Russell Staley has put his Collaroy home on Sydney’s northern beaches up for sale. The engineer, a former Worley Parsons executive and Rich Lister, is selling up and moving – four houses up the road.
While Staley is selling the Peter Stutchbury-designed house built for him in 2011, he’s not giving up on the finer things. He’s getting architect Virginia Kerridge to design a new home on the 1500-square-metre site on two blocks he purchased this month.
“This house is a sculpture,” Staley tells AFR Weekend. “It’s not a house. It’s just a fantastic house to live in. It’s got a lot of features that people wouldn’t expect.”
Those features include guillotine doors – 400kg glass panels, linked to 350kg counter-weights – that rise up into the wall of the double-storey living room at the push of a button. Being built by an engineer, however, it has redundancy built in. The house has a back-up generator and the doors can be cranked up by hand.
Paint on the steelwork is the same used on offshore oil platforms, and the reinforced concrete used in the house reflects the choices of a client who started (but never finished) his PhD in the material.
So how confident is he of selling in the current market?
Staley at least wants more than the $15.5 million he paid for the combined lots up the road in the Collaroy Basin. He’s confident that despite the falling Sydney market, demand for top-end properties such as his remains strong.
“The market in Sydney of houses $3 million and less is not very good but, unless there’s going to be a GFC in the next few months, I think house prices in this top end of the market are still very strong,” he says.
When mortgages don’t matter
He’s not just being hopeful. Even amid the downturn that is concentrated in the top quartile of the two largest cities’ most expensive markets, the very top end is more resilient.
That could be because the downturn triggered by banking regulator APRA – and reinforced by banks’ extra royal commission-prompted caution – has had a greater effect on people needing mortgages than those paying cash.
“This one has been deliberately engineered by policymakers whereas previous housing downturns are probably consequences of policymaker actions or other developments,” Capital Economics chief economist Paul Dales says.
“At the higher end of the market, there would be a higher share of people buying houses that are not using finance to do it.”
Of course, this niche of the market – where settlements account for 0.2 per cent of the city’s total – is a global one and could potentially be dampened by factors such as higher US interest rates and the pullback in quantitative easing that were already contributing to the fall in values at the top end of New York’s property market, in addition to curbs affecting foreign buyers, HSBC chief economist Paul Bloxham says.
“You could say it was more a global market, so the trends with regards to foreign purchasers might have some impact on that market,” Bloxham says. “Also, the global interest rate environment would be very important – it’s not just a local story.”
For now at least, Sydney’s ultra-high net worth buyers are still active across the city’s most exclusive property markets.
Tale of two cities
“The 2017-18 financial year saw Sydney’s uber-prestige [$10 million-plus] property sales record a 5.6 per cent rise in volume while sales priced between $5 million and $10 million held reasonably steady and the number of sales under $5 million dropped by 15 per cent,” CoreLogic head of research Tim Lawless says.
But in Melbourne’s Kew, where business consultant Geoff Green and wife Anne have put their home of 22 years – and the former family home of prime minister Sir Robert Menzies for 23 – on the market with a price guide of $8 million to $8.8 million, it’s a different story.
“Melbourne’s uber-prestige market hasn’t been as resilient to a fall in buyer demand,” Lawless says.
“The number of sales at $6 million or higher has fallen by 30 per cent over the past financial year, while the $3 million to $6 million sector saw volumes fall by 3.7 per cent and property sales priced under $3 million were down 15 per cent. It seems that Melbourne’s highest value sales activity has fallen away much faster relative to lower price points.”
Staley’s selling agent, Brendan Pomponio, of Belle Property Dee Why, is also confident about the expressions of interest campaign he’s running on the house in the current market.
“North of $5 million is a breeze,” Pomponio says. “But sub-$3 million is very different.”
The pool of buyers for such a property is generally people who have sold their own business, made large stock exchange gains or are part of Sydney’s old money set. But even these bring their own challenges.
“Think of the [Sydney] Opera House and put it in Collaroy,” he says. “It’s a home someone will either love or hate. There’s nothing like it, it’s extraordinary.”