Shock Aussie city where luxury homes are booming

The luxury property boom in this Aussie city is leaving all others in its wake but you probably haven’t heard much about it until now.

Prestige property in Perth and the Gold Coast recorded price growth above the global average in 2023, with the Asia Pacific being the strongest-performing region for global luxury real estate values.

The 2024 Wealth Report by Knight Frank reveals the Prime International Residential Index (PIRI 100), which measures price growth of the top 5 per cent of homes across 100 prestige property locations, rose by 3.1 per cent in 2023.

This represents a moderation following the pandemic boom in which prices rose by an average 5.2 per cent across these 100 cities in 2022 and 8.4 per cent growth in 2021. Still, 80 out of the 100 prime cities and lifestyle locations analysed recorded flat or positive price growth in 2023.

Luxury real estate is boom in Perth. Picture: RED M PHOTOGRAPHY

The PIRI 100 was led by Manila with 26 per cent growth, followed by Dubai with 16 per cent, The Bahamas with 15 per cent, Algarve in Portugal with 12 per cent and Cape Town in South Africa also at 12 per cent.

Australian cities making the PIRI 100 include Perth, in 28th spot, with prestige property values up 5.2 per cent in 2023, and the Gold Coast in equal 38th place with a 4.1 per cent price rise.

Factors pushing up prestige home values in Perth include strength in the mining industry, while the Gold Coast is benefiting from strong internal migration. Prestige buyers from Sydney and Melbourne are bringing big budgets to the Gold Coast after selling their homes in the southern cities.

Sydney was in equal 49th spot in the PIRI index, with prices rising 2.7 per cent, Brisbane was in 58th place with a 2.3 per cent price rise and Melbourne ranked equal 63rd with a 1.4 per cent gain.

Sydney’s luxury property price growth is stronger than all other capital cities except Perth.

LUXURY REAL ESTATE ‘STRONGEST IN 40 YEARS’

The prestige sector in Australia is as strong as I have seen it in 40 years. After the 2022 downturn, prestige property rebounded very strongly.

Some of the drivers have been baby boomers purchasing new homes, often without a mortgage, and high-net-worth clients continuing to invest their wealth in property. We’ve also seen the return of foreign investors in the prestige market.

A lack of homes for sale was the main reason for continued price growth across global prestige property markets last year.

We saw fewer sales but better prices in most locations.

Supply and demand was tightest in six cities – Sydney, London, New York, Dubai, Singapore and Hong Kong – where sales volumes were down by an average of 37 per cent in 2023 compared to 2022.

Knight Frank analysts predict an average growth rate of 2.5 per cent in 25 of the world’s most in-demand markets. These include Sydney with a forecast of 5 per cent growth in prestige home values this year and Melbourne with a forecast of 3 per cent growth.

How many sqm does US$1 million (A$1.5m) buy?

Here is a snapshot of what US $1 million buys across prime global cities and lifestyle locations.

•22 sqm in Hong Kong

•32 sqm in Singapore

•33 sqm in London

•34 sqm in New York

•38 sqm in Los Angeles

•40 sqm in Paris

Luxury real estate in Hong Kong is the world’s most expensive. Picture: Supplied by Christie's International Real Estate.

•42 sqm in Shanghai

•43 sqm in Sydney

•64 sqm in Tokyo

•112 sqm on the Gold Coast

*Source: Knight Frank Wealth Report 2024

Among the biggest prestige sales of 2024 so far is a grand waterfront family estate in Palm Beach, Florida that recently sold for $152 million.

In Australia, Aussie Home Loans Founder John Symond has just listed his waterfront home ‘Wingadal’ in prestigious Point Piper, Sydney with price expectations above $200 million.

* John McGrath is the founder, Managing Director and Chief Executive Officer of McGrath Estate Agents

Originally published as Shock Aussie city where luxury homes are booming