What does it take to buy at the top end of the market?

For apartment buyers, getting into the top 2 percent costs $1.49 million.

But it costs $6.9 million to rank in the top 2 percent of homes in the Stonnington local government area, which includes the affluent enclaves of Toorak, South Yarra and Malvern.

For Bayside, a waterfront stretching from expensive Brighton to Beaumaris, the elite limit is $5.84 million. For the city of Melbourne, including Carlton and East Melbourne, it’s $4.73 million, and for Booondara, home of Hawthorn and Kew, it’s $4.48 million. For vacation homes, the Surf Coast has a $3.32 million cut-off value.

“It’s generally out of reach for the typical Australian. It’s way above what you might describe as normal prices that most people can afford to buy in,” Lawless said.

“Once you get to the top 2 percent of the market and above, you generally look at households with fairly significant incomes, whether they have a history of wealth accumulation or intergenerational [transfer]†

He was optimistic that, given enough time, people without family wealth would still be able to buy this type of property, provided they were in the middle of their careers, were lucky enough to have made some good investments through some real estate cycles, and were frugal. .

This house in Elwood sold for $3.2 million.

This house in Elwood sold for $3.2 million.Credit:McGrath St Kilda

“But the vast majority of Australians would probably consider owning a house worth that much more a fantasy than a reality,” he said.

He said the prestige that comes with buying Inner East or Bay neighborhoods can create demand, in addition to geographic factors such as water views, proximity to the city and sought-after schools. Homes here often sit on larger blocks of land, may have more bedrooms, and may have heritage features.

Interest rate movements are less of a factor in top markets than the condition of stock markets, currency markets or the outlook for white-collar employment, as buyers may not buy with high debt.

By comparing the ultra-high end to the median price in an area, the wide range of price points there can be demonstrated. The upper end of Stonnington is 175 percent higher than the median price, while the difference in neighboring Glen Eira is only 88 percent.

At the very top, this Toorak home sold for $38.5 million.

At the very top, this Toorak home sold for $38.5 million. Credit:Paul Jeffers

“All the houses in that area [Glen Eira] will be high quality, it’s quite expensive, but you don’t have those extremes of absolute top values ​​being reached,” he said.

Marcus Chiminello, director of Marshall White, said there were different categories of buyers for homes over $7 million in Stonnington: those who have had exceptionally successful business success on their own, those who have been wealthy over generations, those who have owned real estate for several years. own while prices have risen, or those who may be borrowing too much.

While the $5 million to $10 million market is now slower than last year, the market above $10 million is still strong and there is a shortage of homes for sale, he said, as buyer demands have shifted since. the pandemic struck.

“Home is vital – it’s more than just a place to eat and sleep, it’s become a haven. It has become a workplace and a training place,” he said.

“It has to be more functional and more versatile.”

5 Cleeve Court, Toorak sold for approximately $6.5 million.

5 Cleeve Court, Toorak sold for approximately $6.5 million.Credit:Marshall White

He recently sold the three-bedroom house at 17 Albany Road, Toorak, above the top of his $6.85 million to $7.5 million price guide, saying it was comfortable but could have been bought as a land opportunity. He also sold the renovated 1950s home at 5 Cleeve Court, Toorak, for about $6.5 million.

At the very top, he sold a $38.5 million Toorak mansion that crypto king Ed Craven bought from property developer William Deague, as well as the purchase of Chemist Warehouse boss Sam Gance, for $43.1 million in the same suburb. in partnership with Forbes Global Properties’ Michael Gibson.

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Gibson said buyers in the top 2 percent of the market were both those who worked hard to be successful and those who were given financial opportunities.

“In today’s world, it’s easier to become successful faster than ever before, through technology,” he said.

“Some younger people have made money at a much younger age than their parents.”

He said the market of more than $5 million remained healthy despite declining inventory levels over the winter, and demand for renovated or new homes was highest.

Gibson’s recent sales closer to the top 2 percent threshold include the five-bedroom house at 2 Woorigoleen Road, Toorak, marketed as a home with fine appeal but potential to be reimagined. It sold for $7.93 million.

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