Not long ago, selling a median-priced home in Dover Heights, Rose Bay, or Bellevue Hill was enough to secure a luxury apartment in the same area. However, for many downsizers today, transitioning to high-end apartment living comes with unexpected financial hurdles.
Many find themselves either priced out of the market or struggling to find apartments that meet their space, lifestyle, and location preferences. The rising cost of new developments, combined with shrinking living spaces, varying aspects, and limited prime locations, has made the decision even more difficult.
The Affordability Gap: Delayed Moves and Tough Decisions
This affordability gap has forced many downsizers to delay their transition, often leaving them in limbo for years. It is particularly disheartening for those in their mid-70s who wish to adjust their housing needs but face an increasingly expensive and competitive property market.
Market Shifts: Opportunities and Risks for Downsizers
While affordability remains a challenge, we are witnessing longer selling times and significant price reductions from developers on unsold apartments. This presents an opportunity for downsizers waiting for price corrections. However, it also raises concerns for buyers who purchased off-the-plan, as they may now see similar properties available at lower prices.
Upcoming Housing Policy Changes and Their Impact
Adding to the evolving landscape, the Low and Mid-Rise Housing Policy, effective from February 28, 2025, aims to increase housing diversity by allowing dual occupancies, terraces, townhouses, and apartment buildings up to six storeys in designated areas. While this policy is intended to improve housing supply, its impact on property values and market dynamics in Sydney’s Eastern Suburbs remains uncertain.
Three Distinct Tiers of the Sydney Eastern Suburbs Luxury Apartment Market
- Beachfront – The Ultra-Premium Market
Sydney’s beachfront properties attract high-net-worth buyers, international investors, and ultra-wealthy downsizers who see them as trophy assets. Offering unparalleled luxury, stunning ocean views, and world-class amenities, these properties command some of the highest prices in Australia.
True beachfront apartments along Campbell Parade, Notts Avenue, and Ramsgate Avenue in North Bondi fetch $80,000 to $100,000 per square meter.
Developments within walking distance to the beach along Hall Street, Glenayr Avenue, Curlewis Street, and Wellington Street sell for around $55,000 per square meter, attracting those who prioritize beachside living and convenience.
- Inner Eastern Suburbs – The High-End Downsizer Market (Bellevue Hill & Rose Bay)
This segment is driven primarily by local downsizers looking for luxury apartments close to cafes, shops, and everyday conveniences. Prestige, security, and a community-oriented lifestyle make Bellevue Hill and Rose Bay highly competitive downsizer markets.
Apartments in premium pockets of Bellevue Hill and Rose Bay range from $40,000 to $55,000 per square meter.
Highly sought-after locations in Rose Bay include Newcastle Street, Dover Road, Old South Head Road, Spencer Street, and Bononia Road.
In Bellevue Hill, O’Sullivan Road, Victoria Road, and Bellevue Road remain prime spots for downsizers.
- Double Bay – The Epitome of Luxury & Lifestyle
Double Bay has established itself as one of Sydney’s most exclusive harborside suburbs, attracting affluent downsizers, professionals, and international buyers seeking a sophisticated village atmosphere combined with waterfront luxury.
Prices in Double Bay range from $80,000 to $100,000 per square meter in top-tier locations.
High-end developments near Cross Street, Knox Street, and waterfront residences along the bay are particularly sought after.
Buyers pay a premium for Double Bay’s boutique shopping, fine dining, and harborside exclusivity, making it one of Sydney’s most tightly held real estate markets.
Why Are Prices So High? Key Cost Drivers in Sydney’s Eastern Suburbs
- Escalating Land Acquisition Costs
The scarcity of available land in these sought-after areas has significantly increased land prices. For example, property valuations in New South Wales surged nearly $1 trillion over the past five years, reaching almost $3 trillion in 2024.
Recent Land Transactions:
A consolidation of five houses on Dover Road, Rose Bay, resulted in a $75 million transaction, driven by new state government housing policies.
A 2,223 m² site at 5-13 Spencer Street, Rose Bay, was purchased for $28.5 million, designated for 12 boutique residences.
A 2,000 m² site at 10-12 Ian Street, Rose Bay, was acquired for $40 million, earmarked for high-end apartments.
- Rising Construction Expenses
Construction costs continue to escalate due to increasing material prices and labor shortages. Skilled tradespeople, such as bricklayers, now command high wages, with some earning over $250,000 annually.
According to Master Builders Australia, skilled labor wages have increased 26% over the past decade.
House building costs have surged 44% since the pandemic, further driving up apartment prices.
- Regulatory and Taxation Factors
Government taxes and charges add significantly to development costs. Around 38% of the total cost of a new apartment in Sydney stems from regulatory costs, infrastructure charges, and taxes.
Final Thoughts: Navigating the Market as a Downsizer
The luxury apartment market in Sydney’s Eastern Suburbs remains defined by record-breaking prices, rising demand, and a severe shortage of premium stock. Downsizers must proceed with caution, balancing market timing, financial planning, and lifestyle priorities to secure the right property at the right price.
With 35 years of real estate experience, I offer a comprehensive one-stop service that aligns both the purchase and sale of your property. Whether you’re looking for a seamless transition or expert guidance, I am here to help you make informed decisions in this ever-evolving market.
