_Five Australian cities rank in the top 32 for luxury residential price growth globally
Despite maintaining its global ranking, Sydney has moved back into the top spot for Australia, while Melbourne has moved up the rankings one spot from the previous quarter.
The Gold Coast has been included in the Prime Global Cities Index for the first time in Q2 2019, reflecting stability and depth in the city’s established luxury home market, with a solid pipeline of new projects catered towards affluent local and interstate downsizers.
The Prime Global Cities Index – Q2 2019 found three Australian cities - Sydney, Melbourne and Brisbane - all recorded growth in luxury residential prices higher than the overall average annual prime price growth of 1.4% across the 46 global cities in the 12 months leading up to the end of June this year.
With early signs the Sydney and Melbourne luxury markets are strengthening, these markets have recorded sustainable yearly price growth of 2.5% and 2.1%, higher than the 2.4% and 1.8% recorded over the 12 months to March.
Brisbane recorded year-on-year growth of 2.2%, while the Gold Coast recorded growth of 1.1% and Perth recorded growth of 0.6%.
Knight Frank’s Head of Residential Research Australia Michelle Ciesielski said: “Prime property performance in Sydney is now in the sixth year of positive annual growth, averaging a remarkable 8.7% growth over this time. This outstrips the average of 1.8% recorded the six years prior. The Sydney prime market remains resilient at a healthy 2.5% growth per annum, being the best prestige performer in Australasia.”
The Prime Global Cities Index increased by 1.4% in the year to June 2019, up marginally from 1.3% in March 2019, but still significantly lower than its four year average of 3.8%, with slower prime price growth attributable to mounting economic headwinds. The index is expected to moderate further in the second half of 2019 before strengthening in 2020.
Policymakers around the world have cut interest rates to stimulate growth, with the RBA cutting Australia’s cash rate by 50 basis points since March to currently sit at 1%.
Knight Frank’s Head of Prestige Residential Deborah Cullen said: “Although the majority of our ultra-wealthy clients felt the local political and economic environment made it more difficult to create and protect their wealth over the past couple of years, 93% still report their wealth increased in 2018. According to our research, 76% of ultra-high-net-worth individuals (UHNWIs) expect their wealth to further increase by the end of 2019. One-third of the total wealth of Australian UHNWIs is allocated to the properties they live in (as first and second homes), and on average, they own three residential homes.”
In response to the growing demand for luxury real estate from UHNWIs across Australia, Knight Frank has recently strengthened its private client offering by expanding its Private Office to Australia.
Image: Sarah Harding and Kymbal Dunne
The newly formed Private Office, based in Sydney and led by Knight Frank joint national partners Sarah Harding and Kymbal Dunne, will offer a fully-integrated residential and commercial real estate advisory team, which will advise and transact for high-net-worth clients, family offices and their advisers.
Knight Frank has also recently expanded its Prestige Residential sales team, which is headed by Ms Cullen, with the addition of two highly experienced agents – Adam Ross and Oliver Stillman - to service the growing luxury market in Australia, with increasing buyer levels, particularly from expats.
Image: Richard Sholl, Lucia Liu, Oliver Stillman, Deborah Cullen and Adam Ross (clockwise)
The Knight Frank Prime Global Cities Index Q2 2019 found Berlin was the city with the strongest rate of annual price growth globally, recording a 12.7% 12-month increase. This was followed by Frankfurt (12%), Moscow (9.5%), Manila (6.2%) and Geneva (6%).