Your chance to swoop on a palace

A grand two-level Victorian mansion standing on a vast 1070 square metres of land; a secluded Georgian estate set in landscaped gardens; a fabulous six-bedroom house on a private waterfront reserve with panoramic views over Sydney Harbour.

A flood of stunning top-notch houses has now hit the market and, with prices softening at the top end and more discounting going on, there’s rarely been a better time to indulge those fantasies about snaffling one of Sydney’s top homes.

In the June 2010 quarter, 13,912 houses priced $2 million and over came on to the market, according to (Fairfax-owned) Australian Property Monitors (APM) figures, up from 12,263 in the March quarter. That’s the highest level since the depths of the global financial crisis – the three months to December 2008 – when 15,053 came on.

It means that, currently, there are 27,155 houses worth $2 million-plus for sale in Sydney, as against the 25,561 last quarter, by owners who want to cut their mortgages or costs, reduce their exposure in an uncertain time, or downsize.

“There’s also been increased discounting to top-end homes in the June quarter,” says the economist for APM , Matthew Bell.

“It’s now standing at 12.4 per cent, up from 10.06 per cent last quarter. It still hasn’t reached the levels from the GFC, however, when prices were being discounted by 16-17 per cent.”

Discounting for Sydney houses overall has been static at 5.7 per cent since March. Before that period, it fell consistently from an average level of discounting of 8.5 per cent in January 2009.

Other property experts agree it’s the top end of the market that’s now softening the most. “Our latest figures are showing that it’s the premier end of the market that’s seen the biggest falls in values,” says an RP Data analyst, Tim Lawless. “They’re now down by 2.8 per cent.

“Over the last 15 months it had been the best-performing sector but now there are definite signs of weakening due to people having the jitters globally over the equity market and a fall in business confidence. We’re now seeing a real transition into a buyers’ market and buyers will have more leverage.”

Ten of the best: Sydney’s grandest homes

5 The Greenway, Duffys Forest: An architect-designed five-bedroom home on 2070 sq m adjoining the Terrey Hills golf and country club, with a heated pool and tennis court. Passed in at auction in July with a vendor bid of $2.75 million, now offers over

$2.8 million. “It’s a great spot,” says agent LJ Hooker’s Kevin Packham.

18 Shaw St, Petersham: This six-bedder on 1560 sq m was bought in October 2004 for $2.75 million. It’s recently been converted back into a home and restored. For auction on August 28 at more than $3.6 million. “At that figure, it’s a very good buy,” says McGrath agent Simon Pilcher.

55 Ocean View Road, Freshwater: A newly built four-bedroom home opposite the beach. Price guide in earlier campaign ‘‘more than $4 million’’. Now $3 million-plus with Belle Property’s Sandro Petrini at auction today.

30 Viret Street, Hunters Hill: A four-bedroom sandstone house, circa 1898, newly renovated with views across the Lane Cove River. For sale last year with hopes of about $5.9 million. Now offers of about $5 million, according to David Ward of Ward Partners.

21 Emerstan Drive, Castle Cove: Five-bedrooms and Middle Harbour views from all living areas in this five-year-old home. Put up for sale originally in June at $4 million. Its price guide is now $3.8 million with Edwina Lim of Warwick Beehag Property Agents.

8 West Street, Lewisham: A stately, fully restored Victorian residence, this four-bedroom home has four marble fireplaces, crystal chandeliers and ornate cornices. Withdrawn from auction in July, now expressions of interest of more than $2.2 million via Harris Tripp agent Virginia Nicoll.

7 Jane Place, Dural: A six-bedroom mansion on a private 2.5 hectare estate, “Normandie” has a great hall with cathedral ceilings. Originally $6.5-$7 million, now $5-$6 million at auction through LJ Hooker Dural agent Neil Keene.

