Sydney shrugs off Covid-19, cooling measures and tensions with China to emerge as hottest luxury homes market globally
- Super-wealthy locals, or those whose net worth exceeds US$30 million excluding their primary residence, have propped up Sydney’s property market
- We have noticed the absence of Chinese buyers, but the market has not been affected by this, agent says
The absence of foreign homebuyers, including those from mainland China, in Australia’s property market has not prevented Sydney from copping the crown of being the world’s top prime property market, with prices rising 10 per cent as of June this year, according to property consultancy Knight Frank.
Prime properties are those that are in the top 5 per cent of each market by value and deemed to be the “most desirable and expensive in a given location”, according to Knight Frank. The Australian city is also likely to share the top spot with London next year, with luxury property prices forecast to rise 7 per cent for both cities in 2022.
“Every quarter since March 2013, Sydney’s prime residential market has recorded positive annual price growth, demonstrating the ongoing undersupply of luxury prestige homes being built whilst our ultra-wealthy population continues to rise,” said Michelle Ciesielski, partner and head of residential research at Knight Frank Australia.
03:51
Australia-China ties continue to sour – so why do Aussies still want Chinese tourists?
Sydney’s rise to the top comes despite the Covid-19 pandemic, various property cooling measures Australia has imposed in recent years to tame runaway home prices, and a deepening rift between Beijing and Canberra that is perceived to have turned off Chinese buyers from Australian property. Instead it has relied on its super-wealthy locals – those whose net worth exceeded US$30 million excluding their primary residence – to prop up its property market.
Last year, the number of super-rich Australians grew by about 11 per cent to 3,124 and is estimated to grow annually by 3.8 per cent over the next five years, the property consultancy said. In the last quarter of 2020, property sales in the country’s prime region hit 1,224, a record high. On the other hand, completed luxury homes in Australia declined by 4 per cent to 26,700 in 2020 from the previous year.
In 2019 and last year, the city was ranked 4th and 3rd, respectively, globally in terms of luxury property price increases. From 2008 to 2018, average luxury property prices in Sydney grew 60 per cent, third behind only Berlin and Vancouver.