This article is from the Australian Property Journal archive
Despite setting a new Australian record with a $150 million sale recently, luxury residential prices in Melbourne fell in 2024, while other Australian cities recorded annual price growth.
According to Knight Frank’s Prime International Residential Index (PIRI 100), Melbourne saw luxury residential prices fall at 1.9%.
Meanwhile, Perth saw the highest growth compared to other markets at 5.3%, similar to 5.2% recorded in 2023.
Brisbane followed suit at 4.1%, followed by the Gold Coast at 3.6% and Sydney at 1.1%.
PIRI 100 ranked Perth at 27th, Brisbane at 38th, the Gold Coast at 48th, Sydney at 67th, and Melbourne at 86th.
“While buyers of the luxury real estate are less reliant on financing, the RBA’s decision to reduce rates at their recent February meeting signals a change in the market towards greater stabilisation and a strengthening of the economy,” said Liam Bailey, global head of research at Knight Frank.
“However, we expect a moderation of price growth in Australian luxury property markets over 2025, in line with the mainstream market, due to factors including the federal election, ongoing geopolitical uncertainty and further interest rate cuts being unlikely until the second half of the year,” he added.
Last month former Essendon AFL club chairman and former Toll Holdings boss Paul Little and his wife, Jane Hansen, chancellor of the University of Melbourne sold their Toorak mansion Coonac, for $150 million, which smashed the previous Victoria record of $80,000,088 paid by Australia’s youngest billionaire, cryptocurrency casino founder Ed Craven for 29-31 St Georges Road which had sat vacant for more than 30 years.
The Coonac sale also set a new Australian record, ahead of billionaire Altassian co-founder Scott Farquhar’s Elaine at $130 million, which he had bought in 2017 from the Fairfax family for $71 million. That matched the $130 million he had paid at the end of 2022 for Point Piper’s Uig Lodge.
Meanwhile globally, prime residential prices remained upward in 2024 with a 3.6% growth rate, marginally up on the 3.3% rise in 2023.
Asian and Middle Eastern markets dominate the first six spots in the ranking with Seoul at 18.4%, Manilla at 17.9%, Dubai at 16.9%, Riyadh at 16.0%, Tokyo at 12.1%, and Jeddah at 9.6% leading the list.
Meanwhile, Australian cities remain cheaper for luxury residential property compared to other cities around the world.
According to Knight Frank’s The Wealth Report, US$1m will get you 45sq m in Sydney, up from 43 sq m a year earlier.
The same sum will buy 87 sq m in Melbourne, 102 sq m in Perth, and 114 sq m in Brisbane.
The Gold Coast is the most affordable market in Australia at 119sq m/US$1m.
“Australia’s prestige property has increasingly become more competitive on an international scale with the lower Australian dollar over the past year which is attracting expats to buy back home,” said Michelle Ciesielski, head of research at McGrath Estate Agents.
“For a local buying residential property with Australian dollars, prestige prices grew by 2.8% in 2024 across Australia.”
“However, analysis by McGrath Research shows that for a buyer using US dollars to purchase residential property, prices effectively were 6.6% cheaper over this time. This currency advantage was as much as 7.2% cheaper for those buying with Hong Kong dollars, 5.1% with the British pound and 3.6% with Singaporean dollars.”
In other international cities, US$1m will get 19 sq m in Monaco, 22 sq m in Hong Kong, 32 sq m in Singapore, 33 sq m in Geneva, 34 sq m in London as well as New York, and 37 sq m in Los Angeles.
Australia ranks 9th for the highest number of high-net-worth individuals (HNWIs) at 42,789 people.
Knight Frank defines HNWIs as those with more than US$10m in assets.
The number of UHNWIs globally increased by 4.4% in 2024, with the US and China still taking half of the share at 38.7% and 20.1% respectively.
In Australia, 31% of family offices surveyed reported that they would increase their portfolio allocation to direct real estate over the next 18 months, with 19% planning to reduce their allocation. This compares to 44% and 10% respectively globally.
Industrial (42%), data centres (21%), and infrastructure (18%) are the top three real estate sectors for future investments by wealthy investors.
