beautiful and I mean, beautiful is depending on your view and how that how you see it. But, certainly more luxurious in terms of the amount of money that people have invested in them.
Richard: I thought you’d be interested to know, some of my colleagues do some of that prestige valuation in the Sydney office, and shout out to them. If you’re looking for Valuations to be done in that space, please reach out to them or I can put them in contact with you. When I read some of those valuations for, an $80 million property, what I was astounded to see is the house, the dwelling was only worth maybe $5 million. And I say $5 million because the land was worth $75 million. And it was absolutely incredible where, basically, it’s the value of the land. It must be that scarcity factor and especially the premium that you get for views and the premium that you get of that Sydney Harbour Bridge, I find it just mind blowing. And when you looked at the one valuation that I looked at and it had been sold and they are very tightly held. They seem to almost be held in generational wealth and every now and then when it did get value or when it did transact, you could just see the noticeable jump, but it was really the land value that was absolutely incredible.
As I was talking to you, I’ve actually had a story to tell you and the listeners do a lot of work, and some of the CEOs do you’re right, they do live in Sydney and they are CEOs of these very wealthy property development companies. The one CEO made a joke to me and he basically said “Richard, my house in Point Piper, the time that I’ve been a CEO, my house has made more money for me than I’ve made in my earnings.” And I went – can you just explain that a little bit more? He basically said, to your point, it’s about 75% increase. He literally went, I cannot believe there’s such a shortage of these good quality stock that supply scarcity, the value in the land, that it had actually made more money than he had over the last, I think it was five or seven years, which is just incredible. So it does seem to be much more a store of wealth and its limited supply, I’m assuming, is are they cash buyers? I assume a lot of them don’t have mortgages. It’s a world I’m not really that familiar with because I just, you see the headlines, but is that what you’re seeing? Do they buy in cash or?
Nerida: Yeah. I mean, it depends on how they structure things, obviously. But, if you have a look at some of the big purchases, the Atlassian guys buying property in Sydney. I mean, that they’ve done incredibly well in terms of their company and buying the statement home or the trophy home is kind of that next step of having made it because, you can now afford it. You’re not taking a $70 million mortgage out. And, they may have been using some debt products to do it, but they’d be doing it for tax reasons. So, there’s definitely the money out there.
And I think for the average person when you think, well, how would you ever afford an $80 million home? Well, that’s how you do it. You build up a company, and it’s been interesting how money is made. I mean, we see the obvious ones, like tech has been such an obvious one. But, there’s a lot of money being made in agriculture in Australia. The beef industry, in particular, has had some amazing time period. We have, as you said, a lot of people have done really well our of property, and as a result, have purchased homes there. So, there’s definitely a lot of wealth being created, but, a lot of these people aren’t people working for a wage. They are people that are building wealth in other ways.
Richard: Before we jump into the higher end departments, I’m just interested, I think when I was looking at the stats, it’s John Simons’ house. Is that going to go, do you think, for over $200 million? I sometimes get so confused with the actual figures. It seems to be too many zeros for my brain to actually comprehend. Do you think it will be the first one to actually hit $200 million?
Nerida: Yeah. I think everyone’s watching it pretty closely because it’s an amazing location there on the harbour. It’s right on the water, and he’s definitely asking for a very high figure. So, on one hand, is it worth that much? Who knows? I mean, your Valuers maybe they would know. But I think the challenge is that there’s a very small pool of buyers. So even if there are one or two parties, you know, still quite a long transaction to take place. But, yeah, it will be an interesting one if you can hit that $200 million. I mean, he’s probably not desperate for the money, so I guess he’s quite prepared to hold out until he gets what he wants.
Richard: It’s just incredible. I jumped on the internet and was just looking at some of the photos of the floor plans. Remarkable.
I saw a while ago now that the record for the apartment price in Sydney was $140 million and that was in one of Lendlease’s projects. And also, there’s a discussion going on and I am close to them and I have the privilege to act for them and then do a lot of work with them. And some of the questions being thrown around are where are those buyers coming from? Are they downsizing from a $150 million house in the southeastern suburbs into an apartment and what’s the depth of that market? Because it’s just, you look at value rates in Melbourne, they might be getting up to $35-40,000 a square meter, but in Sydney, it’s often well over $100,000. And when you look at some of those apartments, the $140 million is one, but there’s a number of them that are not that far away. And you think, you know, $80 or $90 million for an apartment, that’s astronomical. And where are these buyers coming from? Are they expats? Are they people from Asia? What are you seeing there?
