Wealthy buyers snap up luxury homes at a rapid rate in 2022

Wealthy buyers have gone on a buying frenzy in 2022, with record-breaking sales in the luxury property market.

Luxury home sales are skyrocketing, largely thanks to homeowners’ built-up equity and savings over the Covid pandemic.

A record number of luxury houses have sold for more than $10m and apartments for more than $3m in 2022, according to real estate agency Ray White.

This is despite the median house price of the top 1 per cent of properties sold increasing by 10 per cent over the past 12 months.

Ray White’s chief economist Nerida Conisbee believes luxury sales have increased this year because banks are quite willing to lend to someone who has built up equity in their home as it makes them a safe borrower.

 

Conisbee says anyone who bought a property before 2020 or owned a property through the pandemic has done “very well” by building up a lot of equity in their home.

“If you’re in a suburb where the median went from even $3m to $5m and you owned a property there, suddenly you’ve got an extra $2m dollars of equity,” she says.

“Banks will (treat) you quite differently than someone that’s coming in as a first-time buyer that’s saved up $50,000 and then potentially borrowing money from their parents or relying on some sort of government assistance to get that loan.”

Sydney’s North Shore, particularly Mosman, has seen the largest amount of luxury home sales in 2022.

Other popular suburbs for more expensive estate sales include Toorak and Brighton in Melbourne, Dalkeith and Cottesloe in Perth, Torquay in regional Victoria and Hope Island on the Gold Coast.

However, Conisbee says there are not many luxury properties on the market, and if sales continue to rise, supply will begin to run out.

“We do expect to see a bit more of a shortage of properties available despite interest from buyers still remaining, not as strong as last year, but still remaining fairly solid,” she says.

“We still don’t have a tonne of really expensive properties in Australia, but at the same time, there’s certainly a lot of people that are in a good position to buy them.”

Conisbee predicts the luxury property market will begin to slow because as the whole market slows down, people will be hesitant to buy or sell, “sitting on their hands and watching and waiting”.

“There’s no way we’re going to see the same level of price growth as we saw in 2021. In any market,” she says.

“Luxury homeowners, if they’re not in a position where they need to sell, it’s probably a good time to hold as well.”