Flurry of luxury sales hits Q3 record

Demand for prestige properties in Australia continues to grow, with the highest number of third quarter sales on record achieved in 2020 and solid price growth forecast across most luxury markets into next year.

Research by Knight Frank showed there were 39 super prime properties sold in the third quarter of 2020, the highest number on record for the third quarter of a calendar year.

Knight Frank defines super prime property as homes worth more than $10 million in Sydney and Melbourne, and worth more than $7 million in other cities.

The third quarter deals were collectively valued at $594 million.

Sydney’s $470 million worth of transactions was the city's second-highest quarter on record, trailing the $580 million in sales that occurred in the fourth quarter of 2018.

Knight Frank head of residential research Michelle Ciesielski said the data indicated the resilience of Australian property markets through the pandemic.

“The record for third quarter transactions this year was reached when the majority of cities in Australia had eased lockdown restrictions, but it was incredibly impressive given Melbourne was still in a lockdown over this time,” she said.

“After a period of confinement, it’s not surprising buyers are seeking more space, and this will be a priority for some time to come, whether it’s upsizing to a standalone home with resort-style living and maritime facilities, or rightsizing, the downsizing trend towards luxury apartment living with house-like proportions.

“But buyers in Australia are currently faced with very little choice of established and new super-prime stock, which is driving competition for what is available and leading to record transaction volumes.”

Knight Frank national head of residential Shayne Harris said the relative undersupply of super prime properties was likely to result in sustained demand into 2021.

“These factors, along with knowing seven out of the past ten years have recorded their strongest results in the last quarter of the calendar year, including the past three consecutive years, gives an indication the year may round out better than one anticipated at the start of the pandemic,” he said.

“As many of the Australian ultra-wealthy population is unlikely to travel overseas while the borders remain closed, there’s a higher chance more money will be spent locally so it’s likely this flurry of activity will carry throughout 2021.

“Globally, the Sydney property market accommodates only a limited number of super-prime properties and this stock continues to be tightly held.”

On a city-by-city level, prime property transactions delivered a mixed bag, with Sydney the most established market and accounting for the vast majority of sales.

Knight Frank’s research predicted price growth of 3 per cent for Sydney prime property in 2021, with listings to remain tight and limited supply of luxury projects being developed.

Melbourne’s prime market is also expected to grow, by a modest 1 per cent in 2021, with the city playing catchup due to being the last Australian location to come out of lockdown.

Brisbane’s prestige market was tipped to grow by 2 per cent next year, while Perth is expected to build on a strong performance in 2020 to achieve 3 per cent capital growth in 2021.

Also forecast for 3 per cent growth is the Gold Coast, with downsizers and families attracted to the region’s beachside lifestyle and price points.