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Sydney's $32 Million Mansion Spared Death Row - For Now

As a chief powerbroker and former vice president of China, Zeng Qinghong is used to getting his way in the back rooms of Beijing. His son Zeng Wei, however, is finding it much more difficult getting his grand design through the local council of Sydney.

The younger Zeng and his wife Jiang Mei are currently locked in a bitter dispute with Sydney’s Woollahra council over the proposed multi-million dollar development of a harborside mansion in Point Piper. The property, also known as CRAIG Y MOR, was bought by the Zengs back in 2008 for a then-record price of A$32.4 million ($32.2 million).

CRAIG Y MOR, a luxury Sydney property sold in 2008 for a then-record price of A$32.4 million. The owners are now locked in dispute with the local planning council over renovation issues.
CNBC.com
CRAIG Y MOR, a luxury Sydney property sold in 2008 for a then-record price of A$32.4 million. The owners are now locked in dispute with the local planning council over renovation issues.

But Zeng’s ambitious plans to knock down the house and rebuild a more contemporary home - a five-storey house comprising eight bedrooms and an underground parking at a price tag of over $5 million - have hit a snag. The local planning authorities have rejected the application for the third time on the grounds the building is just too big.

The row highlights the vast sums of money Chinese investors are spending on the Australian residential property sector. Despite a surging Australian dollar, many mainland buyers are still heading down-under, armed with big ambitions and even bigger cheque books.

“There’s no doubt the Chinese buyers have definitely got money, but they’re also very astute buyers," said Ewan Morton, Managing Director of Sydney-based Morton and Morton Real Estate. Chinese buyers made up 16 percent of his sales last year, up from 5 percent in 2008.

“I think they’re attracted to us, because we offer great facilities to educate their children, and also because Australia is seen as a stable country and a safe place to put their money,” he added.

It is buyers like the Zengs who are fueling the the skyrocketing property prices in Sydney, which have hit dizzy heights especially in the luxury homes sector. Just last month, the exclusive Villa Vento in Point Piper was sold for a record price of A$52 million. Two other properties are currently in line for record deals: a top-floor penthouse overlooking Sydney’s Circular Quay is on sale with an asking price of A$30 million, which would be a record for an apartment in the city; while a small two-bedroom home overlooking Sydney’s Bondi Beach is asking for A$8 million, the highest "per-square meter" listing ever.

Even as the big bucks continue to flood the top-end of the market, it's back to the drawing board for the Zengs, who are likely to seek another court hearing, this time with the Land and Environment Court, to decide the fate of CRAIG Y MOR.