By Alan Weiss, 35-Year Eastern Suburbs Real Estate Veteran
Sydney’s Eastern Suburbs are home to some of the most desirable—and now, overbuilt—luxury apartments in the country. The average 3-bedroom high-end apartment is fetching upwards of $6.5 million. Developers had been banking on deep-pocketed overseas buyers and downsizers from surrounding suburbs. But here’s the problem: demand hasn’t kept pace with construction.
I’ve been in this market for decades. I’ve seen the boom cycles, the panic, the prestige off-the-plan marketing campaigns. And right now, I’m seeing a clear disconnect between who developers think will buy these apartments… and who actually can.
Let’s talk about immigration—because that’s where many developers are looking for salvation.
Who’s Actually Moving to Australia?
In 2023–24, we welcomed over 446,000 net new migrants. On the surface, that sounds promising. But when you dig into the numbers, most of these arrivals aren’t luxury apartment buyers.
- International students? Over 200,000 of them arrived. They’re living in share houses, renting units, or crowding into purpose-built accommodation. They’re not buying $6.5 million penthouses.
- Skilled migrants? Around 137,000 came on skilled visas, mostly in their 20s and 30s. They’re highly employable, but most are renting or buying starter homes under $1.2 million—with a mortgage.
- Family reunion migrants? Roughly 52,500 arrivals. They may have support from family here, but again—unlikely to enter the prestige apartment market.
- New Zealanders and returning Australians? Yes, about 111,000 in total. A more diverse group, some with serious means. But even then, the ones with the cash are a small slice.
So who can afford a $6.5 million apartment?
The Investor Class: Small in Number, Not Always in Sydney
Only around 1,000 investor visa holders—those who must bring $2.5–$5 million+ into the country—entered under Australia’s investor migration streams. These individuals certainly can afford to buy in Sydney. But they don’t all settle here.
Many prefer Melbourne, Brisbane, or even regional investment zones where their capital stretches further or aligns with business interests. Even in Sydney, investor visa buyers are often focused on commercial real estate, or large freestanding homes in suburbs like Vaucluse, Mosman or Killara—not strata living.
And let’s talk buyer profile. These investor visa holders are typically 45–65, often with teenage or adult children. The idea of moving the family into a 3-bedroom apartment—after a life of detached living in Asia, Europe, or the Middle East—can be a hard sell.
Young Families and Luxury Units? Rarely a Match
Luxury apartments are often marketed as ideal for “upmarket families.” But let’s be realistic. Young families prefer backyards, space, and privacy. Even if they had $6.5 million to spend, they’re more likely to buy in Bellevue Hill, Woollahra, or Dover Heights, where land is king.
Luxury apartment living appeals more to:
- Older downsizers looking for convenience and views.
- Wealthy singles or couples without kids.
- Empty nesters seeking to stay in the East but shed the maintenance.
But there’s a problem: that market segment is small, selective, and already saturated with choice.
So Where Does This Leave Developers?
There’s an oversupply of luxury stock—especially in the $5M+ range. Immigration can’t and won’t absorb it.
The solution? Developers (and their marketers) need to wake up. Stop assuming a mythical overseas buyer will swoop in. Understand the actual demographics. Price more strategically. Offer adaptable layouts, not just marble and Miele.
As for sellers? If you’re sitting on a luxury apartment in a crowded market, you need strategy, not hope. Presentation, timing, and targeted negotiation are key.
I’ve been helping clients buy and sell prestige Eastern Suburbs properties for over 35 years. If you’re thinking about making a move—or wondering if your luxury apartment still fits today’s market—I’m here to help with the truth, not just the spin.
