Australia’s most expensive suburbs, and luxury property’s 2024 prospects

Among cities ranked as the world’s best for annual prime property price growth, three in the top 12 are Australian.

Sydney comes out highest among the Australian cities, ranked eighth, with Perth (11th) and Brisbane (12th) also delivering world-class capital growth performance.

Knight Frank’s Prime Global Cities Index Q3 2023 tracked the movement of 46 luxury residential markets worldwide and found that in Sydney’s top end market prices grew 4.2 per cent, the Gold Coast, 3.9 per cent and Perth 3.8 per cent, over the past 12 months.

The top city, Philippines capital Manila, romped home with 21.2 per cent growth and nudged Dubai from the top spot it held for eight consecutive quarters.

Demand and short supply, and Q2 transactions are driving Australian markets to a better than anticipated price performance in the third quarter, says Erin van Tuil, Head of Residential, Knight Frank.

“The average length of time to sell a prestige home is generally taking longer across Australian cities, with more clients taking their time to consider their options for expanding their property portfolio despite very little home variety being available and given more luxury homes were listed for sale than we saw earlier in the year,” Ms van Tuil said.

“Exceptional one-in-a-generation homes in the super-prime space are often selling swiftly off-market to ultra-wealthy clients who have been waiting years to upsize and, in many instances, achieving suburb records well beyond the $10 million threshold.

“A smaller prime residential market tends to insulate Australia from global uncertainty and this resilience is likely to deliver a stronger price performance forecast for coming years,” she said.

Sydney’s ultra-wealthy suburbs booming

Within Australia, of the 12 suburbs that can boast median property prices above $5 million, all but one are in Sydney.

Richard Simeon, Principal, Simeon Partners, located in Neutral Bay, Sydney, told Australian Property Investor Magazine, sales in an aspirational suburb like Mosman are driven largely by increased competition from international buyers or from within the city, from Sydney’s East, West, the Upper North Shore and the Northern Beaches.

“International buyers are driving prices up and a lot are Chinese who compete to drive the price up, so, for example, I sold a property in Mosman recently for $9.2 million that was purchased for $4.95 million seven years ago - an 85 per cent gain over seven years; or there’s an apartment that was bought for $1.7 million ten years ago and sold recently for more than $5 million - a 300 per cent gain; and another house bought in 2016 for $9 million recently sold for $16.5 million.”

“I look at markets like the upper North Shore up around Killara, Lindfield, Turramurra, Warrawee, where there are good schools, like PLC, Knox, Barker; where buyers go to those areas for 4,000 square metre houses that were worth six or seven million and are now 12 or $13 million, and it’s amazing.

“Before Covid, I sold a property in 2020 and everyone thought the land value would go for $6.5-$7 million, and I sold it for $9.5 million, and when I was looking at research about Balmoral and sales there for $10-$12 million, there weren’t a lot, though many properties are worth more than that of course, but are not for sale; now we’re getting land value sales in Balmoral $11-$15 million, and buyers are then spending $7-$10 million on the build.

“There’s such a big increase of ultra-high net worth people that have decided to put so much more into the value of property, they’re concerned about buying the right asset, and that’s flowed down, and people are asking, is it going to keep going; well, I believe it is.”

Gold Coast joins property’s heavy hitters

Though not an Australian capital city, the inclusion of the Gold Coast for its 3.8 per cent annual prime property price growth in the Prime Global Cities Index, is not a surprise to Andrew Bell, CEO, Ray White Surfers Paradise.

“You’ve got to pinch yourself how quickly property values have grown, but it is the old story of real estate, which is about supply and demand, because that’s what pushes property values up, and demand just continues to be very strong for the Gold Coast across the board.

“The highest price paid for an apartment, which was just announced last week, was in Burleigh Heads for $24 million, and it’s not uncommon to be selling beachfront apartments for five to seven million dollars,” he told API Magazine.

Mr Bell said the largest volume of people moving to the Gold Coast are baby boomers retiring with wealth and it’s common to see them selling their properties in Sydney and Melbourne, then buying luxury Gold Coast properties for cash.

“Over the past year, in the suburbs of Broadbeach and Surfers Paradise, 25 per cent of all sales have been cash purchases, no finance, so we’ve really started to attract a very large pool of high wealth people here.”

Mr Bell says the Gold Coast’s appeal is due to city leadership in technology, education, industry and great weather, while it has also become a magnet for retirees.

“Surfers Paradise has now overtaken Mermaid Beach as the most expensive suburb on the Gulf Coast; it’s a billion-dollar-in-sales market.

“It’s also a clear indication that this has become a central platform for people who are loving inner city living, with proven restaurants and other entertainment facilities plus newer buildings are going up in the Gold Coast, along the beachfronts so we’re getting better high-quality buildings and people are drawn to these types of properties.”

Perth’s elite riverside suburbs set for growth

Eric Hartanto, Principal, Hartanto Properties, Perth, said prices in the Western Australian capital have been driven by robust population growth, a thriving mining sector, and burgeoning green energy industries, particularly in lithium, and all are contributing to economic prosperity and investment appeal.

Mr Hartanto identified Perth standout high-end suburbs with capital growth and investment potential as Applecross, South Perth, Dalkeith, Attadale, Nedlands, Mosman Park, noting all these areas are on the Swan River. 

“Waterfront homes or homes near the river or beach demonstrate the best price growth in Perth, and demand has been coming from a diverse range of buyers, but there is a notable influx of international interest, with Perth ranking among the top five destinations for property searches in Australia.

“That interest is particularly strong from the UK, New Zealand, the United States, Singapore, and Indonesia,” he said.

Even non-waterfront properties are seeing price growth and Mr Hartanto says an example of this is a four-bedroom, three-bath, three-car, 813sqm home in Winthrop, which he describes as the fastest-growing suburb in Western Australia.

“Winthrop recorded the highest price growth for houses, with its median increasing 25.3 per cent to $1.25 million and it’s increasingly popular among families seeking the balance of suburban tranquillity and convenience,” he said.

“The city has seen significant population growth, so investors should consider suburbs like Winthrop, where the market is booming and properties are selling rapidly, often before listing or within a short period on the market, and other high-demand areas such as Applecross, South Perth and Mount Pleasant,” Mr Hartanto said.