_Australia's peak performer

Across the 20 global cities identified in The Knight Frank City Wealth Index 2019, based on wealth, investment and lifestyle, Sydney ranked in overall 8th place. When prime price performance was benchmarked over the past year to Q2 2019, Sydney (2.5%) was the strongest performer amongst the top 8 cities ranked on the City Wealth Index.

Over the past year, the slower prime price growth sweeping across the global cities is attributed to the mounting economic headwinds, and it’s expected to continue until the end of 2019 before strengthening in 2020. In saying this, in Q2 2019, an uptick was recorded in annual growth for Sydney, London, New York and Shanghai. 

Figure: Prime price performance of the top eight global cities on The Knight Frank Wealth Index over the past year. Annual capital growth, Q2 2018 to Q2 2019. (Chicago is based on mainstream data and for Q2 2019 is only available for May 19)

Source: Knight Frank Research, Toronto Real estate Board, StreetEasy, S&P CoreLogic Case-Shiller

Outlook 2020 

Sydney

Projected average annual growth of 3.9% in the Sydney millionaire population to 116,000 individuals, estimated to be 104,200 in 2020.

Ultra-wealthy population projected at 3.8% annually to 1,054 in 2023; being close to 950 in 2020.

Prime residential annual price forecast remains circa 2% by the end 2019, with a likelihood this could lift to 3% in 2020.

New supply pipeline of prime residential is currently limited, with some schemes delayed or converted to another use. 

Melbourne

Millionaires are projected to rise by 3.9% per annum to 68,900, by 2023. In 2020, there are estimated to be 61,800 millionaires living in Melbourne.

Annual growth of 3.8% is projected for the ultra-wealthy population to total 626 individuals, with 562 estimated in 2020.

Melbourne prime residential values are forecast to grow by 1% over the course of 2019, similarly forecast for 2020. 

Melbourne has experienced a number of prime luxury projects entering the market increasing competition at the top-end of the market, although so far, population growth has been supportive.

Brisbane

Brisbane millionaires are projected to increase by 4.0% per annum to total 32,000 in 2023; estimated at 28,650 in 2020.

The ultra-wealthy population is slightly lower at 3.8% annually to 2023. At this time there are expected to be 295 ultra-high-net-worth individuals, rising from 265 in 2020.

Brisbane prime prices have been forecast at 3% in 2019. This is likely to trend lower, to 1.5% in 2020, given alternate east coast cities are more attainable.

Most of the excess new apartments in Brisbane have been built for investors, although more owner occupier stock is in the pipeline—though only a slim portion of truly prime quality projects. 

Perth

Growth in the Perth-based millionaire population is the highest in Australia, at 4.1% per annum to 2023, to 42,100 individuals, and 37,600 in 2020.

Similarly, Perth has the highest growth projection of ultra-wealthy individuals set annually at 3.9% to 385 in 2023 and estimated at 345 in 2020. 

The annual forecast for Perth prime residential prices is 2% for 2019. With current market conditions, the resources sector ramping up, and only a handful of prestige projects in the pipeline, the 2020 outlook is likely to experience a similar performance.

Gold Coast

Prime residential price growth has been forecast at 2% by the end 2019, with a likelihood this could be sustained for another year in 2020.

Prime quality new apartments remains limited despite a growing downsizer population seeking this stock.