Building on a Dream
Melbourne, get ready. The top end of the property market is about to explode and it’s all thanks to developers like Tim Gurner. Gurner’s glamorous projects, where penthouses sell for circa $30 million, are specifically aimed at the uber-wealthy or that modern-day acronym HNWI (high-net-worth individuals).
But don’t assume they are all international high rollers from Casino Royale. Since October last year, Gurner has sold 500 apartments worth $700 million and all have sold to local buyers. “We’re fully local and when I say local, I’m talking within a kilometre of the location of the site,” he says. “At Saint Moritz [in St Kilda] there’s not a single foreign purchaser in there. They’re all from Port Melbourne, Toorak, Brighton and East Melbourne, and in Collingwood [Victoria & Vine] all our high-end buyers there are moving from South Yarra through to the northern suburbs. We made a decision in the business five years ago that we wanted to create products that were very accepted in the local market.”
Sales to international buyers with deep pockets have risen in Australia’s property market over the past 15 years. A peak for offshore Chinese buyers, in particular, was in 2014-15 when their investment doubled, driven by steep wealth growth and a weak yuan. Melbourne’s booming real estate market made it a prime spot to park wealth for capital gain. In that period, China leapt ahead of the US for the first time as Australia’s number one foreign investor, and the dominance continued. Offshore appetite – from all corners of the globe – was surging, but times have changed. “You can go and set up a seminar in Shanghai or Beijing and sell 50 apartments in a weekend, so it’s probably an easier process,” Gurner says. “But we didn’t want to rely on overseas sales. We like our buyers to have seen our display suite, have met me, met our team, know the location and understand our product well.”
Another misconception, Gurner says, is that cashed-up downsizers make up a large portion of his customers. The real demand is from soon-to-be empty-nesters. “The biggest buyer isn’t the downsizer who is 60 to 70 years old, it’s the buyer in their early 50s who might have three kids,” he explains. “One’s 21 and left home, another’s 18 and about to leave home and the other’s 16 and two years off leaving. “They’re looking two to three years ahead saying, ‘We don’t want the big backyard any more, we want the three-bed, three-bath, guest room’ because it’s the perfect transition.”
Apartments are just in their infancy in Melbourne, we’re really just at the start of what is coming.
Apartment living, once a rarity, is now commonplace with one in 10 Australians occupying an apartment, according to the Australian Bureau of Statistics. The upper echelons of Melbourne’s home buyers are shifting away from owning a detached house to owning an apartment and with developers offering apartments of more than 500 square metres and hotel-like extras such as concierges and rooftop pools, it’s often a no-brainer. The rapid emergence of Melbourne’s luxury apartment segment has pushed prices to new heights. A seven-bedroom penthouse with a $30 million price tag at Gurner’s Saint Moritz, which is now under construction, sold in February this year, breaking the previous $25 million price record set by a penthouse at Southbank’s Australia 108. However, two other penthouses currently on the market – one on Clarendon Street, East Melbourne for $46 million and another at the Muse on St Kilda Road for $45 million – threaten to set new price thresholds for Melbourne.
Gurner, 37, has made a name for himself through his glitzy apartments where money is no object. That and avocados. In a much-publicised interview with 60 Minutes, the millionaire property mogul said people saving to enter the property market should stop buying “smashed avocado for $19 bucks and four coffees at $4 each”. It seemed half of Australia agreed and the other half vehemently did not, but the controversy is long in the past for Gurner, whose rise to real estate royalty has been meteoric. With an estimated wealth of $631 million, Gurner has come a long way from his days as a “go-fer boy” under his first boss, Tony Pride, at Wilson Pride in St Kilda. “I thought he was a nice kid from a nice family and an extremely hard worker,” Pride says. “You could tell early on that he was going to be a success in whatever he did.”
Gurner grew up in Kangaroo Ground, a bushy outer-suburb in Melbourne’s north-east. His first real taste for property design began while he watched his late father Colin Gurner, a structural and civil engineer, and mum Sandie de Wolf, the former chief executive of the child welfare charity Berry Street, renovate the family home and landscape the gardens.
After graduating from Carey Grammar, he studied a Bachelor of Business at RMIT. After trying his hand at the fitness industry, Gurner approached prominent Melbourne property developer Morry Schwartz. Like Pride, Schwartz became an important mentor. Gurner set up his self-titled property development company in 2013 with the strict aim of creating a luxury brand.’
Since then he has amassed 27 projects in the company portfolio, equating to 5500 apartments across Melbourne, Sydney and Brisbane. There are less risky and competitive industries to operate in, but Gurner says he lives for it. “It is incredibly brutal and without the love of the design and creativity, I definitely wouldn’t do it,” he says. “I am absolutely obsessed with design and creation, so when I’m not at work I’m on Pinterest or websites looking at the best of what’s happening because I’m obsessed with trying to create amazing spaces.” Amazing may be an understatement when considering the mind-blowing features at his latest developments.
At Saint Moritz on St Kilda’s famous Esplanade, Gurner’s most ambitious project yet, residents will have access to cryotherapy, a hyperbaric chamber and flotation tank, plus an on-call art curator, wine director, library curator, personal trainer, nurse, babysitters, a personal stylist and shopper, and a valet and private driver.
“The brief to myself and my design team was how to live the most aspirational life, so we threw around crazy ideas,” he says. “People said, ‘That’s never been done before’ and I’m like, ‘Great, what else? Let’s come up with the ultimate dream. Let’s do it.’ ” While the sheer level of wealth may seem unfathomable, Gurner remains resolutely aware of his privilege. This month he quietly donated the furniture in the Novotel hotel, which Saint Moritz will replace, to St Kilda’s Sacred Heart Mission. Sales of the assets have so far amassed more than $50,000.
Gurner says his work in the luxury property market has only just begun. “I don’t think we’ve even scratched the surface of luxury development,” he says. “Apartments are just in their infancy in Melbourne, we’re really just at the start of what is coming.”