The spring selling season is almost here but Sydney's prestige market gone underground

The economic impact of the COVID-19 pandemic was, at first glance, expected to result in bargain buys for high-end house shoppers but has instead resulted in large swaths of the prestige market going underground.

But as more high-end houses are offered only to select buyers privy to the discreet off-market listings, buyers run the risk of paying overly inflated prices.

Sydney’s shortage of luxury homes to meet buyer demand goes back two years, but the surge in off-market listings started in the March and April lockdowns when agents were unsure if authorities would shut down open inspections and many elderly vendors of some of the city’s most expensive homes opted against opening their doors to strangers.

It has left buyer’s agents busier than ever.

Leading buyer’s agent Deborah West, of SydneySlice, knows of more than 20 properties priced in the $10 million to $20 million range in Bellevue Hill and Vaucluse alone that are off-market. “Most of which are over-priced or second-tier stock,” said West.

There is half that number in that price range advertised on property portals.

It is a similar story in Mosman, where she says there are more than 10 properties quietly on the market in the $10 million to $35 million range.

“Generally, the majority of off-market stock is priced opportunistically in the hope of catching an uneducated buyer who will pay a premium,” said West. “Our job is to get access to the properties, but also ensure clients aren’t over-paying in the process.”

Bill Malouf, of LJ Hooker Double Bay, agrees. “The stuff I’m seeing off-market is at prices that will never be crystallised.”

Industry doyen Ken Jacobs, of Christie’s International, said in his 40 years in real estate he couldn’t remember a market in which such a large proportion of prestige stock was off-market.

“Sometimes it makes sense to maintain a property’s mystique if you have a known buyer who is willing to pay a premium and in a market where you have buyers in the wings for the right property.”

The Mosman residence designed by architect Alex Popov and bought by childcare mogul Brendan McAssey four years ago for $17.3 million is a case in point. It has been quietly offered to buyers in recent months after McAssey and his wife Elizabeth decided to move to the Southern Highlands.

However, it never sold so a sales campaign was launched last weekend with a revised guide of $20 million to $22 million through Belle Property Mosman’s Tim Foote and it sold days later.

“These sorts of elite properties are hard to price, so these off-market listings are often more about letting the owners test the market first,” said Domain senior research analyst Nicola Powell.

West says when top-tier property is offered off-market it will sell well. She points to the recent $9 million sale of a modernist Centennial Park home of gallerist Sarah Cottier and her photographer husband Ashley Barber. The Agency’s Ben Collier took 10 buyers through the property, with four making offers before West bought it for a client.

Of the top five houses sales this year, ranging in price from $24.5 million in Newport to the $34 million waterfront sale in Vaucluse, only one was sold off-market – the less than $30 million Rose Bay home of Shay Lewis-Thorpe to neighbour Louise Christie.