Toorak loses its stranglehold on Melbourne's top-end property market in 2012
For many years Toorak has been considered Melbourne’s most highly valued suburb, but it lost its stranglehold on that title in 2012. This year Toorak only managed one of the top five sales in Melbourne, with the balance been spread out across other blue-chip locations.
It's only a preliminary list, with some sales yet to make it onto official records.
This result is in stark contrast to the 2011 year when four out of the five most prestigious and valuable properties were located in the leafy Toorak streets.
If you were looking to buy Melbourne’s most expensive property this year located at 21 Kooyongkoot Road, Hawthorn (pictured below), you would have needed to have just over $12.5 million up your sleeve.
Kooyongkoot is an Aboriginal word meaning ‘the haunt of the wild fowl’, and although the wild fowl are no where to be seen, for this price you could have snapped up almost three-quarters of an acre on top of the highly sort after Scotch Hill. The property was sold to an overseas buyer in March and consists of a renovated Victorian mansion with tennis court and swimming pool.
While this sale was impressive it still falls a long way short of the 2009 record sale of Avon Court (pictured below), located at 18-20 Shakespear Grove, Hawthorn, which was sold to Autobarn boss Garry Dumbrell for a tad over $20 million.
From where I sat 2012 was a more consistent year across the broader market, with lower interest rates resulting in a small lift in buyer confidence, which is expected to continue into 2013.
However, this confidence was not as strong at the top end of the market. In 2011 the top five the top five sales accounted for over $67 million of real estate, compared with a touch over $50 million this year. Also the highest price sale of last year was $16.5 million, when 2 Linlithgow Road, Toorak (pictured below), was traded off market. In addition to the ivy-covered walls surrounding the 3,363-square-metre block of land, this property also comes with the standard mansion, swimming pool and tennis court.
Image from Google Maps
For those of us who had tighter cashflow pressures this year it may have been better to opted for the bottom end of the top five sales this year. For $7.7 million you could have snared 1,251-square-metre block of prime beachfront land at 43 Seacombe Grove, Brighton (pictured below). Although it does comes with a spectacular view of the beach, there is no tennis court or swimming pool, so you would need to dip further into your pocket get these.
For anyone who is looking to secure the highest-priced Melbourne home for 2013, here are some sobering figures for you. The average sale price of this year’s top five was just over $10 million. So to start with you need to get your hands on the $1 million deposit, which is not far off double the current median house price.
From there if you are looking to finance 80% of the property value you need to find close to half a million dollars of after-tax income a year just to keep pace with interest payments.
Something to think about as 2012 winds down and we start to make plans for 2013.
I hope you all have a great Christmas break.
Mark Armstrong is a director of iProperty Plan, which provides independent analysis and tailored advice to investors and home buyers.
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The current policy solves a short-term problem by creating jobs in the building sector, but in the long run it is likely to place young first home buyers under financial pressure.