Nerida: Yeah. Look, definitely offshore. I mean, as soon as it’s off the plan, that’s as a foreign buyer, you can buy it. So, we know that there are projects that are specifically targeting Asian buyers and that Lendlease project. I’m not exactly sure who bought it, but, my understanding, it was someone from overseas that did purchase it, and that was definitely aimed at an offshore buy. It was the project that is attached to Crown. It’s got the amenities that are provided at Crown are provided at the apartment. So, there was a lot around that project. There was not just the property and the 360 views it created, but also the fact that it did have a high level of an amenity.
In terms of who’s buying, I mean, so definitely offshore that’s a clear one. We are seeing a lot of downsizes. Our special projects area does quite a lot of work in places like Double Bay, and there are a lot of people that are older. They’re downsizing. A lot of them have a home in regional New South Wales, Barrell, for example. They may have something really nice on the Gold Coast, and they want to downsize, but they still want the luxury that their house had. But they want to be able to lock it up and leave it and spend time travelling or spend time at their other properties. And so that’s definitely a big driver of home sales in those areas that people have built up huge amounts of wealth in buying very well-located homes over the years and are now getting to a time period when they don’t need such a massive home. But they still would really like a lovely home and these apartments to fit that mould.
Richard: It occurs to me just as you’re speaking, but also some of the research that I’ve done, a number of those houses in areas like Bellevue Hill or Rose Bay seem to have been purchased in, the 1970s or 1980s. And I just wonder if it’s the families now that baby boomer point in their lives looking to downsize, age, and place. And I wonder if there’s going to be a greater level of them coming to market or, again, we seem to live in a different universe in that space. Maybe they’re just going to hand it over and transfer the wealth to their families. I wonder how, it’s more just a pondering, I don’t know if you’ve got any views on that, but it occurs to me that you’d want to be keeping that asset in your family. That being said, maybe there are ones that don’t have the family or want to avoid, I don’t know, inheritance disputes and stuff like that. Maybe they sell it and crystallize some of that equity. It’s fascinating to me because I do wonder when that $200 million mark is going to get breached and then also what will happen to some of that dwelling stock. I suppose we’ll just have to wait and see as it plays out.
Nerida: Oh, I agree. It is quite fascinating. I mean, we do have a shortage of family homes in Australia. I think anyone with a young family trying to buy in, not necessarily Bellevue Hill because that’s super expensive. But, you know, sort of relatively inner suburban area of Australia, I think a lot of people do find it hard to find family homes. I think it’s going to be, obviously, it would depend on the family and what they do with those homes. I think one of the problems though is, if you’ve got multiple kids, who do you leave it to? How do you split an asset like a house? Is it better to sell and split the money between the kids? Or is buying the Double Bay apartment so expensive that, you maybe don’t have a lot of cash to spare, or you want to use it for travelling, or, you know, people buy yachts.
Richard: That’s right.
Nerida: You know, there’s a lot to do with a lot of money. So, it will be an interesting time. And we’re definitely seeing it in terms of demand for luxury apartments. There’s definitely a lot of downsizes and very wealthy downsizes. But what they’re doing, with the family home, I’m not so sure.
Richard: Okay. Before we jump into the wider Sydney housing market, as it applies to luxury apartments, is there a preference for a certain number of bedrooms, or what are some of the amenities that you’d be recommending or that you’ve seen that should be provided to this extremely wealthy buyer target market that can afford, obviously, that particular product? What are some of their prerequisites?
Nerida: I think it depends where you are. If you have a look at Gold Coast it is quite interesting because we are seeing a lot of luxury apartments being built there. And often, they’re full floors. That seems to be the standard that you get a full floor. You get an amazing view. Amazing view is, it does seem to be pretty standard. That’s what people want. When we have a look in Sydney, it’s also site availability. So, that’s also a bit of a limiting factor. A lot of the Sydney ones may not have the amazing view unless you go beach side. There are places like Manly and Mossman that do have beautiful apartments being built with the views. I think, though, in Sydney obviously the apartments do need to be a lot larger and very different from the majority of stock. The level of amenity is quite different as well. So, you are looking perhaps at a three-bedroom, but you are getting an amazing kitchen, you’re getting the wine cellar, and you’re getting a lot of other things that are available. And then also the services available too. And I think this is something that a lot of people are quite prepared to pay for that, they don’t just want to have the apartment. They want the availability of whether it’s a concierge or there’s a whole level of service that can be provided, and I think that’s something that a lot of them would also be looking for.
Richard: Gotcha. Look, let’s shift gear. I’m also interested to talk about the more, I suppose, mainstream, and I don’t mean that in a bad way, but the balance of the housing market in Sydney. And one of the questions I have for you is, and I get asked this by a lot of clients, how on earth are people affording to either buy or rent in Sydney given what the median prices are and wages are not that much higher. What are you seeing there? How are people with prices continuing to increase, continuing to stay in the market then?
