Luxury home price growth soars

The pace of luxury home price growth in Melbourne and Sydney is among the world’s fastest.

Australian cities trailed Vancouver’s surging prestige market where prices rose 36.4 per cent for the year.

Melbourne and Sydney’s luxury homes turned in the fifth and sixth fastest pace of price growth among major world cities during the year to June, according to a new report.

Melbourne’s top end housing prices increased 11 per cent and Sydney prices rose 10.2 per cent for the 12 months, according to property group Knight Frank’s Prime Global Cities index released today.

However, the Australian cities trailed Vancouver’s surging prestige market where prices rose 36.4 per cent for the year, on the back of strong Chinese investment. Also ahead of the Australian market were Shanghai, where prices rose 22.5 per cent in the year to June, Cape Town with 16.1 per cent growth and Toronto where prices increased 12.6 per cent.

By region, the report which tracks the top 5 per cent of city housing markets, found Australia had the strongest price growth at 11 per cent, followed by North America at 10 per cent while Asia saw 4 per cent growth and prices in Europe rose 1 per cent for top end homes.

“While there continues to be global uncertainty, Australia is considered highly desirable for long-term wealth preservation,” according to Knight Franks residential research director Michelle Ciesielski.

“It also helps that Australia is highly ranked for lifestyle and well-placed for the education of future generations. This is despite the Foreign Investment Review Board (FIRB) application fees, as well as foreign investor duties and land tax surcharges in Sydney and Melbourne,” Ms Ciesielski said.

Of the 37 global cities tracked, New York, London, Paris, Moscow and Hong Kong saw luxury home prices fall.

The report noted that Vancouver was unlikely to retain the top spot with British Columbia Government introducing a 15 per cent tax for foreign buyers starting earlier this month.