Buyers snap up prestige homes in Toorak and South Yarra this summer

There’s wealthy, and then there’s super-wealthy.

Even over the summer break, cashed-up buyers have been snapping up ultra-prestige Melbourne homes priced in the $10 million to $20 million range and above.

But the market is tougher for second-tier mansions of about $5 million as banks become more cautious about lending such large sums to well-paid professionals, and real estate agents having to work harder to close deals.

Buyers’ agent David Morrell, who acts on behalf of a well-heeled clientele looking for top properties without overpaying, says that, even though it would be in his interests to “kick the market to death,” he can’t.

“The top end’s fine,” Mr Morrell told Domain. “The better properties are still highly sought after.”

But someone trading up from a $2 million house to a $5 million house may no longer be able to borrow $2.5 million in light of the regulatory crackdown on bank lending, he said.

“It’s not fallen off the twig, but the D and C grades in that market are getting hammered,” he said.

Much of the activity happens in secret, with owners preferring not to advertise their homes for sale but to ask an agent to look quietly for a potential buyer among their networks.

A recent deal in South Yarra emerged as a prime example, with entrepreneur Owen Kerr lodging a caveat on a Marne Street mansion once owned by the Baillieu family, through agency Kay & Burton. It was priced in the mid-$30 millions, said multiple sources with knowledge of the deal who could not speak publicly.

The agency’s other summer deals in Toorak included a Yar Orrong Road residence set to trade for about $16 million and a Hopetoun Road home to trade for about $14 million.

Elsewhere, former Domain boss Antony Catalano reportedly bought a penthouse in Tim Gurner’s St Moritz project in St Kilda. The asking price was $30 million, and Mr Gurner said in a statement that although the contracted price was confidential, he was “extremely happy with the result”.

The median house price in Toorak is $3.1 million, on Domain data.

“The inquiry in the $10 million to $20 million range is incredibly strong,” Kay & Burton’s Mike Gibson said, adding that his team had recorded nearly $40 million in sales across four deals in January.

“There’s no stock for me at the moment, that’s the big issue. I would have at least half a dozen well-qualified buyers between $10 million and $20 million that can’t be satisfied.”

Marshall White director Marcus Chiminello is also seeing strong activity above $10 million, with local buyers hoping to upgrade and some expats planning to return to Melbourne soon.

Convenient addresses and well-renovated or brand new properties are the most sought-after, he said.

But he says buyers have more choice in the $3 million to $6 million range: “That’s the marketplace where we have seen some fading values over the past 12 months, but I think people now recognise there is some great value in those price points,” he said.

Despite the interest in top homes, it can take time for the upper end of the market to find its level.

After the sale of Mirvac director Marina Darling’s house in 2017 for a then-record $38 million, some vendors have been inspired to set their hopes high.

A nine-bedroom Hawthorn residence known as Avon Court was listed before Christmas with a $40 million guide, after earlier being offered for $45 million to $50 million.

Two overseas buyers are now looking at the home, said listing agent Jeremy Fox of RT Edgar.

He also confirmed the agency’s recent sale of 9 Cole Court for around $12 million.

“People are tending to pay up a bit to secure the good properties,” Mr Fox said, adding that some potential vendors were hesitant to list before the election.

“Buyers are getting frustrated wanting to buy.”