Australia's prime residential market outperforming other global cities
Three Australian cities have made the top 20 for global prime residential price growth in a new international residential property report.
Knight Frank’s Prime Global Cities Index – Q2 2018 tracks prime residential prices, defined as the top 5% of the housing market, across 43 global cities worldwide.
Sydney, Melbourne and Brisbane came in at 15th (5.7% prime price growth), 17th (5.4%) and 20th place (3.4%) respectively in the report, with Perth just coming in 23rd place (2.7%).
Overall the index increased by 2.6% in the year to June 2018, with Guangzhou topping the list of cities with 11.9% price growth.
Knight Frank’s Head of Residential Research, Australia, Michelle Ciesielski said that the Australia’s prime residential market continues to perform well compared to its international comparisons.
“Despite a cooling mainstream market off the back of tighter lending practices, the prime market this quarter has continued to be resilient with buyers less impacted by these measures,” Ciesielski said.
The firm linked the growth in ‘ultra-wealthy people’ (defined as those with net assets of US$50 million or more) to price rises in the market segment.
Australia’s ultra-wealthy population swelled by 9% in 2017 – taking the population to 1,260, with a combined worth of US$269 billion, the report said.
More people are set to enter the category in the near future, said Knight Frank’s Head of Residential, Australia, Sarah Harding.
“Prime properties are dependent on increasing wealth flows, taking away the reliance the mainstream market has on income growth,” Harding said.
“Over the next five years, Australia’s ultra-wealthy population is projected to increase by 37%.
“We are seeing more of our prestige buyers seeking their second and third homes, not for income-producing purposes.
“This has resulted in these buyers not releasing a property to market before buying another, limiting the number of prime opportunities.”
