Australia's prestige property market is officially on the rise!

Australia's prestige property market is officially on the rise! Manish Khanna
Manish Khanna
Monday 23 Jun 2014
The prestige property market has been stagnant and struggling in the past few years after the big hit it took when the GFC (Global Financial Crisis) occurred.  Properties were remaining on the market for extended periods of time and some are still available years later. Sovereign Island for example was Australia’s most prestigious and secure residential address; it is now a sea of for sale signs. This though, is not for long. Now is the time to invest. This is because the prestige property market is on the rise.

The senior economist for the Domain Group, Dr Andrew Wilson, said the sale came amid a ‘‘a rising trend in prestige property buying in Adelaide’’. ‘‘The prestige property market is leading the Adelaide market into recovery, which is no surprise given value buyers are being activated which reflects the flat prices growth over the past four years in that market,’’ Dr Wilson said. ‘‘Buyers are now on the move and increasingly active, with those value perceptions likely to continue to drive activity at the top end, particularly in Adelaide’s metro east.’’ Dr Wilson said that North Adelaide and Norwood were tracking well with "‘very strong prices growth in the past year from healthy sales’’.

Properties have continually been decreasing their prices over time and the market has reached its downturn peak, this meaning that the only way to go from here is up. The reason for the market to suddenly pick up is because of the increase in demand from Asian buyers, their particular interest being prestige properties and million dollar mansions. Because of their interest it has fuelled the prices and brought competition and demand to the table.

The reason for the influx of Asian investors is due to Asia currently having restrictions on property purchases. Therefore cashed up investors are looking elsewhere. Asian cross-border investors have always seems to favour Australia, especially city markets like Sydney and Melbourne. With predictions of mansion prices increasing we have already seen investors jump on the band wagon before the market becomes hot. An example is the sale of a six bedroom mansion in Melbourne’s Toorak for a total of $21.5 million.

There were a further nine sales reported in the past ten weeks ranging from prices of $8 million to $20 million, this definitely being a sign that Melbourne’s market is on the mend. Australia’s prestige property market is getting hot and is getting hot fast. As one agent reported that she has received more enquiries for a particular mansion than she had in the past year. It was also noted that this was from local buyers as well as buyers from China. Overall the prestige property market, as mentioned, has been struggling for some time. The GFC hit the market and hit it hard. But even so it seems to be on the mend due to the combination of the current stable economic environment and the influx of international investors. Because of this it can be deemed to be the best time to invest in a beautiful mansion of your own. Good Luck.