Australia’s Luxury Property Market Shines Amidst Global Slowdown

Australia’s luxury real estate market has outshone its global counterparts, demonstrating resilience in the face of rising interest rates that have dampened property markets worldwide. According to Sue Williams in her latest piece, “Australia’s luxury property market outperformed its international peers. Here’s how,” published in Frank Knight’s Prime Global Cities Index, luxury property prices in Australia have continued to rise across major cities, with Perth leading at a 3.7 percent increase over the past year.

Despite the global trend of slowing luxury property price growth, which fell from 4.1 percent to 2.6 percent annually, Australian cities like Sydney, Brisbane, and Melbourne have seen substantial growth. “Prices in Australian markets are still benefiting from the recommencement of migration after COVID,” states Liam Bailey, Knight Frank global head of research. He predicts a potential slowdown but remains optimistic due to possible interest rate cuts which could enhance affordability.

Elliott Placks, principal and managing director at Ray White Double Bay, emphasizes the strong international and expatriate interest in Sydney’s luxury properties. “Internationally, we’re seeing a strong interest in Sydney prestige property from Europe, Asia and also the expat community coming back,” Placks explains. He highlights the robust demand for Sydney’s trophy properties, noting their resilience against interest rate fluctuations.

Conversely, Melbourne’s luxury market has experienced a slight dip, showing a 0.2 percent decrease over the recent quarter. John Bongiorno, group sales director at Marshall White, points out that while Melbourne’s market is price-sensitive, it remains active due to strong foreign interest, especially from Asia. “The luxury property market in Melbourne is a tad price sensitive at the moment,” Bongiorno remarks, indicating a buyer’s advantage in the current climate.

Alan Oster, NAB chief economist, provides a broader economic perspective, suggesting that changes in land tax and rental regulations have impacted Melbourne’s market, whereas interstate migration continues to buoy Perth. As for future rate cuts, Oster believes these will be pivotal for the market’s direction. “We moved our forecast for a rate cut from November this year to May, which is probably, with hindsight, too far,” he states, highlighting the need to monitor economic indicators like unemployment and inflation closely.

Overall, Australia’s luxury property market’s endurance amidst a global slowdown paints a hopeful picture for investors and buyers, driven by continuous migration and strong international interest. As the world navigates economic uncertainties, the resilience of markets like Australia’s offers a beacon of stability in the tumultuous realm of real estate.

References:

https://www.domain.com.au/news/australias-luxury-property-market-outperformed-its-international-peers-heres-how-2-1314365/