Luxury homes market ‘stable’ with $10m sales ‘ticking along nicely’

Luxury house and apartment prices in the smaller capitals are still on the rise, while the Sydney and Melbourne markets are starting to stabilise.

A Hamptons-inspired estate in the riverside suburb of Hamilton in Brisbane is an affordable alternative for interstate buyers.

Prices at the top end of the Melbourne and Sydney property markets showed signs of stabilising at the start of this year, but luxury house and apartment prices in the smaller capitals continue to rise.

Prices for the top 10 per cent of the nation’s two largest markets slipped slightly over the March quarter, with CoreLogic figures revealing Sydney prices were down 0.3 per cent and Melbourne down 0.2 per cent.

While homes with asking prices over $50m may be struggling to move, Sydney Sotheby’s International Realty managing director Michael Pallier said the market is still ticking along nicely. His agency is selling a property over $10m “every few days”.

“The really high end is not really selling at the moment, that $50m-plus, there’s not much activity there. It’s a fickle market,” Mr Pallier said.

“But the $20m to $30m range is still doing really well. There is a lot of expats because of the way the dollar is performing, there’s local buyers, overseas buyers. It’s a combination.

“I’d probably say (the market is) stable. The luxury market is small and there is a small number of transactions that could distort things.”

Luxury property in Sydney and Melbourne shows signs of stabilising. Picture: NCA NewsWire / David Swift

While some of the summer heat has left the southern markets, top end markets in the smaller capitals are continuing to move from strength to strength after each experienced double digit growth over the year to March. Perth continues to be the strongest performer post-Covid boom, up 3.5 per cent through the March quarter, inching out Adelaide where prices were up 2.7 per cent.

Brisbane reported gains of 1.5 per cent over the period, which luxury agent Sarah Hackett chalked up to the significant pool of wealthy local and interstate business people looking to secure homes in the River City.

“The quality of buyers looking at the moment is the best I’ve seen,” said Ms Hackett, principal of Place New Farm

“There’s some significant business people under the radar that exist in Brisbane and are doing really well. Ms Hackett is currently marketing 19 Circe St in the Brisbane riverside suburb of Hamilton which is gaining traction with buyers.

The recently built Hamptons-inspired estate occupies a lot on Hamilton Hill, which offers a strong relative affordability to Sydney – which the agent says is still a huge plus for interstate buyers.

19 Circe Street, Hamilton.

CoreLogic economist Kaytlin Ezzy said the overall growth of luxury markets (up 7.8 per cent) has been weaker than the broader market (up 8.8 per cent) over the past year. While higher rates may not have a direct impact on every high-end buyer, Ms Ezzy said the impact of sentiment could be acting as a drag, which may begin to change if interest rates are cut as expected.

“The growing expectation that interest rates might remain higher for longer (may be) weighing negatively on consumer sentiment and reducing people’s appetite for making high-commitment decisions like purchasing a home,” she said.

“However, once we see a reduction in borrowing costs or a loosening in serviceability requirements, we could see the top decile to report stronger growth, with the more expensive end of the market historically showing more volatility throughout the growth cycle.”

Ms Hackett believes a drop in rates will renew a “flurry” of activity in the market.

“There’s not nine registered bidders per property at the moment,” she said.

“On average, you’re looking at three to five bidders, so it’s a really good time to buy because you’re seeing far less competition.

“It seems to be a more stable market. But, once interest rates do drop, there’ll be a little rush or a flurry again.”