Words by Emily Power
The balance of power in Australia’s luxury property market is tipped to Toorak’s advantage.
Melbourne’s scarcity of trophy-home suburbs gives it an edge over Sydney.
Toorak, Melbourne’s most expensive suburb, has outperformed Sydney’s priciest suburb, Bellevue Hill, on key metrics.
Limited options for buyers support prices and sales activity. Melbourne’s small concentration of upmarket suburbs plays to this, compared to Sydney’s widespread prestige areas, RT Edgar Stonnington director Sarah Case says.
Sydney boasts more multimillion-dollar suburbs, from the harbour to the northern beaches. Meanwhile, Melbourne’s luxury suburbs are centralised around Toorak and its inner-east neighbours, with the exception of bayside Brighton.
However, 22 billionaires from the Richest 250 list live in Toorak — more than any other suburb in the nation, The Australian reports. Toorak combines grandeur and discretion, making it the postcode of choice for captains of industry.
“We have a lot of returning expats who went to school in Melbourne and they appreciate the traditions our schools have, the rich history of the houses and the incredible renovations,” Case says. “For this, we are the best in the country.”
Toorak has demonstrated resilience. Toorak’s $5,159,279 house median is 5.1 per cent off the peak of its market, while Bellevue Hill is 9.4 per cent below its peak, according to Cotality data.
Bellevue Hill’s median has fallen 5.3 per cent in 12 months and flattened in the three months to July, while Toorak held steady annually and rose 0.7 per cent over the quarter.
Toorak also recorded a higher annual sales turnover compared to Bellevue Hill, Cotality figures reveal.
Case says discerning Melbourne buyers search an exclusive pool: Toorak, South Yarra, Armadale, Malvern, Malvern East, Hawthorn and East Melbourne. This market concentration, she says, sustains demand.
In the past year, sales above $5 million included five in East Melbourne, 14 in South Yarra, 20 in Malvern, 12 in Malvern East, 24 in Armadale and 36 in Hawthorn. Brighton, much larger by area, clocked 67 transactions.
Fifty-two properties of $5 million-plus sold in Toorak.
Case recalls a client from Rose Bay who was moving to Melbourne and, with $15 million to spend, was surprised by the small number of options he had.
“I drew up a list of properties for him to look at in Brighton, Toorak, East Melbourne, South Yarra, Hawthorn and Malvern,” she says. “He said to me, ‘is that it? If I was moving from Melbourne to Sydney, I would have 50 suburbs to choose from’.”
Although Melbourne buyers are presented with a tighter list, their money stretches a lot further than in Sydney, Case explains.
In suburbs such as Toorak, buyers can acquire immense blue-chip blocks for sums that Sydney cannot match.
“In Sydney, you're paying a lot more per square metre and for a smaller house, but inner-city Melbourne has particularly excellent value,” Case says. “You can buy a comparatively bigger parcel of land in Melbourne, ranging from 1000 to 2000 square metres, in a city that is much easier to navigate than Sydney.”
That ease extends to education. Melbourne has an elite schools belt - an attribute Sydney does not have.
“Another significant drawcard in Melbourne is the top schools,” Case says. “Families can select from Geelong Grammar in Toorak, Scotch College, Melbourne Grammar, St Kevin’s College, Xavier College or Camberwell Grammar, and still live close to all campuses.”
Continued price gains in Melbourne are forecast this year, fuelled by the expectation of more rate cuts, according to AMP senior economist Shane Oliver. “It's likely to be a solid spring selling season,” Oliver said in his September 1 report.
