Boomers putting J.A.T.O. bottle under wings of penthouse prices
LONDON: Boomers are putting a J.A.T.O. bottle under the wings of penthouse prices in most western cities.
Project marketers and valuers have tipped the average price of a Melbourne penthouse to double to $60,000 per square metre in the next few years as a growing cohort of wealthy downsizers seek secure residences offering the best views and the latest technology.
Even at that elevated price, a Melbourne penthouse will still be about 40 per cent cheaper than the top penthouses in Sydney, which have cracked the $100,000 per square metre in projects such as Lendlease’s One Sydney Harbour in Barangaroo.
“We wouldn’t be surprised to see prices double, making $60,000 per square metre the new norm,” said Chris Pulvirenti, director of valuations at real estate agents Savills.
“Buyers will need to adapt if they want the latest in design, amenities, and world-class views.”
The benchmark for a top penthouse in Melbourne is around $30,000 per sq m, though some, like developer Orchard Piper’s Toorak project, have achieved rates of close to $40,000 per sq m.
Penthouse buyers have all come from a “hyper local pool”, according to Orchard Piper director Luke McKie.
Penthouse sales that have hit the $30,000 per sq m benchmark recently, including a two-level penthouse in developer Benson’s Society project in Armadale, which sold for more than $17 million,
Also joining the $30,000 per sq m club was a consolidated apartment in Central Park, a development in Malvern East, which fetched $12 million, and luxury apartments in East Melbourne ($8 million) and Port Melbourne ($11 million) developed by Luxcon, led by Ilya Melnikoff, the nephew of Harry Triguboff.
Marshall White agent Leonard Teplin, who negotiated these sales, said Melbourne luxury apartments remained relatively affordable compared with other global cities.
“These sales are happening in our most desirable locations, with iconic views and the best amenities. In Sydney, this would cost $100,000-plus per square metre,” he said.
Mr Teplin said $100,000 per sq m “would happen” in Melbourne, tipping locations like 1 Spring Street at the top of the Melbourne CBD to reach that benchmark.
He said Melbourne developers had yet to embrace the use of international star architects as Sydney had done (One Sydney Harbour was designed by Renzo Piano) – but when they did, buyers would be willing to pay similar prices for the cache of a famous name.
“Melbourne is quite affordable when considering that Brisbane and Adelaide see similar results,” he said.
“Yet we have double the population, better infrastructure, world-leading events, and have long been named the world’s most liveable city. Melbourne’s best apartments should be worth much more.”
Driving the demand for penthouses and luxury apartments are the growing number of home owners selling their homes for more than $10 million – and not just in Toorak – and seeking a city bolthole.
“A lot more houses in places like East Melbourne are worth more than $10 million,” Mr Teplin said.
But to secure these downsizers as buyers, developers need to offer things like concierge services, private lifts, electric vehicle chargers, the latest all-electric appliances, and technology like keyless entry and home automation, he said.
The most expensive penthouse sold in Melbourne is the $39 million paid by entrepreneur Adrian Portelli for a 1200 sq m double-storey apartment in SP Setia’s Sapphire by the Gardens in the CBD. This equated to a rate of $32,500 a square metre.
In 2022, developer Beulah sold a 1000 sq m sub-penthouse in what will be Melbourne’s tallest building, STH BNK, for $35 million, or a rate of $35,000 per sq m.
