The prestige property market can be a world unto itself, often running at different angles than broader market trends. One of Melbourne’s most notable prestige areas is the bayside suburb of Brighton and the wider Bayside area.
So what makes this area so in demand, what are people willing to pay, how has the market performed in relation to the broader property downturn, and where is it headed in the year ahead?
To find out, Jarrod McCabe sat down with Joel Fredman, who specialises in prestige property from $3 to $30 million across Brighton and Bayside.
Founding the Fredman Property Group (FPG) in 2019, Joel has successfully sold over $250,000,000 worth of real estate under FPG, with many of Brighton’s finest homes changing hands “off-market” with full discretion.
Tell us about your background, how did you get into focusing on the prestige market in the area?
There was always a bit of a natural progression towards property. Having grown up in the UK, Dad had a property business and mum was really into design and architecture. We loved checking out different properties in the city and across the country side. That passion continued when we moved over to Australia as a family. I’ve always had a love of fixtures and finishes and the way that homes make you feel. They create strong emotional connections. It’s one of those things, you just get hooked.
Tell us about the prestige market in Melbourne’s Bayside area, and what makes it unique compared to the city’s other prestige areas like Stonnington and Boroondara.
In Brighton and the Bayside area, there is just such a mixture of styles, of land sizes, of what is considered by the general market as A grade or B grade properties. In contrast, in Toorak, the renowned roads are blooming with great estates, huge amounts of land, unbelievable builds, with a real aura of wealth and prestige lining the streets.
In Brighton in particular, one street can be lovely, with fantastic period homes, but a lot of them might not be renovated. And then the next row contains beautiful modern builds, with a more luxurious feel. So it’s just quite scattered and inconsistent, with a larger division from the top to the bottom of the market.
Having said that, there’s an array of high standard, luxury properties out there. The area really connects with those that want the nicer things in life.
Is there a different type of buyer profile between the two prestige areas?
When you get up to the upper echelons, there is definitely a purely Toorak buyer versus a purely Brighton buyer. A lot of buyers in Brighton tend to be upgraders, climbing the Brighton ladder, so they’re going from a $5 million home, to $8 million, and then on to a $12 million property.
They get entrenched in Brighton. The kids go through school in the area, they are near the beach, and spoiled with beautiful shopping precincts. It’s where they want to be.
So, I’m dealing with the same buyers quite a lot, or people that they know.
COVID-19 had a massive impact on the property market more broadly, how did you find it in the Bayside area?
Considering how negative the energy was in terms of the living situation, there was a serious buoyancy in that upper end of the market.
They had access to funds and the means. Even if initially they didn’t have the real desire to make a change, people had to try and find something exciting and new for themselves.
So we were transacting more properties than ever. Properties in the seven million, eights, twelves and thirteens. People weren’t afraid to pay the right sort of money for them. At the same time, many vendors had become a little bored with their properties and wanted to cash out. So it was a really busy period for us.
At Wakelin we were also busy transacting throughout the period. We mainly deal with investment property, which can be a bit more dependent on market confidence. It’s fair to say the prestige homebuyer market often runs quite independently of market trends doesn’t it?
Yes, it’s so emotional. Particularly in the COVID period. Buyers wanted something new and were excited. They were happy to spend more, because they could see the value and quality in it. And the great news is, if you’re buying great real estate, you can’t lose from a long term value perspective. We were achieving great results and prices for our vendors, which we always do, so it was a win-win for everyone.
From the investment perspective, interest rates have definitely seen a cooling in the market, have you also seen impacts?
Yes, demand has dropped. I’ve noticed the number of genuine conversations with prospective buyers has dissipated into a lower level of genuine parties. Buyers are just delving into finding lower prices and are scared of paying too much. One minute, you think you’ve got three or four buyers for a house, then it dwindles down to one. The last few deals that we’ve done, we have managed to find the ideal buyer. But it has taken time and a lot of energy to work with the buyer to get them over the line.
For us, it’s a matter of really understanding buyers. Working out exactly what their criteria is, what’s important versus not important, their real budget, not their aspirational budget, and then trying to connect them with the right houses.
Where is the strongest demand coming from, given the softened market?
The most obvious buoyancy is coming from people wanting a finished home, ready to move into, with a good land component, garage, etc. We’re actually seeing the renovation market pick up, but at a reduced price point. That’s to do with the ongoing builder and materials shortages, buyers are weighing up time and costs. We’re also seeing people wanting to build brand new homes. We’ve had some people with budgets up to $20 million wanting land, some from the Toorak area, looking for better value for money. There’s also been more movement in the development space.
What are your expectations for the year ahead?
I think it’s going to continue on a supply versus demand basis. If the amount of listings picks up, I feel that hopefully the number of buyers I think will increase as well, which will provide more selection for everyone. If we do see some more stock, I think the prices will continue to waver.
If the stock continues to remain low, buyer demand will grow. I can sense buoyancy, especially in the top end of the market. The number of enquiries has been up more recently. There are people making genuine offers on properties. So I feel like that’s going to progress during the year. I’m really interested to see what kind of stock comes on to the market.
There are many people waiting for prices to drop, but at the end of the day quality properties will hold their prices. The odd one will sell cheaply, but that’s typically down to a compromise that’s quite obvious to the market. Anything that is desirable, is still holding really strong. We have a couple of houses selling off-market at the moment and have received offers that are at least 10% above market value in our opinion.
The final six months of last year compared to the first six were polar opposites. It was a tough transition for vendors and agents. It dropped off completely, and buyers, who were really fatigued, just disappeared. Everyone just wanted to get to Christmas and then reset. Certainly this year, I’ve seen confidence and momentum building and I think that will continue to grow throughout the year. So I’m actually quite excited by how the market is progressing.