Australia’s prestige property market finds its footing again
The nation’s luxury real estate sector is recalibrating, with Melbourne and Sydney regaining momentum, Perth remaining tightly held, and prime demand rebounding.
The chandelier never really flickers at the top end of town.
It may dim occasionally but Australia’s luxury housing market rarely goes dark.
In early 2026, the mood across the $5 million-plus segment is not exuberant, but nor is it subdued. Instead, it is deliberate, selective and increasingly defined by scarcity.
While the national median dwelling value rose 9.4 per cent over the past year, prestige markets are telling a more nuanced story.
Growth has been uneven, buyer pools are evolving and the geography of wealth has shifted since the pandemic boom.
Among the priciest suburbs in Australia in which to buy a house, all but top spot of the 20 best performing suburbs of the past year are in Sydney.
HOUSES: Top 20 suburbs (by highest percentage change in median values over 12 months)
| Rank | Suburb | Area (SA4) | Median value | Change in values 12 months | Annual change in values (5yrs) | Annual change in values (10yrs) |
|---|---|---|---|---|---|---|
| 1 | Peppermint Grove | Perth - Inner | $4,142,522 | 25.4% | 8.8% | 4.4% |
| 2 | Clovelly | Sydney - Eastern Suburbs | $5,250,468 | 14.9% | 8.9% | 7.7% |
| 3 | Bronte | Sydney - Eastern Suburbs | $6,244,649 | 13.7% | 6.2% | 7.1% |
| 4 | Coogee | Sydney - Eastern Suburbs | $4,740,468 | 13.6% | 8.1% | 7.5% |
| 5 | Bellevue Hill | Sydney - Eastern Suburbs | $11,860,787 | 13.6% | 9.3% | 8.7% |
| 6 | Waverley | Sydney - Eastern Suburbs | $4,376,508 | 13.4% | 4.6% | 5.5% |
| 7 | Bondi Beach | Sydney - Eastern Suburbs | $4,692,698 | 12.0% | 6.5% | 8.6% |
| 8 | Double Bay | Sydney - Eastern Suburbs | $7,464,601 | 11.8% | 5.6% | 6.1% |
| 9 | North Bondi | Sydney - Eastern Suburbs | $5,102,365 | 10.4% | 7.1% | 8.2% |
| 10 | Balgowlah Heights | Sydney - Northern Beaches | $4,742,172 | 9.8% | 6.8% | 6.7% |
| 11 | Vaucluse | Sydney - Eastern Suburbs | $10,085,684 | 9.7% | 7.3% | 7.8% |
| 12 | Strathfield | Sydney - Inner West | $4,160,631 | 9.7% | 9.6% | 5.8% |
| 13 | South Coogee | Sydney - Eastern Suburbs | $4,531,210 | 9.3% | 6.1% | 6.3% |
| 14 | Woollahra | Sydney - Eastern Suburbs | $5,223,596 | 8.8% | 6.2% | 7.0% |
| 15 | Queens Park | Sydney - Eastern Suburbs | $4,322,131 | 6.3% | 4.5% | 6.1% |
| 16 | Bondi | Sydney - Eastern Suburbs | $4,787,909 | 5.1% | 5.6% | 7.0% |
| 17 | Fairlight | Sydney - Northern Beaches | $4,081,216 | 4.6% | 6.9% | 7.5% |
| 18 | Rose Bay | Sydney - Eastern Suburbs | $6,948,819 | 3.7% | 6.8% | 6.7% |
| 19 | Dover Heights | Sydney - Eastern Suburbs | $6,586,371 | 2.8% | 6.8% | 7.1% |
| 20 | Cremorne | Sydney - North & Hornsby | $4,102,573 | 1.3% | 1.9% | 4.3% |
Data source: Cotality (exclusive to API Magazine). About the data: Median values refers to the middle of valuations observed in the region. Only metrics with a minimum of 20 sales observations and a low standard error on the median valuation have been included. Data to 31 January 2026.
Melbourne: scarcity, certainty and a younger buyer
In Melbourne, the upper echelon is holding firm.
