The luxury property markets of three Australian capital cities have so far proven to be immune to the effects of the wider market downturn, according to Knight Frank’s latest Global Cities Prime Index. The index, which tracks prime residential prices across 43 cities across the world, found four Australian cities monitored in the Index ranked in the top 25 for prime residential price growth over the year ending September 2018.
Sydney’s prime market grew 4 per cent over the year, followed by Brisbane (3.5 per cent), Melbourne (2.8 per cent), and Perth (2 per cent). Knight Frank’s Head of Residential Research, Australia Michelle Ciesielski said buyers in the top end of the market (defined as the top 5 per cent of the housing market; essentially the most desirable and expensive property in each city) have been less impacted by tighter lending practices.
“Despite a cooling mainstream market off the back of tighter lending practices, Australian prime markets continue to experience growth with buyers less impacted by these measures.
“In Perth, the volume of prime residential sales priced between $3-10 million has increased by 48.2 per cent in the year to June 2018 – highlighting the potential for price growth to follow. In saying this, off the back of a record year, in Sydney, the volume of prime sales has pulled back by 22.3 per cent over the year to June 2018.
“In the super-prime $10 million+ bracket, the volume of Sydney properties sold has reduced by just 2.6 per cent – highlighting ongoing demand by ultra-high-net-worth-individuals.”
The most recent figures from industry body the Real Estate Institute of Western Australia (REIWA) shows the median house price has lifted one per cent to $510,000 over the October quarter.
REIWA President Damian Collins said prices in Perth had started to strengthen after softening in winter following some particularly wet weather. “In a city renowned for its sunshine, the Perth market tends to slow during the cold winter months. Thankfully, we’re well into spring now which has translated into renewed enthusiasm in the market with more sellers listing their property for sale and prices improving,” Mr Collins said.
More sellers have returned to the market, with a 7.8 per cent increase in listing stock, which Mr Collins says is in line with this time of the year. “This is a seasonal trend that we’ve observed for a number of years now, even during the boom, with listings typically increasing in October and November as vendors become more motivated to sell in the lead up to Christmas,” Mr Collins said.
Source: The Real Estate Conversation