Sydney, Perth and Gold Coast top rankings for luxury property price growth: Knight Frank report

Five Australian cities have made an international ranking of the fastest-rising luxury housing markets in the world, despite the coronavirus pandemic.

Sydney’s top-end homes recorded 2.3 per cent annual price growth in the September quarter, the strongest luxury market in Australia and the 16th ranked in the world, according to the Knight Frank Prime Global Cities Index.

Perth posted 2.2 per cent prime property price growth to rank 17th on the list, followed by the Gold Coast at No.18 with 1.8 per cent growth.

Brisbane came in at No.23 with 1.1 per cent price growth for its top-end homes over the past year, and even virus-affected Melbourne recorded 0.3 per cent growth to rank at 26.

A surge in demand post-lockdown as luxury home owners re-evaluated where they wanted to live had supported sales and prices, Knight Frank head of residential research Michelle Ciesielski said.

“Once lockdown was eased, the prime property market was supported by an upward trajectory in the stock market, low interest rates and ultra-wealthy money which remained at home,” she said.

“Most of Australia was fortunate to ease out of restrictions in time to take advantage of the idyllic spring selling season. The thin number of prime properties on the market had great exposure to the ultra-wealthy population who would have otherwise been returning from a European vacation.”

The top-ranked global city was Auckland, with 12.9 per cent growth in its luxury market. The index measures price changes for the most expensive homes in each city, usually the top 5 per cent of each market.

Manila was second in the world at 10.2 per cent growth, followed by Shenzhen, Toronto, Seoul, Zurich, Vancouver, Los Angeles and Geneva, which all rose at least 6 per cent.

The report found countries that have managed the pandemic efficiently or were traditional safe havens have moved higher in the rankings, with demand mostly coming from locals while widespread international travel bans are in place.

It also found buyers are looking more favourably at luxury real estate while share markets remain volatile, mirroring the 2008 Global Financial Crisis.

Sydney buyers have been competing for grand homes, with a Bellevue Hill mansion fetching $16.08 million at auction this weekend and a Vaucluse house recently selling for $24.6 million at auction, smashing its reserve by $10.6 million.

A Gold Coast beachfront mansion traded for a jaw-dropping $25 million earlier this year, and south-east Queensland has been popular with southern buyers looking for a sea change.

Sydney Sotheby’s International Realty’s Michael Pallier has seen prices for some top-end Sydney homes rise 10 per cent in the past year amid a perfect storm of low interest rates, few homes for sale and a rush of demand from returning expats.

“There’s a number of people that were in London, Hong Kong, New York, that don’t want to be there any more,” he said.

“They’re going into winter now, so that’s the danger period [for the virus].”

He said the number of luxury Sydney homes for sale is at an “all-time low” as residents have retreated into their home, seeing it as their castle, and do not wish to move.

“There’s not as much stock and there’s more demand, so it’s pushing prices up,” he said.

Melbourne prestige buyer’s agent David Morrell said buyers were competing hard for homes in holiday hotspots as well as Melbourne’s leafy inner suburbs.

“We’re seeing in the upper end, in the past two weeks all these trophy homes are coming onto the market,” he said.

“The real hotspots are the areas like Portsea and Sorrento, holiday stuff that has gone up 15 to 20 per cent in the past two months.”

He said some in the market had been caught off-guard as they expected prices to fall during the recession, but instead low interest rates have been supporting prices.

He has also seen Melbourne buyers looking to purchase in Queensland, with its lower rates of COVID-19 cases and warm weather.

Three bidders competed for a sprawling estate in Melbourne’s Sandringham at auction this weekend, pushing the price to $5.25 million for the seller, actor Lisa McCune.

In a quieter deal, Anthony Deague of the family of property developers paid $14.75 million at a Zoom auction for a Toorak home sold by Rupert Murdoch’s nephew James Calvert-Jones.

A string of Toorak trophy homes are now for sale, including an Irving Road parcel asking $35 million to $38 million, a Clendon Road manor asking $18.5 million to $20.35 million and a modern residence on Myvore Court asking $23 million to $25 million.