Why they’re buying: The global appeal of Australia’s trophy homes

If scarcity is the first lesson of economics, as the saying goes, then Australia’s trophy home market is a masterclass.

There are more buyers for the nation’s $10 million-plus properties than there are listings.

Agents say that, 20 years ago, buyers were mainly male Rich-Listers, with the exception of mining mogul Gina Rinehart. Now, it’s hip young entrepreneurs in e-commerce, retail and tech.

Of late, no expense has been spared.

China-born millennial Yan Zhang set the national property price record of $141.55 million in June when he paid cash for a multilevel penthouse at One Sydney Harbour.

The latest edition of Knight Frank’s The Wealth Report found that property is the number one luxury asset desired by the world’s richest 18 to 35-year-olds. It is a traditionalist approach to investment that proves the enduring appeal of parking hard-earned cash in high-end bricks and mortar.

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After all, where is the thrill in non-fungible tokens compared to winning the keys to one of the country’s best homes?

Just ask White Fox Boutique rag traders Georgia and Daniel Contos, who are in their early 30s and have amassed five Vaucluse, Sydney, mansions worth $150 million. Their last reported purchase was in April.

Or Matthew and Nicole Verrocchi, members of the Chemist Warehouse empire, who have quietly bought six adjacent houses in Melbourne’s Toorak for a combined $22.83 million, which council records show will be the site of a new build.

The number of foreign residential real estate approvals in Australia from January to September last year was 3750, the latest federal Treasury figures show.

China leads with $400 million worth of approvals, followed by Taiwan, Hong Kong, Vietnam and Indonesia at $100 million each.

The federal government has banned temporary visa holders and foreign-owned companies from buying established homes until 2027.

In an effort to boost new housing, they can still buy off-the-plan dwellings, but experts say there has been no off-the-plan rush due to construction costs and delays.

Adam Ross, associate director of prestige and international sales for McGrath, and a liaison to Knight Frank, says Australian expats returning from Hong Kong, Singapore, New York and London have been active this year.

“In the last 12 months, we’ve seen a spike in expat inquiry, and I would estimate that it’s up by as much as 50 per cent,” Ross says.

“The currency play is another aspect that’s driving international inquiry, because they get far more bang for their buck here.”

Tammy Soglanich, a Sydney-based buyers’ agent and co-founder of Aurum Advisory, meticulously plans inspections for her jet-set clients.

She conducts full-day tours around Sydney’s eastern suburbs and lower north shore. Buyers are taken through elite neighbourhoods to experience the beaches and weather.

“We pick them up at the airport, schedule the day, walk them through different homes, and also drive them through the suburbs, giving them a sense of the lifestyle that accompanies these properties,” Soglanich says.

Sydney’s harbourfront mansions are highly sought-after and belong in a category alongside houses around London’s Hyde Park and penthouses on Fifth Avenue in Manhattan, she says.

“There are always so many more buyers than what is available,” Soglanich says. “Our harbour is one of the most beautiful in the world. That view – you don’t have to be real estate savvy to know that’s prestigious real estate.”

Privacy and elite schools are also compelling factors.

Buyers will pay handsomely to swap family life in high-rise metropolises for large tracts on “triple-A streets” near schools, says Melbourne agent Sarah Case, director of RT Edgar Stonnington.

Ready-made, one-of-a-kind homes also have advantages. The brand-new, Agushi-designed 11 Kent Court, Toorak, sold in April, is one such address.

“It was magnificent and we had a huge number of high-net-worth buyers come through,” Case says. “They wanted something ready to go and set up for entertaining – wine cellar, home theatre, separate living spaces and beautiful gardens.”

Brisbane’s trophy-home market has entered a league of its own.

Such is its strength, owners don’t need to add improvements to reap colossal gains, says Ray White New Farm principal Matt Lancashire.

On Langside Road in Hamilton, a house sold by Lancashire for $8.7 million 12 months ago traded again this year for $12.5 million – untouched.

Ascot, Hamilton, Clayfield, New Farm, Bulimba, Hawthorne and Teneriffe are popular with moneyed buyers, with Ascot holding the $23 million city record.

However, the true depth of some markets may never be realised.

“There are houses in New Farm and Teneriffe that could surpass any of the sale prices that have ever been achieved in Brisbane, but they will never be for sale,” Lancashire says.