The beginning of 2020 experienced a marked increase in housing prices in Australia with an annual growth rate of 2.5%. Prestige homes in the country have continued with their trend of price growth and are in no mood of looking back. The estimated 7% growth in Sydney and Melbourne predicted by experts was not exaggerated as the prices grew as expected and have not been hampered by the economic and environmental conditions.
Besides the usual two megacities that have been raking in dollars, Brisbane, Adelaide and ACT have also performed phenomenally in the current year. The speculations related to the COVID-19 pandemic affecting the property prices have not come true for the prime category constructions. Thus if you are planning to purchase a luxury property for sale in Australia, then you should not get affected by the market gossip.
The figures of the latest transactions in the prime property market have a different story to tell than what is being circulated by some pessimists. The ground reality has not changed much from what it was before the virus entered our nation. Let us take a look at the latest developments in the luxury property market.
1. Sydney and Melbourne Continue To Lead
According to real estate survey reports, the prices of trophy homes will continue to rise up, and Sydney will display an increase of 3% in value in 2020. Melbourne will not be far behind with a 1% growth rate. The pandemic has not hampered the growth of the A-grade properties as investors are showing the same interest in making purchases during the lockdown. A huge volume of traffic increase has been noticed by websites listing luxury properties since investors are seriously thinking about finding the best way to get a positive return on investment.
Property is being viewed as a safe investment over stocks and shares, which are losing their value amidst a global slowdown due to the impact of the novel coronavirus. The industry veterans had suggested earlier that the impact of the virus on property rates will depend upon how quickly it gets contained. So far, we have been able to control community spread, and the numbers have not escalated as rapidly as they have in other countries. The government is planning to ease the restrictions by July, which means that things can get back to normal shortly.
2. Auction Clearance Rates Are Surging Ahead
While the Sydney auction that took place in March experienced an 80% clearance rate, the auction of May wasn’t far behind with a 75% clearance rate. The median price of the elite homes that were sold during the auction held in March stood at $1.465 million. The biggest bid came for the high-end four-bedroom apartment which got purchased for a whopping $7.25 million. The regions that experienced a growth in the sale of opulent homes include Ryde Council area, North Shore, Parramatta and others.
Buyers are making sure that they are registering for these auctions so that they do not miss out on buying the most affluent properties. The auction held in May showcased the improved buyer confidence with the highest bid reaching 3.82 million for a 5-bedroom house in Belle Property Balmain. Another residence was sold for 2.835 million in North Shore Chatswood, and a house in McGrath Epping was sold for $2.55 million.
3. The Biggest Sales Have Come In May
While many were thinking that the pandemic will make people stop spending money, the house sales in May have proven otherwise. The Darling Point six-bedroom luxury home of Pamela Jack was sold for $12 million. The spacious mansion with harbour views has been among the most sought-after properties in the region. Another penthouse was sold in Darlinghurst’s Republic 2 for $6.5 million.
Some of these properties have come on the market as the sellers intend to downsize and move into easy to maintain prime properties. Many wanted to move close to the CBD so that they can be in proximity to all the happening events and activities. The upkeep of the massive homes is yet another reason that retired couples are moving into easily maintained homes with a touch of affluence.
4. Low-Interest Rates Have Strengthened Growth
While many were concerned about the impact of coronavirus on the luxury property market in Australia, the low-interest rates have kept the momentum going in the industry. The prices will not drop as the interest rates are at an all-time low, but the volume of sales may decrease. If the country goes back to normal economic activities after the restrictions are lifted, then the market can recover completely.
Moreover, the waterfront properties have been generating millions of dollars, and the past few months have experienced decent growth in the house prices which will continue throughout 2020. Many new luxury apartments are being built in Sydney, Melbourne and Brisbane and will be ready in the next year. Several entrepreneurs, families and active retirees are lapping up these properties that boast of smart living technology and are close to all the amenities and give a feeling of community living within the complex. The median value of these magnificent apartments in Sydney’s Barangaroo was close to $2.9 million for the third quarter of 2019.
5. The New Way of Online Auctions
With social distancing in place and public auctions being banned in the country for the moment, the industry has shifted to online auctions. Although the move was not welcomed by many agents initially, they are now happy with the benefits that have come along with it. According to real estate agents, online auctions witness participation only from potential buyers and no one else. They have been experiencing better results with each passing week.
The best part about an online auction is that it can be held at anytime from anywhere. Online auction platforms have registered a sudden rise in their sales as more and more agents are going digital. Virtual tours are helping buyers to take a close look at the property and the surroundings before they bid for it.
The unprecedented economic changes brought about by the COVID-19 pandemic have affected all the industries, but prestige properties are holding up a resilient performance. If you are planning to invest in luxury property for sale in Australia, then do not hesitate as the market is in full swing and online auctions can get you the best deal.