Powered by MOMENTUM MEDIA
realestatebusiness logo
Subscribe to our newsletter SIGN UP

How does Aussie luxury market compare to Hollywood?

03 July 2017 Tim Neary
Aussie luxury market, houses, property market

Leading Aussie auctioneer and 2017 REB Awards finalist, James Pratt, shares his views on ultra-luxury real estate after returning from a working trip in Los Angeles.

Mr Pratt, who runs James Pratt Auctions, says he worked closely with some of America’s top real estate agents when he was in LA.

“I was very honoured to work with Sotheby’s Beverly Hills and alongside celebrity broker Tanya Stawski, who is rated in the top 2 per cent of all real estate brokers in the USA,” Mr Pratt said.

“It was also a bonus to spend time alongside the likes of Craig Shapiro from Coldwell Banker Beverly Hills, who is ranked within the top 1 per cent of Coldwell Banker agents in the United States."

Mr Pratt said selling celebrity properties in the US provided a “fresh perspective” on selling in unique markets.

“Some of the things I learned in Beverly Hills could also apply in places like Sydney’s Double Bay or Vaucluse, Melbourne’s Toorak or South Yarra, and even Brisbane’s Paddington or Wynnum Manly,” he said.

“For instance, luxury real estate has bigger capital gains, but the flipside of this is that there are also big falls in prices across a seven-year cycle.”

While the luxury market in Los Angeles is experiencing larger capital gains, this was not the case a few years ago.

“As an example, Tanya Stawski has a current listing at Mullholland Estates on the market for around $11 million, but only three years ago this same property was selling for around $7 million,” Mr Pratt said.

“This proves that you really need to get your timing right in the luxury market, probably more so than any other market, otherwise you can lose a lot of money.”

During his time in LA, Mr Pratt learned that luxury real estate is becoming more global.

“According to leading Chinese real estate portal Juwai, California has the highest number of Chinese buyers and this is certainly helping the market in Los Angeles,” he said.

“This is very similar to Sydney, which like Los Angeles is the capital for migration within the country.

High-rise

Mr Pratt also observed an uplift in certain segments of the market.

He said Los Angeles has not traditionally been a strong apartment-driven market. However, apartments are attracting overseas investors, which is in turn driving the sector.

“Again, this is similar to what we’re seeing in Australian cities such as Sydney, Melbourne and Brisbane,” Mr Pratt said.

“In addition, investors are realising excellent returns for apartments that are built near amenities, with one-bedroom apartments in Hollywood selling in excess of $900,000 because of its proximity to Hollywood and all the delights this area has to offer.”

Mr Pratt said large cities with strong economic growth continue to show excellent returns for investors.

“California is the fourth largest economy in the world, and from an investor’s point of view, this gives confidence to someone purchasing property in this part of the world,” he said.

“Los Angeles has the second highest economic growth in the USA and also the highest number of overseas investors in the USA.

“As a result, the prices for freestanding homes have doubled, with four-bedroom houses in West Hollywood, which previously sold in 2014 for $500,000, now selling for $1 million.”

“Compare this to somewhere like Sydney’s Double Bay, where homes which sold for $1.8 million in 2014 are now selling for $2.8 million to $3 million, and it’s obvious that the market in these major hubs is being driven by a combination of a strong economy and booming international interest.”

How does Aussie luxury market compare to Hollywood?
lawyersweekly logo
FROM THE WEB
Recommended by Spike Native Network

What is the worst mistake vendors make?

Price too high
Taking low offers too personally
Neglecting curb appeal
Not ‘staging’ the home for sale
Do you have an industry update?
REAL ESTATE BUSINESS NEWSLETTER
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.