Mitch Armstrong, CEO of Sotheby’s International Realty Melbourne, says the city’s $5 million-plus market has maintained value through scarcity and depth of demand, though annual growth is tracking just behind the national figure.
“Melbourne’s prime property market has been holding its value via scarcity and depth of buyer demand,” he told API Magazine.
“The year-on-year growth rate across the luxury cohort would be just behind the national because Melbourne’s buyers are more quality selective.”
Over the past 12 months, he has observed a notable shift in buyer profile.
“We are seeing younger wealth entering the top end, particularly tech-aligned wealth, influencing what is being built and bought,” Mr Armstrong said.
“International and expat demand is still present across prestige markets, and we are observing an incremental lift in internationally connected buyer pools re-engaging in blue-chip suburbs.”
At this level, he added, “demand remains dominant in how decisions are made, with wealth and lifestyle drivers outweighing rate sensitivity and market cycles”.
Turnkey quality is paramount.
“Best-in-class renovations or new-build outcomes are seeing the greatest demand,” he said.
“The premium is commanded for certainty, speed and finish quality.”
Secure garaging and high-security features are increasingly non-negotiable. By contrast, “renovation potential is less sought-after, given the uncertainty around cost and time to restore for those less experienced in renovating”.
Mr Armstrong points to Toorak as “still the flagship for trophy land and generational stock”, alongside Armadale, Malvern, Kooyong and Brighton, where scarcity and school catchments continue to underpin values.
Kew, Canterbury and Hawthorn remain tightly held family markets, while Albert Park and Middle Park offer “a rare CBD-plus-beach adjacency” that supports medium-term growth.
Perth: limited stock, lifestyle moves
In Western Australia, the story is less about exuberance and more about supply.
Meryl Carter, Licensee at Meryl Carter Luxury Real Estate Sales, says the luxury market has held tight somewhat since last September, largely because vendors are struggling to buy a replacement home.
“People cannot sell and then buy as there is little to no stock,” she said, echoing a trend in the wider, white-hot Perth market.
“There are only about 900 homes in WA at the moment in this higher-end market.”
That scarcity is reshaping transaction behaviour.
“Some buyers will use bridging finance if they find the perfect property,” Carter says, underscoring how tightly held prime assets have become.
Unlike Melbourne, the buyer demographic in Perth has not shifted markedly.
“Buyers are mainly downsizers moving from very large coastal homes to riverfront apartments,” she told API Magazine.
“There are very few overseas buyers because of the additional foreign buyers taxes.”
Design continues to be a key differentiator.
“Well-designed floorplans attract a premium from buyers, particularly on the waterfront,” Ms Carter said.
“In Applecross, South Perth, Nedlands, Dalkeith, Mosman Park, Cottesloe and Peppermint Grove, larger blocks with fantastic views and outlook will attract a premier rate per square metre.”
Inner-city suburbs such as North Perth, East Perth, Leederville and West Leederville are also showing strong growth at lower price points, offering what Ms Carter described as “greater value for money” relative to traditional blue-chip enclaves.
A market rebalanced
Five years ago, luxury housing was largely concentrated in Sydney and Melbourne.
Ray White Group’s Senior Data Analyst, Atom Go Tian, noted that the pandemic accelerated lifestyle migration, with affluent buyers “flocking away to where luxury was still sold at a discount”.
Brisbane, Perth, Adelaide and the Gold Coast posted significantly stronger five-year luxury growth than Sydney and Melbourne. The Sunshine Coast and Gold Coast even overtook Melbourne in average luxury house prices during the cycle.
Yet the relative discount has narrowed. Sydney’s premium over Queensland markets has compressed materially, and Melbourne’s comparatively modest 17 per cent five-year growth suggests potential catch-up if sentiment improves.
Sydney unit markets and the global context
International data reinforces the resilience of Australia’s top end.
In the December quarter of 2025, Sydney recorded 52 residential sales above US$10 million, a 58 per cent increase on the previous quarter, according to Knight Frank.
Across 2025, the city logged 131 such transactions, totalling $2.355 billion.
The result placed Sydney fifth globally for super-prime sales in the quarter, ahead of Miami, London and Paris.
