Brisbane, Sydney, Melbourne, and Perth made it to the list of top 23 cities for luxury residential price growth across the world, according to the Knight Frank Prime Global Cities Index – Q1 2019.
Brisbane ranked 14th (3.2% annual growth)—and Sydney landed in the 18th spot with 2.4% annual growth. Melbourne ranked 22nd (1.8%), and Perth was in 23rd place (1.8%).
The Australian cities all recorded growth higher than the average annual prime price growth of 1.3% across 45 cities globally.
The overall index increase in the year to the first quarter in 2019 was the lowest average annual rate of growth since the fourth quarter of 2009 and was down from 1.8% in the previous quarter.
Over the past decade, the average rise in luxury prices has been 57.4%, according to the Knight Frank research.
Australia’s luxury residential markets, particularly the capital of New South Wales and Victoria, were expected to continue posting positive results going forward. The number of high-net-worth individuals – those with a net worth of more than US$1 million, excluding their primary residence – was forecasted to grow by 21% from 2018 to 2023 to reach a total of 116,049 in Sydney and 68,888 in Melbourne.
“Over the past five years, four millionaires were created every day in Sydney. This is expected to rise to 11 millionaires per day over the next five years. In Melbourne, we saw three millionaires created per day over the same period, with projections it will rise to seven millionaires a day over the next five years,” said Michelle Ciesielski, Knight Frank’s head of residential research Australia. “Perth’s millionaire numbers are expected to double from two per day over the past five years to four per day over the next five years, while for Brisbane the figures will triple from one to three millionaires being created every day over the same timeframe.”
The Knight Frank research found that majority of buyers in the luxury market across the country are not under the same pressures experienced by those in the mainstream market of minimal wage growth and restrictions on finance from the banks.
More people with more money are anticipated to purchase luxury residential property in Australia, according to Sarah Harding, Knight Frank partner & head of residential Australia.
“Sydney is continuing to see positive growth in the prestige market, with limited luxury properties suitable for high-end buyers. They’re looking not only for superb quality finishes, but smart technology and high levels of privacy within their luxury residences,” she said. “With competition for limited stock, we expect to see positive price growth for luxury homes, albeit at a more sustainable pace than in previous years.”
