Luxury car collections, temperature-controlled wine cellars and sublime seasonal art displays are just some of the habits of affluent downsizers driving a surge in apartment sales worth more than $2 million.
A new report by global property consultant KnightFrank has thrown a light on the world of luxury downsizers who are dominating activity in the top five per cent of Australia’s residential market.
According to the report, luxury apartment downsizing is being driven by high net worth Australians seeking:
- A low-maintenance, high-quality home environment with house-like proportions for entertaining;
- A secured luxury apartment residence that can be easily locked-up and cared for when internal travel opens up again next year;
- The ability to access spacious and well-appointed communal facilities, with strata fees to maintain these facilities coming in lower than the maintenance and capital upkeep costs of a large prestige home;
- Safe single-level living in walking distance to shops and amenities;
- A quality city apartment to complement a new regional retreat purchased during the COVID-19 pandemic.
The report finds that the increase in demand from downsizers has resulted in developers building a higher proportion of three-bedroom apartments in their projects - from a 21 per cent apartment share in 2018 to 32 per cent today.
The report also finds that downsizers are behind a 36 per cent increase in prices for new prime apartments in major cities since 2015.
Prime apartments are defined as those valued at more than $3 million in Sydney and Melbourne and more than $2 million in Brisbane, Perth and the Gold Coast.
The report finds that downsizers are also very active in what are known as super-prime sales, defined as more than $10 million.
Habits of the ultra-rich downsizers
The report opens a window into the habits of downsizers snapping up these plus $10 million, super-prime apartments, which are in the top one per cent of property sales.
It says these downsizers buy and amalgamate multiple apartments in the pre-construction stage, so they can get around planning restrictions on carparking spaces in new projects to enable them to house their car collections.
“One potential buyer had every Ferrari model released since the 90s,” the report quotes Adam Ross, Associate Director at Knight Frank, as saying. “Another potential buyer had a wide collection of Ducati motor cycles.”
Mr Ross also said some developers around the world were forging ahead with apartments which even allowed buyers to showcase luxury collectables in their own homes.
“One concept which comes to mind is incorporating glass car lifts within the townhouse or apartment, which delivers the homeowners’ pride and joy into the living room,” he said.
Oliver Stillman, a sales executive at Knight Frank, said many clients buying ultra-prime apartments needed space for their wine.
“Recently, one of our clients who is an avid wine connoisseur, purchased an apartment in a prime location and before moving in, remodelled the whole kitchen to create a second pantry dedicated to storing his wine,” he said.
Mr Stillman said his clients would also opt for a custom-made refrigerated wine cabinet, to ensure their red wine collection was correctly stored around 14 degrees.
“Alternatively, if a bespoke private cellar is not feasible we are seeing more developments where the architect has designed a communal wine room for residents within the building,” he said.
In addition, according to William Laing, another Knight Frank sales executive, a growing trend is for downsizers to “rotate their art with each season in their new apartment”.
“They will often liaise with their art gallery of choice and/or curator who will provide storage solutions for them and will assist in rotating the works through the year,” he said.
Developers confirm trends
Apartment developers listed on Downsizing.com.au said the KnightFrank report highlighted some of the current trends they are seeing among buyers.
Akoya is a 40-unit apartment project specifically designed for downsizers at Greenwich on Sydney’s Lower North Shore. Its apartments range in price from $1.35 million for a one bedroom apartment, from $1.895 milion for a two bedroom apartment and between $2.75 million to $4.85 million for a three-bedroom apartment.
Tim Abbott, director and co-owner Ray White Projects Lower North Shore, said the KnightFrank report had correctly identified the strong demand for larger and more spacious apartments.
“The bigger apartments at the higher price ranges have been the most popular (in our project), which is a little bit different than I would have imagined it to be,” he said.
“It shows to me, a bit like identified in this report, that there are a large amount of affluent people who will downsize if they find the right thing.”
Akoya includes a private rooftop retreat with an infinity lap pool, a communal wine cellar, cafe, in-house bar, private library, theatre, golf simulator and office suites.
Mr Abbott said, as outlined in the KnightFrank report, some downsizers had amalgamated apartments and were also attracted to the fact they could benefit from high-quality facilities but share the maintenance costs.
Meanwhile, in Melbourne, Golden Age’s Sky Garden project at Glen Waverley has also been specifically designed to meet the needs of downsizers.
This project includes two-bedroom apartments starting from $668,000, and three-bedroom apartments from $1.118 million. All apartments are accompanied by car parking.
Dandan Zhao, the sales and marketing director at Golden Age Group, said the KnightFrank report had identified some key current downsizing trends.
"Demand for Sky Garden has soared during the pandemic as buyers’ priorities have shifted,” Ms Zhou said.
They are looking for developments with more open and outdoor space and as a result, our podium garden at Sky Garden has been a major drawcard.
“Residents can access 4,000sqm of outdoor space without having to venture far from their home, including outdoor gym equipment, sun lounges and BBQ facilities, as well as vegetable gardens and a children’s playground.
“Residents also have panoramic views via floor to ceiling windows, an abundance of amenities including a library and residents to lounge, which makes work from home a breeze, all while being conveniently located above a state-of-the-art shopping centre.
“We’ve had buyers who thought apartment living meant a compromised lifestyle but once they have experienced all that Sky Garden has to offer, this perspective has shifted; everything they need is within reach, it is instead a lifestyle of convenience and ease.”
FIND OUT MORE:
HEAR DOWNSIZING.COM.AU'S MARK SKELSEY DISCUSS THIS REPORT WITH KNIGHTFRANK'S MICHELLE CIESIELSKI