Nerida: Yeah. I mean I think people do start off cheap. You can buy an apartment for $750,000 or under in Sydney. So, it does seem to be that people getting into the market aren’t getting in straight away with a house in Newtown or a house in Bondi. You know, they’re buying a smaller apartment in a suburb that may not be so nice. And then once you’re in the market with Sydney and property in general, that’s the point at which you can continue to upgrade. I think that’s definitely one way that people are doing it.
I think too, there’s a lot of family wealth. If everyone talks about the Bank of Mum and Dad, so I think a lot of people are relying on money from parents. A lot of dual income, which is probably pretty similar to the rest of Australia, so that’s also a factor. People relying on… if they’ve got a house, perhaps having a granny flat, I hear that happening, but using that as a little bit of extra money to help pay the mortgage seems to help. And then also, when we have a look at renting, definitely sharing. COVID was quite unusual because we did see a lot of people move out on their own and household sizes get a lot smaller. But now in Sydney, a lot more people are moving in together to battle how expensive it is to rent in the city.
Richard: My question to you then, is there going to be a tipping point? If people are grouping up, is there going to be a point where, I mean, for example, you’ve got five people living in an apartment. Is there going to be a tipping point where people group up to an extent where just you can’t get any more people in a house and things like that? Do you think that that might occur with where prices and rents are going? What are your views on that?
Nerida: Well, I guess we see the impact when we look at migration out of Sydney. And Sydney attracts a lot of people from overseas, so we see net positive international migration, but we always see net negative interstate migration. One of the impacts of very expensive housing is that young people can’t afford to live there, and they move. Southeast Queensland at the moment does and in Northern New South Wales does seem to be one of the main beneficiaries of that. There is a lot of movement up there. So that’s one of the impacts. It’s not easily solved. It is only solved if we build enough homes. And I think it’s one of the really important shifts in housing policy that’s happened over the last three or four years that people are finally acknowledging that housing supply is the issue. That if you build enough homes where people want to live, that’s a point at which you start to get affordability. And it’s not fiddling around with incentives and there’s lots of things you can do to get people into the market. But fundamentally, if you don’t have enough homes, you can’t get affordability.
It is a focus for New South Wales, obviously. They’re probably not doing as good a job as we’re seeing in Victoria. I mean, Victoria has been able to get a lot of housing on the fringe at a low cost. We haven’t seen that in Sydney. So, I think there’s always a lot that can be done in terms of planning. But the trouble too with planning in New South Wales, we do still have a lot of very small local governments, so that makes it quite difficult to work with them. There is land. I think people think there’s not the land, but there is land. Obviously, the servicing’s a problem. And then also, a lot of pushback from local residents that, on the fringe, you can get a lot of development. But, I’m sure you’ve seen it in the media, people trying to get North Shore development around train lines. There’s so much local community pushback that it is quite difficult to get stuff up and running. And that’s not just a Sydney problem, but it’s very noticeable when you look at housing approvals and you look at the premium, the more expensive suburbs of Sydney. You’re not really seeing many being approved. Whereas you see it on the fringe, and you see it out west. There’s definitely a lot being approved there.
RIchard: Okay. Final topic that I’d like to talk to you about is I was up, maybe it was about a month ago in Sydney, and I saw at that point you had a new train line open, or it was at least an extension. And I know that not only was it on the news, I had a bunch of my colleagues coming in and going, “oh, my goodness. My commute into the CBD has been cut in half.” What do you think the impact of that will be on, I suppose, house prices or land values and where people are now able to or would like to live?
Nerida: Yes. Great. You know, we know that people love a train line. They love it more than a big freeway ripping through their area. So having better transport links is absolutely a positive. And the quicker the train, the better it is for people to get in. So, it’s interesting looking at the impact of train lines. It’s hard to untangle what’s happening in the market with the train line and other market factors that are going on. But, typically, as soon as the project’s announced, we see a bit of a jump in pricing. Once it’s funded, a bit more of a jump. And so much so by the time the train line’s open, houses are probably priced in already what’s been put in place. But, there’s a definite positive link. And it is a credit to the New South Wales government that they got that project up and running, and it has created quite a difference to people’s lives, and a much more positive commute for a lot of people.
