Orderly downturn sees $500,000 losses taken at Sydney top end residential
Big names, big losses. Imagine taking a $500,000 hit on your house resale.
That's the largest loss yet taken by Sydney sellers in the property market downturn now taking hold.
The $500,000 price woes are shared equally on a sale at Warrawee and Castle Cove.
Jerry Ren, the now bankrupt former oil and gas entrepreneur Jerry Ren took a $500,000 loss when Bremon, the Warrawee trophy home (top) sold recently for $11 million. The vast home, once dubbed the Chilton Hilton, had been bought by Ren, described as the Northern Territory's first billionaire, for $11.5 million eight years ago.
It was the Waitan Restaurant, Haymarket restauranteur Kai Meng who took a $500,000 loss on his Castle Cove home resale, selling off-market for $5.5 million (below).
The property had cost $6,006,666 in 2011. Ofcourse after other costs including $360,000 stamp duty on purchase and around $115,000 on estate agent commissions the total loss would have neared $1 million.
The grand six-bedroom residence, built in the late 1990s, is set on 2500 square metres of Neerim Road waterfront reserve. The Waitan Group’s windup has seen debts owed to the Australian Tax Office.
The property pain is emerging amid vendors across Sydney, although CoreLogic stress it is hitting the top end the most.
Values are down 8.6 percent amid the top percent of the market compared to a 4.6 percent drop amid the cheapest quartile.
The top nine known losses have seen prices fall by between 8.3 percent and 0.5 percent.
But lesser losses are emerging among the suburbs. Cricketer Nathan Lyon recently stumbled with a $15,000 Vaucluse apartment price drop.
Around 3 percent of Sydney house sales have been at a loss, in the last quarter survey by CoreLogic, and 3.5 percent of apartments.
CoreLogic first calculated Sydney prices were falling in September last year, with actual losses quickly following.
The downturn followed a five year period when prices peaked with some 78 percent growth.
In Sydney the declines over the past year has seen median home prices fall by around $70,000.
In percentage terms, the 7.4 percent annual dwelling decline in Sydney was the largest since February 1990.
"Sellers who are motivated and willing to meet the market essentially reset price points, so even if you’re a little stubborn as a seller and want to hold onto your price, unfortunately you are now at the mercy of others who are dropping prices to meet buyer demand," inner west agent Matt Hayson said.
"The market has certainly slipped faster than most forecast," agent Matt Hayson said, noting the recent 7.4 percent Sydney price decline data.
"It hasn’t been just the speed of the decline but also how far it has moved too.
"I think a few articles suggested we are back to 2016 prices but I’d suggest it’s 2015 prices already and continuing to drop," he said.
"Auctions are largely not working.
"I’m seeing more and more auction delays given the incredibly tough restrictions on pretty safe bet home loan applicants.
"If you place your property on the market, you’d want to prepare yourself mentally for a roller coaster and in most cases very weak feedback with the likelihood of one or maybe two buyers willing to make an offer."
Matt Hayson said homeowners who were selling recently purchased properties were in a vastly different position from those selling homes owned for decades.
“And for people who don’t own a home, it is a good chance to get into the market.”
“Remember 50 percent of Sydney properties have no buyers. The other 50 percent might have one buyer. That’s the reality,” Oddi said.
Charles Tarbey, chairman of Century 21 Australasia noted people taking losses in the current property market might be forced sellers, or parties looking to downsize or upsize.
"Taking a loss may not be a huge concern for some so long as they are buying in a market that has also experienced comparative declines in property prices.
"However, many markets are still experiencing property price growth so these groups should be conscious of that and look to do their research," Tarbey stressed.
Jade Guven, the wife of the property developer Savas Guven, sold her Bayview abode for a $450,000 loss.
Having paid $3.7 million, the luxury four bedroom home sold seven months later for $3.25 million.
At Clovelly fitness entrepreneur Jacinta McDonell, who co-founded Anytime Fitness in Australia, sold her Clovelly project for a $350,000 loss last month (below).“Pricing ethos has been mainly focused on finding a price in line with comparable sales.
"Now it’s about finding a price that ensured you will engage a reluctant buying market.”
A vacant block of land at Menai in the Sutherland Shire has sold for $955,000, going backwards on its sale last year.
The 818 sqm building block in Anderson Ridge, one of the Shire's new estates, fetched $980,000 in 2017.It took 111 days to sell, with the price revision to $1.02 million prompting a sale.
The block at 39 Anderson Place first sold for $640,000 in 2015 when bought from the developer.
Sydney's largest losses were in the 1990 recession when one Point Piper harbour front house fell from its record $11.5 million peak in 1987 back to $6.1 million and then $5.25 million over a five year period.
Terry Ryder at Hotspotting website says anyone who has owned for a few years will still be selling for a decent profit in Sydney.
"The only people taking losses in Sydney should be people who bought recently and, for whatever reason, need to sell in a hurry," Ryder advised.
This article was first published in the Saturday Daily Telegraph.
