AUSTRALIAN prime residential markets have continued to grow in the last 12 months, with Perth, Brisbane and the Gold Coast leading the pack and with international borders remaining closed, the ultra-wealthy are expected to continue buying up real estate in the next few years.
According to Knight Frank’s Prime Global Cities Index for the first quarter, which follows the top 5% of the global residential market, Perth has seen the greatest level of growth in the past year at 4.1%.
Following Perth, Brisbane recorded a 3.8% growth, with the Gold Coast following closely behind at 3.5% growth.
Sydney and Melbourne saw a more subdued level of growth for the year, at a respective 1.9% and 0.4%.
“We have recently witnessed some incredible record sales at the very top end of the market, although when charting annually, the prime market price growth is coming off a much higher base than the mainstream market,” said Michelle Ciesielski, head of residential research at Knight Frank.
Global prime residential prices are surging ahead at their fastest rate since quarter four of 2017, growing in value by 4.6% in the past year.
Meanwhile Australia is experiencing a slower level of growth, compared to some cities which saw double-digit growth, such as Shenzhen in China which recorded a 19% year-on-year growth in prime prices.
“Although prime price growth is trending below the global average in Q1 2021, the five major Australian cities have reported positive annual growth every quarter since Q4 2017. When taking Perth out of the equation, the last time negative annual growth was recorded was further back in September 2013,” added Ciesielski.
Ranking-wise both Melbourne and Brisbane rose globally over the quarter, with Melbourne climbing from rank 29 to rank 27, while Brisbane rose from rank 22 to rank 21.
“Where responsible lending created pent-up demand in the mainstream market in late 2019, the prestige market with less reliance on finance to transact, saw sustainable continued growth through this time.”
“Fast-forward to 2021, more prestige property buyers are leveraging the low interest rate environment encouraging them to diversifying their portfolios with alternate assets,” said Ciesielski.
Sydney, Perth and the Gold Coast fell in the global rankings, from 24 to 25, 19 to 20 and 20 to 22 respectively.
“Although the mainstream market has recently seen an uplift in listings with most markets heating up, we’re still experiencing the prestige market being very tightly held,” said Shayne Harris, head of residential Australia at Knight Frank.
“With the Australian ultra-wealthy population likely to spend a second consecutive winter at home, this is only expected to drive stronger price growth as the year progresses. Lifestyle properties will remain hotly contested whether that be in the city or in regional areas, with many of our clients not looking to factor in travel abroad for at least the next few years,” concluded Harris.