The upper end of the property market in Australia, particularly in Sydney and Melbourne, is booming despite increasing living costs and interest rate rises. Wealthy buyers are showing a keen interest in prestige homes, with demand surging since Easter. Homes in exclusive postcodes are selling well above their asking prices, while properties with price tags of $10 million or higher are receiving multiple offers and selling quickly.
The demand for expensive properties is far higher compared to a few years ago. Michael Coombs, a property specialist in Sydney’s lower north shore, states that if he has a property priced at $30 million or above, he already has around 20 potential buyers. This recovery in the upper end of the property market is stimulating overall market growth, particularly in Sydney and Melbourne.
Several factors contribute to the surge in demand for luxury homes. Many buyers are expats returning for their children’s schooling, while others are international buyers taking advantage of relaxed rules and a weakened Australian dollar due to the pandemic. Additionally, locals who have prospered in business during the pandemic are gaining confidence and are willing to spend. The main challenge for these buyers is the shortage of suitable properties, whether new or existing builds.
The shortage of properties is not limited to Sydney and Melbourne but is a widespread issue along the east coast. This scarcity of available properties has led to intense bidding when suitable properties do come on the market. Agents highlight the need for a significant increase in properties available for sale to meet the current level of demand.
In Melbourne, the shortage of prestige properties is particularly pronounced. The volume of sales for properties valued at $3 million or above has dropped by almost one-third in the past year, according to CoreLogic figures. This shortage has prompted agents to cold call potential sellers in search of suitable properties. The market in Melbourne started picking up before Easter and has seen significant growth since then. Homes are selling in half the usual time, and prices are remaining strong. Buyers are even willing to pay a premium for new homes to avoid renovating.
Luxury properties in the Bayside market of Brighton and surrounding areas are also experiencing increased demand. Matthew Pillios of Marshall White Bayside reports an influx of buyers in this luxury market. The competition is fierce, and properties are selling quickly at high prices.
Overall, despite the challenges faced by average homebuyers due to interest rate rises and living costs, the upper end of the property market in Australia is thriving. The demand for prestigious homes in Sydney and Melbourne, and to a lesser extent Brisbane, is surpassing supply. Expats, international buyers, and successful locals are driving this surge in demand, resulting in intense bidding and properties selling well above asking prices. With the shortage of available properties, agents stress the need for a significant increase in the number of homes on the market to satisfy the current level of demand.