Luxury $10 million-plus home sales doubled in two years, but a repeat looks unlikely

Luxury home sales reached new heights during the boom in both price and number of sales, but such results are becoming rarer in the cooling market.

Luxury sales doubled over the past two financial years. More than 1000 homes nationally sold for more than $10 million over the past two financial years, new analysis shows, double the volume of the previous two years, and almost 2550 luxury apartments sold for more than $3 million.

While luxury homes are not exempt from the downturn, industry figures say there are few homes for sale, which could put a floor under prestige prices.

Ray White Group chief economist Nerida Conisbee said extreme price growth and an influx of high-end home sellers, particularly downsizers, had pushed up the number of luxury home sales in recent years.

There were 561 houses sold for more than $10 million last financial year, up from 449 the previous year and 193 sales in the 2019-20 financial year, a Ray White analysis of national sales shows.

In the unit market, 1408 properties sold for more than $3 million over the year to June 30, compared to 1134 the previous year and 650 in 2019-20.

The median price for the top 1 per cent of the Australian property market jumped 9.9 per cent over the year to June, to $4.4 million, the analysis showed. That compares to annual growth of 17.5 per cent the previous financial year.

Sydney dominated the high-end sales, Conisbee said, but there was strength in regional luxury markets like the Southern Highlands, Mornington Peninsula and the Sunshine Coast.

“Melbourne was a little slower because prices didn’t move as quickly … because of lockdowns, but it now seems to be showing quite a lot of catch up,” she said.

Victoria’s house price record was smashed twice in one week last month. A knockdown-rebuild mansion in Toorak sold for more than $80 million, while another sold for almost $75 million.

While the luxury market across Australia was cooling, demand for rare homes would always outstrip supply, Conisbee said.

In Sydney, Mosman had the most sales above $10 million last financial year, at 38, followed by Vaucluse (36), Bellevue Hill (25), and Woollahra (17).

The highest sale in Sydney this year was by corporate lawyer John Landerer and his wife Michelle, whose Vaucluse mansion sold for more than $62 million.

In another standout sale, medical entrepreneur Dr Glenn Haifer paid more than $60 million for the Darling Point residence of Lisa Allen, former wife of yachtie Matt Allen.

The Agency’s Ben Collier said prices had soared after the first lockdown, due to strong demand, a lack of supply, and historically low interest rates. But there was a shift in the market late last year, as supply and expectations for rate rises increased.

“When rates started to climb we saw an immediate impact on the sub $5 million bracket … but as rates continued to climb we saw that spread into the sub-$10 million bracket and into the mid teens,” Collier said, but added the market shift had been followed by a drop in listings.

“People are thinking, I won’t choose to list my property now that the market is not as good …we are still seeing high levels of supply under $5 million, but when you’re talking about 10 plus, we’ve seen [the number of listings] drop, so prices have stabilised,” he said.

Pillinger’s Brad Pillinger said luxury home buyers were less affected, but not entirely immune, from rising rates and economic changes. He was still fielding solid demand from prestige buyers, but there was limited supply.

“There is just a lack of choice which then keeps prices up. I think the quantity of sales has decreased, I’m not sure about prices though,” he said.

In Melbourne, where the research set the luxury benchmark at $5 million, Brighton (67) had the most high-end sales, followed by Toorak (62) and Hawthorn (29).

Michael Armstrong, a partner at Jellis Craig Stonnington, said last year was the strongest market most agents had ever seen, and had been fuelled by cheap credit and people who had made money from equities and property.

Those dynamics had changed, but the luxury market was less affected by shifting rates or economic conditions. Most high-end homeowners were now sitting on their hands, resulting in a shortage of homes for sale, which was supporting prices.

Armstrong said prices in the $5 million to $10 million range had come back a little but not by the amount seen at other price points, as turnover was down so much.

“People aren’t willing to part from their trophy home in a down market,” he said.