Sydney’s Eastern Suburbs: What your budget will buy, and is now the time? - July 2024

By Munro Donen, Principal Buyers' Agent & Director, Propertybuyer East

Sydney’s Eastern Suburbs appeal to a wide cross section of buyers. While it’s true we have diverse property options, those wanting a quality home still need a sizeable chunk of funds at their disposal. The Eastern Suburbs market could be the most resilient market in Australia with a strong history of capital growth.

Warren Buffet once said, “Be fearful when others are greedy and greedy when others are fearful.” Given increased interest rates and some general economic uncertainty, right now could be the window of opportunity you’ve been waiting for.

After working in international property markets for over four decades the one thing I can categorically say is that one can’t time an investment in property, it’s more about time in the market rather than trying to right time the market.

So, what sort of budget is required in the Eastern Suburbs, and should you be buying there right now?

The value of your dollars

Let me state plainly up front – finding a high-quality detached family home of four-to-five bedrooms in the Eastern Suburbs for under $7 million is challenging.

The market is among the most coveted in the world. There’s the beachside to enjoy, enviable lifestyle options, and world-class retail, bars and restaurants. There’s comprehensive infrastructure too, including ferries, buses and trains that can quickly take commuters to the CBD and beyond.

That’s not to say you can’t locate a home under $7 million in the Eastern Suburbs, but there will need to be some compromises.

As you move towards the harbour side of the Eastern Suburbs you should expect to have a budget of at least $7 million for a property of substance. This would include suburbs such as Double Bay and Rose Bay. $4 to $6 million in the northeastern portion of the Eastern Suburbs should secure a pretty good home, such as a brand new semi-detached or a beautifully renovated older-style property.

Prestige mansions in highly coveted Bellevue Hill and Vaucluse with ocean or Harbour Bridge views will require a budget exceeding $10 million.

The southeastern suburbs offer more affordable options. These include Randwick, Queens Park and Centennial Park. Moving toward the southeastern beaches – south of Maroubra and toward Little Bay - you’d be surprised to see what $3 million to $4 million can buy. It can be literally 50 per cent less than what you’d pay for a similar home on the northeastern side of the Eastern Suburbs. Clients are often surprised when I show them the value these locations present. For example, at prices starting in the early $3 millions, you can secure a five-bedroom semi with two living areas, double garaging, garden and pool on a generous size site.

The challenge for purchasers is that the supply of publicly advertised listings is tight at the higher end with many sales taking place off-market. Selling agents will draw on their buyers’ agent network often before a property even gets to market.

You may see sold properties showing up on property portals that you never saw listed for sale in the first place. The reason this happens is that buyers’ agents have had access to these properties weeks before they go online. The early bird gets the worm in real estate. If you’re using a buyers’ agent there’s a better chance of getting access to these opportunities before the rest of the market.

Stakeholder sentiment

The softer auction clearance rates being reported at present aren’t telling the real story.

There is a gap between buyer and seller expectations, but agents are also using auction campaigns as part of a holistic marketing strategy designed to bring negotiations to a head. A high proportion of the properties being advertised for auction are actually transacting either pre- or post-auction.

At auctions I’m seeing a larger number of buyers’ agents bidding on behalf of clients too. If you plan to purchase at auction, then expect to be up against two or three buyers’ agents at each event. Put bluntly, in this situation you are a house cat in a cheetah’s den. Buyers’ agents are highly skilled, well connected and have the knowhow to achieve the best chance of success. Everyday purchasers will be left in their wake.

The market ahead

I remain bullish about the market’s prospects.

Nicola Powell, Domain’s chief of research and economics, said home values across the capital cities would lift higher in the next 12 months. Domain’s analysis predicts house prices across Sydney will increase eight per cent in that time. Blue-chip locations, like Eastern Suburbs addresses, can expect to do even better.

Stock levels are low, demand is strong, and people are reticent to sell because they know they can’t rebuy easily into the market.

I have also recently seen many older buyers cashing out of their long-held family homes to downsize and release some capital, and often it’s to help their kids financially. These owners might sell a $15 million home, buy a $7 million apartment and then invest the rest in super or assist their children. Of course, when this wealth transfer happens, the transaction creates two or more new buyers because the cashed-up children are now eager to purchase their own home. This is driving demand even harder.

In Bellevue Hill in particular, there’s an elevated number of 60-to-80-year-old owners selling their big homes and resettling into luxury high-end apartments.

Quality properties are available in the east, but trying to purchase in this market without the assistance of a buyers’ agent leaves you at an extreme disadvantage. You’re in safe hands with a buyers’ agent who is there as a coach, advisor, negotiator, and to open you up to new opportunities in the market. I recently helped a couple who sold in North Bondi to release capital for their children and their superannuation. Their challenge, however, was that they didn’t have a clue where to go next. I showed them suburbs they had never even thought of, but which delivered homes well beyond their initial expectations.

Use your buyers’ agent to open your eyes to some opportunities that you may have never considered. You’ll be surprised what we can uncover for you.

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