Price of prestigious Sydney and Paris real estate per metre nearly on a par: Knight Frank research

While $US1 million sounds like a lot, new research suggests in terms of prime real estate it buys you nearly the same in Sydney and Paris.

The world’s rich listers get more bang for their buck in Sydney and Melbourne compared to just six months ago, thanks to a global slowdown in prices and a weaker Australian dollar.

The research, by Knight Frank in its half-yearly wealth report update, compares what $US1 million ($1.4 million) buys around the world in terms of square metreage.

For that price, a well-heeled buyer would secure 50 square metres in Sydney, compared to 46 square metres in Paris – and just 16 square metres in Monaco, the world’s priciest market.

For millionaires who prefer to wear black and enjoy coffee, they would get 94 square metres in Melbourne.

The weaker Australian dollar and the slowdown in property prices has led to an increase in what the world’s wealthy can buy in Australia. Sydney now ranks eighth on Knight Frank’s global list and Melbourne is 13th, falling out of the top 10 thanks to strengthening markets in Tokyo and Berlin.

Brisbane and Perth improved after years of decline; Brisbane’s prime real estate market recorded 3.4 per cent annual growth and $US1 million would buy 122 square metres there. In Perth, it’s 129 square metres.

“It’s been a two-speed market for capital cities across Australia,” said Michelle Ciesielski, head of residential research in Australia at Knight Frank.

“We had seen a slowdown in the mining and resources boom coming and we’ve seen since a pick-up in the mining activity again. That’s not only been felt in the prestige residential market but also an improved office market take-up in those cities as well.”

Ms Ciesielski said fewer transactions in Sydney and Melbourne meant the rate of growth had slowed.

“The Sydney and Melbourne prime residential markets are coming off a number of years of double-digit growth to now record a healthier and more sustainable level of performance,” she said.

“While international buyers have cooled following increased purchasing costs, there remains strong inquiry and they are still transacting, but the process is taking much longer than we saw two years ago as they carry out their due diligence.”

She said the ultra-prestige market was dominated by expats, local entrepreneurs and downsizers and expected between 3 and 5 per cent price growth by year’s end in Melbourne and Sydney.

Demand would continue to increase because of growth in the numbers of millionaires arriving in, and being created in, Australia, she said.