How rich listers buy and sell property in Australia

The average Australian home buyer will spend endless hours inspecting properties, attending multiple auctions, missing out on many before they seal the deal and the details become public on settlement.

But rich listers operate in a different stratosphere that comes with having access to money and resources. They can often escape the public eye, allowing them to stay above the fray of the much-loved but sometimes brutal Australian public sport of home buying.

They become part of an almost secret club where they trade the same homes, almost exclusively, among themselves.

It starts at the initial stages of house hunting all the way to the last stage when they ink a deal that often makes it hard for the public to know what they own, even though ownership of properties is a matter of public record.

They begin with employing the services of a buyers’ agent who takes on the drudgery of shortlisting palatial-sized homes.

“They’ll use a buyer’s agent to heavily vet properties that are both on-market and off-market before they inspect it themselves,” said Ben Collier of The Agency Eastern Suburbs, adding that their personal networks make recommendations too.

Celebrities and high-net-worth individuals have always shown a great degree of discretion when it comes to selling property too, according to Mr Collier – but that is starting to change in today’s tough market.

“We are seeing an evolution in this when once upon a time vendors were less open to a more open or, dare I say, publicised process,” Mr Collier said. “They’re more open to the idea of doing so because they appreciate and understand the low levels of supply.”

Another reason rich listers were more open to listing their expensive properties more publicly was the opportunity to capture the market of expatriates living abroad who were keen to return home due to the pandemic, Mr Collier said.

“We’ve gone from a village to a more global market where it would be prudent to feel as though when you are considering an offer that you have broadly exposed and not missed anyone,” he said. “We have seen a number of high-end sales that have sold recently to expat Australians that are sight unseen.”

In other cases where sales exceed tens of millions, interested parties opt to deal with agents directly after signing confidentiality agreements, according to Bill Malouf, director and principal of LJ Hooker Double Bay.

“I’ve done deals in excess of 40 million where people come to you; they will approach you privately. They don’t mind making their name known to you,” Mr Malouf said. “We can’t protect them once the property settles unless they buy it in a company structure.”

Sometimes rich listers will choose to buy the property through their accountants or lawyers under a shelf company that they’re not directly connected to, Mr Collier said, in a bid for the sale to go undetected, but it is not the only way.

“A lot of people like to keep their property purchasers private,” Mr Malouf said. “They can do it through a company structure but remember they will pay capital gains tax. They can do it under family trust structures that do not necessarily go back to the owner; there are a number of ways lawyers try to protect their clients’ privacy.”

Many international purchasers who buy existing property need Foreign Investment Review Board approval or have Australian citizenship, Mr Malouf said.

One of the most notorious examples in which a foreign buyer attempted to conceal their property purchase through a company structure and failed was the Chinese developer who bought Point Piper’s Altona mansion for $52 million. The lavish property was purchased in a company trust of which the only director was Ding Xiuzhen but was later revealed to be ultimately owned by Chinese businessman Wang Zhijun.

For many rich listers, the buying process is often kept “really low key” to the point that an associate is sent to negotiate and sign documents, according to James Pratt, chief executive and auctioneer of James Pratt Auction Group.

“It doesn’t become apparent until the contract is signed where the purchasers come from,” Mr Pratt said.

“Unless they’re wealthy people who want attention, they would like to keep it that way,” Mr Pratt said.

But, he added, sometimes these real estate transactions are also business decisions.

“Often in business, it’s more than just one person’s decision. If someone has decided to make a substantial investment in something, they may not want to make note of that.”