Performance anxiety grips Sydney's well-heeled as cracks appear in high-end market

Performance anxiety has gripped Sydney’s prestige market as it grapples with the comedown from last year’s high-end bonanza and a stalemate develops between buyers and sellers.

As cracks appear in parts of the top-end market, prestige agents fear that the broader market malaise which saw Sydney’s median house fall 9.9 per cent last year has started to spread up the price chain, in particular to the bottom rung of the $5 million-plus prestige market.

It’s a turnaround on the previous 12 months in which Sydney recorded its best-performing ultra-prestige market, capped off by the record $100 million sale of the Point Piper estate Fairwater.

“Right now you need to be hard on owners on pricing because the reality is the market is changing,” said Elliott Placks, director of Ray White Double Bay.

“There’s definitely buyers out there but they’re not at 2018 prices. They’re at 2016-2017 prices.”

A shortfall on stock levels is holding up the sales results, says buyers’ agent Simon Cohen, of Cohen Handler, who points to the absence of a single waterfront home for sale east of Rose Bay.

“When good stock hits the market it will still sell well, but the stock that’s not moving has warts on it,” Cohen said.

Richard Shalhoub, of Sotheby’s International, said state and federal elections in coming months were fuelling the sense of uncertainty.

Signs the broader market downturn was moving up the price chain emerged last year when a Georgian terrace on Argyle Place sold for $2.67 million, a loss on the $3 million it transacted for in 2016 when sold by Macquarie Bank’s former head of wealth management Bill Marynissen and his wife, Angela.

The former housing commission house sold unrenovated in 2014 for $2.35 million.

That was quickly followed by the sale of a Victorian terrace on Kent Street for $2.1 million, down on the $2.125 million it sold for, unrenovated, by the government in 2016.

Meanwhile, in Hunters Hill an Alex Popov-designed house on the waterfront sold in December for $4.9 million, down from its 2016 sale price of $5.15 million.

The selling agent Jessica Ke, of Ausrealty, was until recently selling the historic Windermere estate in Hunters Hill on behalf of Chinese billionaire Sam Guo, known as the Chinese Gatsby to locals, with hopes of $18 million.

That guide was revised to $16 million earlier this year but when interest failed to produce a buyer, it was pulled from the market.

Another Chinese billionaire to feel the market chill is Zetian Zhang, wife of JD.com founder Richard Qiangdong Liu. She shocked residents in the Stamford Residences at The Rocks when records revealed she had paid $16.2 million in 2015 for the penthouse.

Despite hopes of $18 million in 2017, it was finally sold last December for $13.5 million to hotel baron Ramy Arnaout and his wife Nadia.

“Buyers want to see good value because they know there’s been an adjustment in the market,” said Greg Weisz, of Richardson & Wrench Double Bay.

Weisz and colleague Michael Dunn are selling a Victorian terrace in Darling Point that last traded in 2017 for $4.8 million when sold prior to auction by ragtrader Malcolm Webster.

The owners have since stripped it back internally and started again with new plumbing, wiring, kitchen and finishes, said Weisz. The result goes to auction on February 27 with a $5.2 million guide.

Mosman agent Kingsley Yates, of The Agency, describes the state of Mosman’s market as one of stage fright given only nine house sales to date this year compared with 23 houses sold in the first two months of last year.

“There are big numbers coming through open inspections, very big numbers, but the buyers are all just kicking the tyres and not transacting,” Yates said.

“And there’s more grief to come. Once the market hits its level transactions will start to happen, but we’re not seeing that yet.”