The absence of foreign homebuyers due to the COVID-19 pandemic has not prevented the Australian prime property market from booming. In fact, Sydney is now the world’s top prime property market with prices rising 10 per cent as of June this year.
A Closer Look at Australia’s Prime Property Market
Crazy rich Australians, or those whose net-worth exceeds $30 million excluding their primary residence, have propped up the country’s property market. According to Michelle Ciesielski, partner, and head of residential research at Knight Frank Australia, “Every quarter since March 2013, Sydney’s prime residential market has recorded positive annual price growth, demonstrating the ongoing undersupply of luxury prestige homes being built whilst our ultra-wealthy population continues to rise.” Last year, an evident rise in the number of affluent Australians reached 11 per cent.
Knight Frank Australia defined prime properties as the most desirable and normally most expensive property in a defined location. The top 5 per cent of each market by value. By 2022, experts predict that Sydney is likely to share the top spot with London with property prices forecasted to rise 7 per cent for both cities in 2022.
Crazy Rich Australians Expand Their Portfolio Amidst the Pandemic
With the global health crisis, the need to secure future living spaces that provide a desirable lifestyle in their home country heightened among opulent locals.
Did you know that the average sale price in Sydney’s super-prime waterfront properties was $21.5 million in the year ending Q3 2020? Meanwhile, Brisbane followed with $17.6 million and Melbourne at $16.5 million. In the same timeframe, Perth’s average sale price was $13.4 million and Gold Coast was $12.7 million.
Overall, Perth saw the largest prime-price growth, up 4.1% year over year. Sydney and Melbourne registered an annual price growth of 1.9% and 0.4%, respectively. Annually, the acclaimed property consultancy said that there is a projected growth of approximately 3.8 per cent.
Predictions For the End of the Year And Beyond
Knight Frank Australia identified some factors that could boost or hinder Australia’s prime market’s growth in the next 12 months:
- Easing of travel restrictions
- Low stock levels
- Accrued savings
- Increased demand for healthier-built homes
- Increase in ultra-wealthy population
- Slow vaccine rollouts
- Higher taxes and cooling measures
- Rising interest rates
The growth of the Australian property market in the coming months will heavily depend on vaccine rollouts and easing of cross-border restrictions. Currently, experts predict that Australia’s prime property prices will rise by 7 per cent in 2022.