_Now is the time to buy in Perth

This index enables investors and developers to monitor and compare the performance of prime residential prices across key global cities. Prime property is defined as the top 5% of the housing market; essentially the most desirable and expensive property in each city.

The index overall increased by 2.7% in the year to September 2018 – down from 2.9% the previous quarter (to June 2018). The decline in the overall index’s performance was due to a combination of uncertainty around Brexit, rising interest rates across major economies, a tighter regulatory environment, and the remnants of high supply in some markets. 

According to our Head of Residential Research, Australia Michelle Ciesielski, “In this quarter, all four Australian cities monitored in the Prime Global Cities Index rank in the top 25 for prime residential price growth over the year ending September 2018. Sydney, Brisbane and Melbourne sit above the global average annual prime residential price growth of 2.7%. Sydney ranks 17th (4% annual growth); Brisbane ranks 20th (3.5%); Melbourne sits in 21st place (2.8%), while Perth sits in 24th place with 2% annual growth."

Michelle Ciesielski continues to say, “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% 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% 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% - highlighting ongoing demand by ultra-high-net-worth-individuals.”  

Knight Frank’s Head of Residential, Australia Sarah Harding said, “The prime residential market often has a significant international bias in terms of buyer profile. Offshore interest in Australian prime residential property has remained steady over the past 18 months. Australia remains a highly attractive proposition for global wealth, and more recently with the stronger US dollar, money can go much further than one year ago. We have seen this with global investors as well as Australians currently based offshore when buying with US dollars.

There is still ever-growing demand from the global ultra-wealthy population to move their money into ‘safe-havens’ around the world and Australia is the third most-preferred global destination for emigration for the world’s wealthiest. However, foreign investment taxes introduced have encouraged more due diligence to be undertaken before transactions are made.”

According to the Head of Residential, WA Neil Kay, Perth’s prime market is seeing a swell in activity. “Now is the time to buy in Perth, with the volume of prime residential sales over the past 12 months priced between $3-10 million increasing by nearly 50% and taxes for foreign buyers to come into effect in January 2019.” Foreign purchasers are currently exempt from duty surcharges in Western Australia. However, the State Government is introducing a 7% Foreign Buyers Surcharge tax from 1 January 2019. This is a duty surcharge for foreign investors, payable in addition to general state-based transfer duties. 

Further international highlights of the report:

• Singapore is the city with the strongest rate of annual prime price growth 
• The price of a luxury property increased by 2.7% on average in the last year across 43 cities 
• San Francisco is the strongest performing city in North America 
• The index has grown 55.7% since its low in Q1 2009 
• 74% of cities registered an increased in prime prices year-on-year