_Sydney’s prime residential market soars to record highs
The Wealth Report Insight Series – June 2019 explores the evolution in pricing over the past five years in the prime residential market across 10 global cities, including Sydney, London, New York (Manhattan only), Miami, Hong Kong, Singapore, Shanghai, Berlin, Paris and Dubai.
Knight Frank defines prime property as the most desirable expensive property in a given location, generally defined as the top 5% of each market by value.
The report compares the average price per square metre and per square foot on a city-by-city basis for internal area, as well as presenting the top price achieved in each market over the 2014 to 2018 period.
The research found Sydney’s average prime price in 2018 was A$27,244* (US$19,179) per square metre, the highest recorded over the period – and highest held on record.
Knight Frank’s Head of Residential Research Australia Michelle Ciesielski, said the city’s average prime price had risen from A$18,903 (US$13,307) per square metre in 2014 and was up from A$26,413 ($US18,594) per square metre in 2017.
“Sydney ranked sixth for the average prime price in 2018, ahead of Shanghai (A$27,740 per square metre or US$17,417 per square metre), Berlin (A$17,866 per square metre or US$12,577 per square metre), Miami (A$15,296 per square metre or US$10,768 per square metre) and Dubai (A$9,559 per square metre or US$6,729 per square metre),” she said.
“Interestingly, Sydney also achieved its top residential price in 2018, at an estimated A$76,919 per square metre (US$54,149 per square metre), which was the fourth highest price achieved out of the 10 cities examined.
Image: Level 40, Darlinghurst, NSW
Knight Frank’s Partner and Head of Prestige Residential Deborah Cullen, said: “The Sydney super-prime luxury market has had three consecutive years where each year the top sale has smashed the previous year’s record.
“This continues to demonstrate there are only a handful of local exclusive super-prime properties available in Sydney for the growing ultra-wealthy and billionaire population, and competition for these rare properties is driving prices up.
“These types of buyers own multiple residential homes and are typically looking for ‘best in class’ or ‘one-only’ style properties with a particular focus on iconic Sydney harbourfront residences with panoramic views and waterfront access.”
Image: Crown Residences at One Barangaroo, NSW
Knight Frank’s Partner and Head of Residential Australia Sarah Harding said there were 43 billionaires last accounted for in Australia according to the Knight Frank’s The Wealth Report 2019.
“An exceptional rise of 30% was recorded in the number of Australian billionaires over the course of 2018, and this is projected to further rise by 14% over the next five years,” said Ms Harding.
“Australia is coming off a relatively low base, however since 2013 the number of billionaires has grown by 95% - outpacing the global average of 55%.”
Knight Frank’s The Wealth Report Insight Series – June 2019 found that in many cities the highest achieved price corresponds with the prime market overall reaching its peak, but there were exceptions, according to Ms Ciesielski.
“Across the 10 global cities surveyed, the differential between the prime average and top price achieved was just under 200 per cent,” she said.
“Over the past five years the gap has been the widest in Hong Kong, with a five-year average of 390 per cent, while the uplift was the lowest in Paris and Singapore, with five-year averages of 30 per cent and 39 per cent respectively.
“Sydney sits in the middle, with the premium uplift differential averaging 128 per cent over the five years from 2014 to 2018.”
Ms Harding said the report only analysed established prestige properties, and with more stock coming into the market the results could change.
“It’s very likely if we re-assessed in a few years’ time, this price differential gap could have widened further with super-prime product entering the market like we are now seeing being built at Crown Residences, One Barangaroo,” she said.
The Knight Frank The Wealth Report Insight Series – June 2019 found Hong Kong was the most expensive market with an average prime price of A$65,002 per square metre (US$45,760 per square metre) in 2018. However, analysis over a five-year period shows that the top price achieved in Hong Kong was in 2016 at A$430,483 per sq m (US$303,051 per sq m).
New York and London remain dominant ultra-prime markets, tussling for second and third place in the rankings for the average prime price.
London broke through the £10,000 per sq ft (A$194,753 per sq m or US$137,102 per sq m) price barrier with a price of over £11,00 per sq ft (over A$231,542 per sq m or over US$163,000 per sq m) in 2017, the second highest level of the 10 locations that year.
While relatively speaking Dubai remains the most affordable market with an average price of $9,559 per sq m (US$6,729 per sq m), just 15% of the average price in Hong Kong, it has nevertheless seen some of the highest price premiums. In 2014 one sale achieved $60,792 per sq m (US$42,796 per sq m), the fourth highest in any location included in the report that year.