Premium Property Prices Soar Amidst Real Estate Revival, But Risks Remain - Property Inc

Premium Property Prices Soar Amidst Real Estate Revival, But Risks Remain

Despite recent interest rate rises and economic uncertainty, Australia’s premium property sector continues to rally, leading a resurgence in home values across the nation. However, challenges such as supply issues and concerns about further economic disruption, including a potential double-dip housing downturn, raise questions about the sector’s future growth.

Sydney is spearheading the property market rebound with a 1.7% increase in June, followed by Brisbane (1.3%), Perth, and Adelaide (0.9% each). Only Hobart experienced a decline in prices, and regional markets remained generally weaker, as reported by Michael Janda, Rachel Puppazzoni, and Tony Ibrahim from ABC News. Meanwhile, the well-known property developer Lendlease has implemented a hiring freeze due to the challenging economic environment.

Carla Peacock, a hopeful homebuyer in Sydney’s premium property market, explained her experience. “The supply is short, the interest rates haven’t really dampened the interest because there’s less supply on the market,” she told ABC News.

This sentiment was echoed by Tim Lawless, CoreLogic’s research director, stating that, “Through June, the flow of new capital city listings was nearly 10% below the previous five-year average and total inventory levels are more than a quarter below average”.

Although rising interest rates are predicted to slow down the market, their impact so far has been minimal on premium properties. Matthew Smythe, the principal at Belle Property in Neutral Bay, explained that many buyers at the high end of the property market are paying cash and are therefore unaffected by interest rate rises.

Yet, despite this, prominent property developer Lendlease is grappling with the challenging conditions in the property sector. Steven Byerley of The Australian reported that Lendlease has implemented a hiring freeze in response to a sluggish economy, rising industry costs, and a decline in demand for homes.

According to Louis Christopher, a long-time property analyst and managing director of SQM Research, the property market is showing resilience in the face of interest rate rises. However, there are early signs of price growth slowing, as the most recent interest rate rises have increased expectations of how high the RBA will go and how long rates may be elevated.

While premium property prices are defying expectations, Mr. Christopher warns that a significant spike in unemployment could potentially result in a double-dip downturn in the housing market1. With Lendlease already taking proactive measures to manage costs, it remains to be seen how the rest of the property market will respond to these looming threats.


Janda, M., Puppazzoni, R., & Ibrahim, T. (2023). Premium properties lead real estate revival, but is a double-dip housing downturn looming? 

Byerley, S. (2023). Lendlease in hiring freeze as property market struggles. The Australian. 

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