Richard: Look, I’ve lived in Melbourne now for the last 14 years, and when I go up to Sydney, I am incredibly impressed with the infrastructure that’s being delivered there and how the government’s just got on and done it. It’s actually really impressive to see and also see their delivery because, as I said, I’ve had colleagues in my office, in our office, that they’d come into the CBD and their commute’s been cut in half. And, suddenly, their times now are not too dissimilar to my travel time if it’s 25 minutes to get in, whereas it used to be over an hour. And that, I think, is really important. It’ll be capitalised into land values, and there will suddenly be markets further out or in different locations now that are more accessible. And, certainly, we have acted for various developers who, in the past, have even picked up sites in anticipation of that. So, it’s interesting and I think it’ll be a good case study. Certainly, I’m going to work with our Sydney office to look at what’s happened there because there’s the opportunity to look into Brisbane and what’s happening in Brisbane in the lead up to the Olympics with that delivery of the infrastructure. And I think that Sydney leads the way in that it is the most mature apartment market. I also think the most mature housing market across Australia, but just having to get on and some of the supply side constraints that they have, I think that they are I mean, obviously, more could be done and sometimes I know people are quite critical of not enough being done. But certainly, from where I’m looking, they’re doing more than they are in Melbourne. And I hope that Melbourne takes a leaf out of Sydney’s book and gets cracking with increasing density and increasing it faster.
Nerida, I know we’re almost out of time. Is there anything else you wanted to talk about? I forgot to mention at the beginning of the podcast, you’ve just prepared a fantastic report on the prestige housing market. I’ll put a link to the notes. I skimmed it, haven’t read it in full detail, but it goes across all the housing markets. And I was particularly impressed with the growth of the median and then the upper or the 95th percentile. I’ll put links in the show notes to that. Is there anything more in that report that you wanted to talk about or highlight?
Nerida: Look, I think Gold Coast is, I think I did mention it during the podcast. That’s definitely worth to mention, that median is sitting at about 1.17 at the moment, but that’s been a market that we’ve been quite shocked at how much or how well that upper end has performed and how much it’s changed. I think Gold Coast always used to be that cheap holiday market that people bought low-cost apartments. But now, that market’s kind of stopped, and now we’re seeing incredible luxury being built throughout the whole coast. So it is probably the market that has changed the most since COVID.
Richard: I’ve done a huge amount of work up there in the apartment space and you’re right, that luxury apartment space, especially the south of the Gold Coast, where sites with about eight or nine levels, eight or nine apartments, are getting crazy high value rates and prices, and it is a lifestyle choice. And a lot of buyers, I’m led to believe from our Valuers, are coming from New South Wales. Some of them have even said it’s the new Byron Bay. I don’t know if that’s controversial or not, but they’ve literally said it’s more affordable than Byron Bay and people are going up there and wanting to live that lifestyle. So I’ll be interested to see if that trend continues, but, certainly, I’ve also been very impressed with the growth there. And, also, the buyer demographic seems to be more own occupiers or the tree changer, sea changer rather than investors. And so that says to me that there’s less risk in that market from a settlement over the next few years.
Anyway, let’s call it there for now. As I typically do, I like to just close-up with three things that I’ve learned today from yourself and there’s more than three, but the top ones that I did learn really are apartment living and especially for first home buyers in Sydney. That seems to be the way that the routes that a lot of first home buyers are taking. And I can understand why that is because if you can get an apartment for $700,000 or $800,000, a new house and land package, 60kms from the city costs a million, I think, or even over a million. So, there’s that affordability proposition. And I think Melbourne can learn quite a bit from Sydney where it’s going in terms of just getting increasingly dense and living in apartments from an affordability price point of view. And, certainly, those buyers, obviously, getting into the market and then upgrading when they can down the line.
It’s fascinating to talk to you about that high end market. I had no idea that there’d be a lot of buyers either in Melbourne or in other states that are buying in Sydney, but that makes perfect sense. It would be a very good investment if you’re able to get your hands on one of those houses in that area. And then, finally, I’m convinced that there’s more work to be done around the impact of new metro lines coming through. I do know that there’s a lot of people that like travelling by train or light rail, as opposed to road. And I think that Sydney certainly, we now have some of the dots. We could look at what’s happened with prices and rents and land values and the ripple effect it has to travel times to and from the city or to and from some of those other areas. So, there’s certainly some more work that we’re going to do there, and I’d love to collaborate with you perhaps on that into the future.
Is there anything else you’d like to say before we end?
Nerida: No. I think I’ve covered everything.
Richard: Thank you so much again for coming on the show. And as I said, we’ll post the link to the very, very informative report. I’d encourage our listeners, you obviously know who Nerida is, you’ll be able to get that report. So that’s a fascinating read, instead I’ve only really skimmed it, but still looking at some of those figures. And the growth in some of those areas, I’m just astounded. Definitely housing and detached housing is a significant source of wealth for a number of Australians. I don’t think that’s going to change. I suppose policymakers do need to be aware of that because it’s quite different compared to cities overseas where more money is perhaps held in shares, for example. Australia, definitely, it’s real estate.
Anyway, I hope that you enjoyed the show and tune in to the next show coming up in two weeks’ time. Thank you very much.
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