Knight Frank reported 555 US$10 million-plus sales across 12 major global markets in the December quarter alone, signalling renewed momentum among ultra-high-net-worth buyers worldwide.
The 20 most expensive unit markets in Australia are all in Sydney, but their capital growth performance over the past 12 months was decidedly mixed, with half in negative territory.
UNITS: Top 20 suburbs (by highest percentage change in median values over 12 months)
| Rank | Suburb | Area (SA4) | Median value | Change in values 12 months | Annual change in values (5yrs) | Annual change in values (10yrs) |
|---|---|---|---|---|---|---|
| 1 | Clovelly | Sydney - Eastern Suburbs | $1,830,000 | 13.4% | 5.4% | 5.1% |
| 2 | Birchgrove | Sydney - Inner West | $1,732,503 | 10.1% | 5.6% | 2.9% |
| 3 | Rozelle | Sydney - Inner West | $1,622,091 | 10.1% | 4.7% | 2.8% |
| 4 | Coogee | Sydney - Eastern Suburbs | $1,618,112 | 10.1% | 6.0% | 4.8% |
| 5 | Manly | Sydney - Northern Beaches | $1,873,895 | 4.6% | 4.5% | 4.0% |
| 6 | Tamarama | Sydney - Eastern Suburbs | $2,025,344 | 3.5% | 6.0% | 5.6% |
| 7 | Fairlight | Sydney - Northern Beaches | $1,843,440 | 3.5% | 5.4% | 4.4% |
| 8 | Double Bay | Sydney - Eastern Suburbs | $1,916,701 | 0.8% | 4.3% | 3.7% |
| 9 | Bronte | Sydney - Eastern Suburbs | $1,745,220 | 0.6% | 4.7% | 4.8% |
| 10 | North Bondi | Sydney - Eastern Suburbs | $1,773,921 | 0.3% | 4.3% | 4.0% |
| 11 | Millers Point | Sydney - City & Inner South | $2,180,817 | -0.1% | 2.5% | 3.1% |
| 12 | Caringbah South | Sydney - Sutherland | $1,701,972 | -0.9% | 6.0% | 3.8% |
| 13 | Bondi Beach | Sydney - Eastern Suburbs | $1,625,920 | -1.0% | 4.9% | 4.0% |
| 14 | Cremorne Point | Sydney - North & Hornsby | $1,938,510 | -2.4% | 1.5% | 2.4% |
| 15 | Darling Point | Sydney - Eastern Suburbs | $2,557,644 | -2.6% | 4.5% | 3.6% |
| 16 | The Rocks | Sydney - City & Inner South | $1,897,437 | -2.8% | 1.5% | 2.3% |
| 17 | Rose Bay | Sydney - Eastern Suburbs | $1,751,012 | -2.9% | 4.2% | 4.0% |
| 18 | Barangaroo | Sydney - City & Inner South | $1,941,421 | -4.2% | 0.9% | 2.3% |
| 19 | Milsons Point | Sydney - North & Hornsby | $2,065,153 | -5.1% | 1.3% | 3.1% |
| 20 | Bellevue Hill | Sydney - Eastern Suburbs | $1,684,266 | -5.7% | 4.5% | 4.0% |
Data source: Cotality (exclusive to API Magazine). About the data: Median values refers to the middle of valuations observed in the region. Only metrics with a minimum of 20 sales observations and a low standard error on the median valuation have been included. Data to 31 January 2026.
Segmentation defines 2026
Australia’s luxury market in early 2026 is neither surging nor retreating. It is segmenting.
Melbourne’s top end is underpinned by structural scarcity and increasingly influenced by younger wealth. Perth remains supply-constrained, with downsizers dominating the buyer pool. Sydney’s super-prime tier has reasserted itself internationally. Queensland’s prestige markets, while still elevated, are no longer the clear value proposition they once were.
Across all markets, the common threads are certainty, location and quality. As Mr Armstrong put it, “scarcity is structural” in the best suburbs. And as Ms Carter’s experience in Perth shows, when supply tightens, buyers are moving decisively when the right property emerges.
The chandelier, it seems, is not flickering but simply illuminating different rooms.
