Cashed up celebrities making big property moves can attract plenty of attention, but real estate experts say it could even push up home prices.
Call it star power, or the celeb factor, but the impact famous buyers have on real estate prices is undeniable according to seasoned property professionals.
Lloyd Edge, buyers agent and director of Aus Property Professionals said cashed up celebrities are prepared to pay top dollar, attract plenty of buzz around certain neighbourhoods and can create notable changes in a community.
“If someone famous moves into an area, people generally believe that if they too can get a piece of the same neighbourhood, then they’re moving up the rungs of society,“ he said.
“The thing is, it comes down to supply and demand with property – when a wave of people begin to go after a certain area for a particular reason, then prices start to head up.“
Byron Bay is the prime Australian example of how star power can push up prices, with the likes of Chris Hemsworth, Tones and I, as well as a sea of influencers moving into the region.
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Chris Hemsworth and Elsa Pataky built a mansion in the Byron Shire. Picture: Celeste Humphrey.
Hemsworth and his wife Elsa Pataky spent $7 million on a 4.2ha property in 2014, but after a mammoth makeover recent guesstimates have valued their compound to be worth as much as $60 million – far above the town’s current $37 million house price record.
“However there are other areas where this happens, like in Sydney’s Eastern Suburbs or Melbourne’s Brighton,” Mr Edge said.
“When it comes to certain suburbs of Sydney or Melbourne it can even be street specific because those in the know want to be in a particular part of a suburb.”
Chris’ Hemsworth and Elsa Pataky’s enormous Byron home could be worth as much as $60 million.
Mr Edge said the Midas touch of celebrities can create a domino effect that filters down the property ladder.
“For some potential buyers if they can live near a suburb that celebrities love then they feel they’re in the general vicinity of that star power,” he said, adding that in some circumstances it’s the neighbourhood that’s the famous personality.
Star power has helped put Byron Bay on the map as a magnet for celebrities and influencers. Picture: Getty
“When we look at a place like Bondi Beach – probably the most well-known beach in the world – that’s a celebrity within itself. Or Brighton in Melbourne has the same effect. They’re places that are on Instagram all the time. Even if it’s not the big name stars talking about them, influencers are creating the hype.”
Celebrity cachet might go a long way in upselling a neighbourhood, but high profile neighbours are used subtly in the selling process, said Michael Coombs of Atlas Lower North Shore.
“At an open home we might be able to mention that this celeb lives on the street, or that celeb is across the road but we’re not going to put it in the marketing material,” he said.
Property expert Lloyd Edge says some world-famous property hotspots such as Bondi Beach can be considered “a celebrity within itself”. Picture: Getty
“It’s a bit exciting, it creates intrigue and buyers may think if a celebrity wants to live there then it must be a good area.”
“It can be a justification for choosing a location – and it’s nice to live next to someone famous.”
“It’s not necessarily going to have a huge immediate impact on price, because celebrities generally want to buy in expensive areas anyway, but it’s more like another box ticked for the buyers.”
Both Zac Efron and Matt Damon inspected this Byron Bay property, which eventually sold for $22 million. Picture: realestate.com.au
He said he’d seen first hand how star power can cause FOMO among purchasers.
“Even before Covid I sold a property in Byron Bay at 35 Marine Pde which was a beautiful house in a prime spot,” he said. “We had had a few celebrities look at it, including Zac Efron and Matt Damon.”
“Word got out that one of them had purchased – even though they hadn’t – and that really had a big influence on the deal. Although the record in Byron at the time was $18m we ended up selling it for $22 million,” he said.
“International celebrities sort of put the Byron Bay area, and Sydney, on the map on a global scale especially during Covid. Around that time I had high profile people and their representatives ringing me from all around the world.”
Zac Efron was one of several international celebrities eyeing off Australian real estate in recent years, eventually buying a $2 million block of land in northern NSW. Picture: AAP Image/Ben Rushton
Ultimately, Mr Coombs said a VIP’s fame can be the ultimate unintended advertising campaign for a neighbourhood.
“Where they like to buy often gets a lot of media presence so buyers become aware of these nice areas they’re buying in,” he said.
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PropTrack senior economist Eleanor Creagh agreed that existing homeowners will get a financial boost from a famous neighbour.
“If home prices increase in a particular region, existing homeowners may benefit from the uplift in property values, offering opportunities for refinancing or selling at a higher price,” she said.
“Investors might also be drawn to the area, anticipating further increases in property values or the area becoming a more desirable locale, which may accelerate gentrification.”
Alternatively, the reverse is true for those who haven’t bought in before a celebrity.
Australian singer Tones and I is one of the many celebrities buying up real estate in the Byron region, and has also purchased properties on Victoria’s Mornington Peninsula. Picture: Getty
“For potential buyers, the rise in property values can make it more difficult to enter the market,” Ms Creagh said.
“In some regions as businesses cater to a new, possibly wealthier demographic, this may lead to changes in the types of services and amenities available, potentially driving up costs for existing residents as well as in some cases shifting the cultural fabric of a neighbourhood which may leave some feeling displaced.”
Mr Edge said while it may be alluring to be in a star’s orbit, buyers should keep their feet on the ground when house hunting in a celebrity stomping ground.
“The presence of celebrities can significantly increase the value of your property, but it’s essential to weigh the benefits against potential downsides, such as increased living costs,” he said.
“Navigating high-demand markets requires strategic planning and an understanding of market cycles. Buyers need to assess whether living in a high-profile area aligns with their personal and financial goals. The allure of celebrity neighbours should be balanced with practical considerations.”