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A basement bonanza could be the unexpected result of major tax changes, with wealthy Melburnians looking to invest in their family home where there is no tax.
A basement boom is on the cards for Melbourne’s elite homeowners as an unexpected result from Albanese government changes to property investment.
From karaoke and whiskey bars, to pools, reflective ponds, dedicated cigar smoking rooms and super-sized carparking to get expensive rides off the city’s streets, the desire for homes with sophisticated subterranean spaces is on the rise.
Architectural and building teams behind them have revealed high-end owners are increasingly seeking to maximise the value of their primary home, with real estate agents noting Australian government changes to investor taxes had been a catalyst for more buyers thinking that way — and others noting basement carparking had become a valuable security feature.
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Crypto casino billionaire Ed Craven is currently building a Toorak home expected to be worth about $150m once finished.
Its 3537sq m multi-level basement will come with an extraordinary list of features ranging from a dog wash and staff quarters through to a basement lounge, games room and even a basketball court.
And he’s not the only one going big as they look down.
The light court for a Brighton basement as part of the Sands project (a residential home) by Mckimm where landscaping goes below ground.
It might set you back more than $25m, but the basement at 26 Grange Rd, Toorak, is taking subterranean spaces to a whole new level.
High-end home builder Mckimm’s design director Lorenzo Garizio said in most cases it was clear their firm’s clients were investing in their primary home and he would not be surprised to see the federal tax changes make this more of a priority.
“I think I can definitely see this happening,” Mr Garizio said.
In many instances there were also physical motivations to go down as they looked to maximise the use of their land, were unable to build up high enough to get all the features into the home they wanted, or there were limitations on what else could be done with the block for environmental reasons.
The more prominent spots for them to be installed included Brighton, Toorak, Canterbury, Templestowe and Albert Park.
The added extras are increasingly varied, ranging from home theatres to reflective pools with water cascading down from an infinity edge pool above, cocktail lounge bars, karaoke rooms and DJ booths, whiskey bars paired with golf simulators and even hotel suites for visiting guests.
4 Bosc Court, Templestowe, has a billiards room, bar and media lounge all concealed below ground.
18 Hillcrest Ave, Kew, was built with a basement mancave complete with an underwater view to the home’s swimming pool.
And with hydronic heating and cooling systems in place, and even automated car washes, the spaces are clean and comfortable — and often now having landscaping added along descending driveways and into light courts that open to the sky above.
Sound attenuating infrastructure overhead also means what happens in the basement stays there — so the kids can have a party downstairs while mum and dad sleep upstairs.
Wellness is also a major driver, with basements often hosting gyms and yoga spaces supplemented by steam and sauna areas, ice bath stations and massage rooms.
“People are planning an area where their personal trainer can come to them,” Mr Garizio said.
Architect to Melbourne’s elite Nicholas Day said of the past 60 homes he had created in Toorak, 55 had a basement element.
Mr Day estimated he had created about 150 homes with basements in the past 25 years across the city, and in the future he’s expecting basements to get even bigger vertically.
Having recently done one with a 3.5m ceiling height, he said the impact of the added height was striking and left people entering it saying “wow”.
Ground works for the expansive basement of Ed Craven in Toorak. Picture: Wayne Taylor.
The basement at 9 Bendigo Ave, Elwood, comes with its own impressive bar space.
He’s even had one client request a double-storey entertainment basement where escalators take guests down into areas including a billiards room, bar and bowling alley.
The architect noted that a key part of the attraction was that it “upgrades the property from an okay property to a serious property”.
In the areas they are being built, that’s a distinction that can be worth millions.
Mr Day added that in many instances, as the garage did not require the same level of finish as the rest of the home, the basement level wasn’t much more expensive than above-ground floors — estimating it could be about 30 per cent of a build in many instances, depending what features the owner wanted.
There have also been instances where a basement or lower-ground floor had overcome a single-level covenant over a home, such as at 1 Ultimo Court, Toorak.
The residence is currently for sale via Marshall White’s Marcus Chiminello with an $11.95m asking price, and its lower-ground floor amenities include carparking for five, a cinema, den, a lift and three bedrooms — all with walk-in wardrobes and ensuites and access to one of the two below-ground court yards.
A house at 1 Ultimo Court, Toorak, currently seeking $11.95m has most of its bedrooms and a significant amount of living space on the lower-ground floor.
The home also has light courts dug into the block to give the spaces natural light as well as privacy.
While Mr Day said there were a growing list of reasons why Melbourne’s elite would want basements, the wider economic situation and surging building costs were turning some off.
Marshall White Group sales director John Bongiorno said basements were highly sought after, and that the complexities of what was going into the spaces was becoming “more and more sophisticated”.
Mr Bongiorno added that subterranean spaces were also being viewed as a way to give teenage kids independent space, but for most the primary appeal was basement carparking which could accommodate larger numbers of vehicles — and was being seen as a valuable security feature as a result.
The agent said their cost of inclusion seemed to run from $500,000 up to $10m, depending on the home, and that in most instances homes that featured one were coming to the market with $4m-$5m price points.
The basement at the $25m home at 26 Grange Rd, Toorak, also has space for refreshment.
Home cinemas are increasingly becoming a staple of the city’s basements, like this one in Kew.
“It’s maximising the site coverage and can help give the home more outdoor area above, as well,” he said.
In some instances the homes also used the basement to interact with other features, such as swimming pools with glass walls that allowed natural light into the basement space.
RT Edgar agent Mark Wridgway said for many the basement was a way of getting the full value out of the land in suburbs where it had become quite expensive.
“And we are starting to see people become more open to investing in the family home, in the last couple of months,” Mr Wridgway said.
“The May budget has certainly been a catalyst for it. I think it is the next big thing.
“But it’s not entirely just the government policies. And it has been coming for a while as land got more expensive.”
Mr Wridgway is currently selling a $23m-$25m home on Grange Rd, Toorak, where a semi-basement cut into the block’s slope is actually bigger than any of the three levels above it.
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Get a workout without the audience at this Brighton basement part of the Sands project (a residential home) by Mckimm.
Or get a sweat on in this basement workout zone where you can still step outside.
It hosts a “rock star garage” with dedicated lighting to turn it into a showroom for the owners’ favourite cars, a wine cellar, home cinema with a bar and a gym that opens out to a terrace cut down into the land around it.
“The ceiling heights are about three metres, and you actually don’t feel like you are in a basement,” he said.
Morrell and Koren buyer’s advocate to Melbourne’s top end Matthew Cleverdon said basements were a “great feature” and that between features like additional space and secure parking, they added a lot of value — with some buyers looking at them more closely since May.
“And for some buyers the basement has gone from a nice to have, to a must have,” Mr Cleverdon said.
But not every home can have a basement.
This Canterbury basement leaves philosophical questions about what the deep end really is when it comes to an underground swimming pool.
Some of the homes even come with more intriguing entrances to the basement level.
Mr Day said in most instances the line was drawn at Balwyn North where bigger block sizes made going below ground unnecessary.
Mr Garizio added that there were even scenarios where covenants prevented the extraction of soil from a property, effectively blocking basement digs.
In some instances construction means pumping out water from the site as they dig and build due to the water table being connected to the tides in Port Phillip Bay nearby.
In others, support piers are driven deep into the ground close together and even touching against each other to create the stability needed in sandy and even clay soils.
“It’s similar to how they built in Venice,” Mr Garizio said.
In Victoria, in most instances owners only own about 15.24m of the soil beneath their property, effectively capping the depth to which basements can go.
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