84 Clareville Avenue, Sandringham: huge Hamptons-style beach house on 1100 sq m on the edge of Sandringham Bay, with five bedrooms. Expressions of interest $4–$4.5 million through McGrath agent Greg Tsaprazis.

1 Myola Road, Newport Beach: With private beach access and 270-degree views across the ocean, this four-bedroom, four-bathroom Susan Rothwell-designed house on the beachfront. Expressions of interest of about $12 million through Max Walls International.

16 Iluka Road, Mosman: A six-bedroom waterfront on 1720 sq m with stunning harbour views. For sale in May 2007 for $15 million. Now $14 million. “My vendor is keen to sell at the right price,” says Andy Cruise with Raine & Horne, DoubleBay.

Total listings up

Total property listings across the whole of Sydney are up. SQM Research’s managing director, Louis Christopher, says they’ve now hit 27,600, including 16,400 houses – up from the June totals of 26,180 and 15,660 houses and even the totals a year ago, of 27,440 and 15,170 houses in July.

These rises have been particularly noticeable in many of the most affluent areas. “Stock levels in Point Piper, for instance, have been rising really since February this year and at levels last recorded back in 2008 when we were having the general downturn,” Christopher says. “Now there are 39 houses on the market, compared to last month’s 34 and July 2009’s total of 23.”

Similarly, on the lower north shore and in the eastern suburbs, stock levels have been increasing since the beginning of the year. In Strathfield, there are now 99 houses advertised for sale compared with 70 in January.

“In the second half of 2008, there was a huge downturn in the upper end of the marketplace and listings were significantly up and prices came down,” Christopher says. “Now, listings are up again and the market is slowing, as there’s a loss of confidence in the housing market, there are problems in the US market and there’s the prospect of rising interest rates. But we’re not seeing a rush of panic-selling; my guesstimate is that it won’t be a rout.”

Buyers’ market

The average number of days these properties are on the market before selling is higher than during the GFC, according to APM. Back in the September and December quarters in 2008, it was between 95 and 106 days. Now it is 122 days on average.

“But that’s down from a high of 162 days in the September 2009 quarter,” Bell says. “The number of days has been falling since then. Yet you would have to say that a buyer is now in a better bargaining position, with more stock on the market and better discounts.”

Winter and the looming election are also driving prices down, according to a director of sellers’ advocacy and buyers’ agency Hand McPhee, Peter Hand. “We feel that there are quite a lot of houses quietly on the market now and those people who have to sell are selling at lower prices,” he says. “We’ve seen some fairly significant price reductions.”

Yet, with all this extra choice around and falling prices, there may still be no need for purchasers hoping to pick up a top-end bargain to rush.

“If listings continue to grow, we’ll see more discounting as we hit springtime,” Christopher says. “So now is a good time to research and get to know the market.”

Lawless agrees. “I think we’ll see the top part of the market softening a bit more and flattening even further,” he says.

Owner bides time with bayside jewel

When Camilla Schroder (above) first put her magnificent family home overlooking Mosman Bay on the market in January, she was hoping for $5.5 million. Now, seven months later, the price has dropped to $4.5 million.

“We’ve been pretty open to the fact that it’s the worst time in the world to sell,” she says. “We’ve been hit by the recession like everyone but it means that, for some people, it’s a great time to buy.”

The Victorian-era harbour-side mansion, built in 1893, is on 920 sq m on Lower Boyle Street. With 180-degree views over Mosman Bay, there are five bedrooms, 2½ bathrooms and an 18-metre saltwater pool and cabana. Waringah has 4.6-metre-high ceilings, a wraparound verandah and a double lock-up garage.

It’s been in the same family for nearly 45 years. Now Schroder is planning to freshen up the decor before putting the house back up for auction with Kingsley Yates (0411 875 017) of Ray White Lower North Shore.

“My parents moved in two days before I was born,” says Schroder, 44, who has two children herself, Max, 14, and Zac, 11. “It’s right on the water’s edge and will never be built out. It’s always been the jewel in the crown.”