The beginning of the year did not bring much good news for the Australian housing market as dwelling prices continued to fall. Sydney and Melbourne were hit the hardest as the home values had touched the roof in these two cities during 2017. Stricter credit rules and restrictions on foreign investors paved the way for the decline in prices. However, the prestige market seemed unfazed amidst all the chaos.
The super rich were not affected much by the reduced amount of loans being offered by the banks and continued to look for lifestyle-based real estate that exuded affluence and indulgence. Sydney is still the most popular destination for high-end buyers looking for luxury property for sale in Australia. The other popular destinations where the ultra-wealthy are headed include Brisbane, Melbourne, Perth and Gold Coast.
According to a recent survey, Australia was placed in third place in the list of most popular countries to buy prestige property. The economic and political stability, increasing employment, high quality of life and thriving commercial sector make the country a top choice among both local and international investors. Let us take a look at the latest developments in the premium property market which can impact the buyers.
The Demand For Luxury Property Will Keep Moving Up
As discussed above, the trophy homes have not been affected by the downturn in housing prices and will show an upward trend this year too. However, it will not be a drastic surge, only a few percentage points. The population of high-net-worth individuals is going to increase in the coming years. According to news reports, the number of billionaires will double in the country which will have a positive impact on investments in high-end homes.
Many expats are also showing interest in urban dwellings. Brisbane, Adelaide and Canberra have emerged as strong markets since Sydney and Melbourne have become out of reach for many buyers. The waterfront properties in Sydney will keep getting the highest dollars as their supply is limited and demand is astounding. Some experts suggest that even if the prices soften at the top end, it will not create panic in the market and will instead bridge the gap between the demand and the availability.
Sydney Is Still The Favourite Spot For Million Dollar Homes
The city has always been present on the property wish-list of buyers and the sky-high prices have not deterred investors. In September 2018, the city witnessed a record sale of the most expensive home in the country. Atlassian co-founder Mike Cannon-Brookes purchased Lady Fairfax’s Point Piper mansion Fairwater for a staggering $100 million.
The property is located on Sydney Harbour, which is the most sought-after destination for prestige homes in Australia. These elite homes are also the focus of international buyers who are not taking a back seat after the government’s measures to cool them off. The low-interest rates have improved the confidence of many investors and the rare trophy homes are basking under the glory of the high purchasing power of the wealthy population.
Developers Are Positive Despite The Slump
Even though the house prices are plummeting, the developers are keeping calm and have recognised the period as an opportunity to buy cheap land. The developer of an under construction beachfront tower in the eastern suburbs of Sydney, Harry Triguboff claims that they are building at the same pace. The billionaire developer who has built high-rise apartments in every major Australian city is confident about Chinese investments.
Thus the developers are not shying away from completing big projects as they believe that ups and downs are a part of the market. Also, the environment and lifestyle offered by the Australian cities is the top priority of many foreign buyers which makes them come back. The beachfront properties will never go out of fashion and this is the reason why Gold Coast has come up as a global luxury hotspot. The idea of living by the sea will not lose its charm and people will willingly pay the price for these enchanting homes.
Brisbane Is Getting All The Love
The sun-kissed capital of Queensland is beaming with the sudden interest of home buyers in its properties. The city has been witnessing a strong job growth and increase in inter-state population which have brought down the vacancy rates. The deluxe homes surrounded by mesmerising views of the serene Brisbane River are getting all the attention.
Many new infrastructure projects have come into the picture and the rental yields are higher than ever in the city. The benefits of affordability and positive economic conditions are offering value for money to investors who are burdened by the tighter credit policy. The lifestyle of the Sunshine city has brought many enquiries into million-dollar sales and growth of the affluent population is driving the boom.
Auction Clearance Rates Improve For Top End Market
The clearance rates for both Sydney and Melbourne moved beyond the 60% mark in June 2019. The confidence of the buyers has been a result of the loss of Labour in the recently held Federal elections and the probability of high-interest rate cuts. Additionally, the introduction of the First Home Loan Deposit Scheme and APRA’s proposal to get rid of the 7% ‘stress test’ which is to be replaced by a 2.5% buffer will help in reviving the housing market in Sydney and Melbourne and 2020 will prove to be a better year for real estate.
The blue-chip suburbs will lead the way as the population is rising and infrastructure is progressing. Regions like Ballarat, Geelong and Bendigo will show better performance as the government is providing various grants such as first home buyer and stamp duty exemption schemes. Similarly, the inner city suburbs of Sydney are catching up with the trend and displaying an improvement.
From the inner-city suburbs to Gold Coast, Brisbane and Hobart, luxury property for sale in Australia is soaring despite the housing slump. Experts predict that the fall in prices is a temporary phase and the market will be back in action from next year. So if you are planning to invest in a beach house, you do not have to worry about the downturn.