Mulitimillion-dollar property flips making high-end investors rich

The proverb that fortune favours the brave is playing out in Sydney’s high-end housing market where investors who bought into last year’s real estate market are flipping luxury property for multimillion-dollar windfalls.

At least a dozen prestige property sales of recent months are resales from last year, many of which have returned capital gains to the owners of more than $1 million and often after no or little material improvement.

“The market slowed down significantly last year, and investors who had the courage to step up then are doing well,” said Dan White, managing director of his family’s property giant, Ray White Group. “What surprised a lot of us is the fact that the market has bounced back so sharply.

“There’s been at least a 20 per cent growth in the prestige market, and more than 30 per cent on the better properties.”

Values across Sydney’s broader housing market have also fared well, with house prices jumping more than 15 per cent in the 12 months to June, according to figures from CoreLogic.

Given an average stamp duty of about 6 per cent on these luxury properties, that still leaves a significant uptick for the owners even after a brief ownership, said Ray White Double Bay principal Elliott Placks.

Tech entrepreneur Robin Khuda, founder and chief of AirTrunk, was among the most bullish property shoppers of last year and into the first quarter of this year, buying more than $74 million worth of prime Sydney real estate.

Among those purchases was a Woollahra townhouse for $4.675 million. It returned to the market last week for an asking price of more than $5 million and sold earlier this week for $5.725 million, representing a 22.5 per cent growth in a year.

“A lot of the time it’s a bit like rolling the dice,” said Alexander Phillips of PPD, who sold Khuda’s Woollahra townhouse.

“Everyone ran from the market last year given there were forecasts the market was going to fall back, and no-one saw a property boom of this size coming. What’s helping to prop it up is there is a lot of turnover so the comparables at these top prices are all there for buyers.”

It isn’t just high-end home investors making a fortune, said Ken Jacobs of Christie’s International. “The state government is making more on all this turnover than anyone else.”

Indeed, on the Woollahra sale alone, state coffers swelled by more than $600,000 thanks to Mr Khuda’s purchase last year and sale this week.

Mr Khuda is set to go again, listing a  three-bedroom apartment McMahons Point apartment he bought in June last year for $6.1 million from former New Zealand prime minister Sir John Key. With no cosmetic changes in the meantime, it is now on offer for $8 million through Luke Hayes of Venture Property.

Among some of the top winners this year is Jo-Ann De Lorenzo, daughter of the late haircare tycoon Vincent De Lorenzo, who bought a rundown house in Centennial Park for $6.5 million just days before its scheduled November auction, settled on it in March, and resold it last month for $8.22 million.

Newcastle property investors Wayne and Rowena Hamilton bought a penthouse in The Pier at Walsh Bay last December for $11 million. McGrath’s Richard Shalhoub and Knight Frank’s Adam Ross declined to reveal how much it resold for just two weeks ago but local sources say it was about $12 million.

Outgoing AMP chief Francesco de Ferrari bought his historic Woollahra house Weeroona in May last year for $7.5 million and, after a renovation by architect Michael Robilliard, has sold off-market for about $13 million.

Also cashing in is Armando Kusuma, son of Indonesian mobile telco founder and property developer “MJ” Martono Jaya Kusuma, who bought a woollahra house at auction last Spring for $5.71 million and resold it five months later for $7.1 million.

The Palm Beach market has been among the most bullish. Peter Robinson, of LJ Hooker Palm Beach, said house values have grown at least 30 per cent in the past 18 months.

A 1600-square-metre block of land in Palm Beach that sold early last year for $1.3 million resold unimproved for $1.98 million in April.

Records on the Whale Beach house bought late last year for $11.15 million by Dr Philippa McCaffery, founder of Clear Skincare cosmetic skincare clinic, showed an even more bullish return when it was resold in February for $11.6 million. That was a gain of $450,000 in just three months.

In Manly, gold traders Kurt and Nathalie Jaggard have resold their apartment on oceanfront reserve at Fairy Bower for $7.2 million to Baillie Lodges founders James and Emma Baillee less than a year after they bought it for $6.01 million.

Another prolific Sydney property shopper of last year, William Wenhao Wu, a director of his family’s property development company Mayrin Group, is also hoping to chase the market. Having accumulated more than $100 million worth of high-end real estate, he has listed his Bellevue Hill mansion for sale.

Purchased early last year for $11.08 million, it was renovated since and passed in at its May auction for at $18 million. Ray White’s Mr Placks and Sotheby’s Michael Pallier are now asking $19.5 million.