Luxury property prices in Australia continue to remain strong, even as other global markets experience a slowdown due to rising interest rates impacting affordability.
According to Knight Frank’s latest Prime Global Cities Index, all four Australian cities analyzed showed growth in luxury residential property prices. Perth led with a 3.7% increase over the year to June, followed by Sydney with a 3.1% rise, Brisbane up 2.4%, and Melbourne with a modest 0.6% gain.
In contrast, the overall annual price growth for the top 5% of property markets globally slowed from 4.1% in the first quarter of 2024 to 2.6% by June. A quarter of the 44 cities tracked by the index saw negative growth during this period.
“Australian markets are still benefiting from the resumption of migration post-COVID,” said Liam Bailey, global head of research at Knight Frank, from London. He noted that similar trends of population growth are helping support property prices in other developed nations like Ireland and the US.
“However, we do expect a slowdown in luxury market price growth in Australia in the coming year, depending on factors like potential interest rate cuts and their impact on affordability.”
Globally, Perth ranked 14th in terms of growth, with Sydney at 18th, Brisbane at 20th, and Melbourne at 31st.
Manila in the Philippines topped the global list with a 26% rise, followed by Mumbai and Delhi in India, which saw increases of 13% and 10.6%, respectively. These cities, along with others like Dublin, Madrid, and Lisbon, have benefited from population growth and expanding middle classes.
Elliott Placks, principal and managing director of Ray White Double Bay, highlighted strong international interest as a key factor in the resilience of Australia’s luxury market.
“We’re seeing significant demand for Sydney’s prestige properties from buyers in Europe, Asia, and returning expatriates,” Placks said. “Many are attracted by Sydney’s views, large landholdings, and its reputation as a safe haven.”
He added that demand for “trophy properties” remains robust, particularly among wealthy individuals seeking tax-free assets in prime locations.
“This segment of the market is less affected by interest rates, with many buyers patiently waiting for the right opportunities to emerge.”