This article is from the Australian Property Journal archive
SYDNEY’S luxury residential properties have topped all Australian cities in price growth over the quarter and was the only market in the country to make the global top ten.
According to Knight Frank’s Prime Global Cities Index (PGCI) for Q3 2023, four Australian capital cities have made the top 15 global rankings for luxury residential price growth over the last year.
Sydney came in at number eight on the list out of 46 cities tracked worldwide, after recording a 4.2% increase in prime residential prices in the year to September and 0.5% for the quarter.
Three other Australian capitals made the rankings, with the Gold Coast at number 11 after 3.9% growth over the year, followed by Perth at number 12 up 3.8% and Brisbane just making the cut at number 15 after 2.5% growth.
Each of these cities surpassed the average annual price gross across the 46 markets, which came in at 2.1%. This average annual growth rate was the strongest since Q3 2022 and up from 1.6% in Q2 and 0.2% in Q1.
“The recovery in annual pricing, with 67% of cities seeing price rises over the past year, confirms that global housing markets are displaying signs of stabilisation, despite higher mortgage rates,” said Michelle Ciesielski, head of residential research at Knight Frank.
“While this is a positive sign, we note that only 63% of global markets saw an increase over the third quarter of this year, indicating lingering uncertainty, primarily due to the potential for further interest rate hikes.”
While not making the top 15, Melbourne came in at number 26 with 0.7% of growth.
Globally, Manilla topped the rankings after experiencing 21.2% growth in luxury residential prices over the last 12 months, followed by Dubai with 15.9% and Shanghai with 10.3%.
“Ongoing uncertainty over inflation and interest rate risks continues to weigh on all levels of the global housing market, including the luxury segment, and is likely to limit price growth in the medium term,” added Ciesielski.
“Globally, a more sustained upswing in demand and pricing will only be achieved once rates begin to move lower – which is unlikely to take place before mid 2024.”
Knight Frank is forecasting prime luxury home prices to increase by 3% by the end of the year, 4% in 2024 and 5% in 2025.
“Exceptional one-in-a-generation homes in the super-prime space are often selling swiftly off-market to ultra-wealthy clients who have been waiting years to upsize and, in many instances, achieving suburb records well beyond the $10 million threshold,” said Erin van Tuil, head of residential at Knight Frank.
“Although uncertainty remains in global markets, Australia tends to be insulated with our relatively smaller prime residential market and this resilience is likely to deliver a stronger price performance forecast for coming years.”
