This article is from the Australian Property Journal archive
MORE than half of prestige home valuers expect price growth over the next 12 months, with the biggest gains to be seen in Western Australia, South Australia and NSW.
Local buyers and upgraders are the most active in the market according to CBRE’s Prestige Residential Valuer Insights for the September quarter, while downsizers and interstate purchasers are also active – developers and overseas purchasers less so.
A total of 40% of valuers reported demand for prestige property as “strong” to “very strong” in their local markets, while 51% reporting “moderate” demand. Demand is strongest overall in South Australia and Western Australia.
Valuers reported demand as being strongest for houses valued up to $10 million and those between $10 million to $20 million. A total of 54% of valuers expect house value growth over the next year – mostly in Western Australia, South Australia and NSW – and 17% of valuers are tipping growth of more than 5%.
Perth’s heated residential market recently recorded the highest price growth in the Australia’s luxury sphere, according to Knight Frank, outpacing the global average as affordability limits were reached and slowed down the market.
CBRE’s head of prestige valuations NSW, Bader Naaman said the strong prices that continue to be seen in the Sydney prestige market are underpinned by the combination of a continued lack of upper-end supply and the return of wealthy overseas purchasers as well as the strong appeal of Australia as a desirable destination in which to invest.
“Despite many of our valuers across the state expecting a slight increase in stock level across the next 12 months by way of listings, any increase in stock available is likely to be outweighed by the strong increase in demand we are witnessing for prestige properties within the $10 million to $20 million range.
“The resilience of the Sydney prestige market is largely impacted by the inherent scarcity of land across some of the city’s prestigious locations, desirable inner-city areas and waterfront property types have a finite supply,” Naaman added.
Just over half of valuers expect demand to remain the same in their local markets over the next 12 months, while 31% expect to see demand increase “slightly”. NSW and Western Australia are expected to see demand increase the most. A total of 88% of valuers in Victoria expect an increase in listings in the next year, while two-thirds of valuers in NSW also expect an increase.
CBRE’s head of prestige valuations Victoria, John Beresford said the market in Melbourne has shown stability and modest house price growth was expected in the coming year.
“The high-end metropolitan Melbourne market has been relatively stable over recent times, although there has been some seasonal softening in buyer demand and some price sensitivity, particularly in the $5 million to $10 million range.
“Notwithstanding, valuer expectations are for some modest house price growth in the broader premium housing market,” he said.
Growth expectations for penthouses and likely new home sites are neutral, with the latter still impacted by the recent spikes in building costs, although construction-cost price growth has stabilised, which “may again drive the desire for ‘dream home’ and speculative builds,” Beresford said.
In the prestige apartments market, 41% of valuers predict an increase in values in the next 12 months while 52% anticipate prices will remain stable.
Western Australia and South Australia will likely see the highest growth.
