Australian Luxury Property Market Soars Amidst Global Economic Uncertainty - Property Inc

Australian Luxury Property Market Soars Amidst Global Economic Uncertainty

The Australian luxury residential property market has demonstrated remarkable resilience and growth, placing several of its cities among the top annual risers in the global luxury market, according to the Prime Global Cities Index (PGCI) for Q3 2023. Sydney led the charge, securing the eighth position with a 4.2% increase over the 12 months to September, followed by Gold Coast, Perth, and Brisbane, all showcasing robust growth. This performance outpaced the average annual price growth of 2.1% across the 46 markets covered in the report, signaling a positive trend for the Australian property market.

In an article penned by Kyle Robbins, Michelle Ciesielski, head of residential research at Knight Frank, highlighted the stabilisation of global housing markets, despite prevailing challenges such as higher mortgage rates and ongoing uncertainty over inflation and interest rate risks. Ciesielski remarked, “Nearly 70 per cent of cities reporting price rises over the past year confirms that global housing markets are displaying signs of stabilisation.” However, she also cautioned about the lingering uncertainties, primarily due to the potential for further interest rate hikes, which could limit price growth in the medium term.

Supporting these observations, another article by Melissa Heagney-Bayliss explored the outlook for property prices in 2024, with major bank economists predicting a continued rise in property prices despite potential interest rate increases [2]. The Reserve Bank of Australia (RBA) is widely expected to raise the cash rate at its November board meeting, which aligns with Ciesielski’s anticipation of a rate hike in the near future. However, the demand for housing continues to outstrip supply, keeping property prices on an upward trajectory.

Economists from major banks such as CBA, NAB, ANZ, and Westpac have projected house price increases ranging from 3% to 6% in 2024, with variations across different cities. These forecasts reflect a consensus that the Australian property market will remain robust, despite the potential headwinds from economic uncertainties and interest rate movements.

Erin van Tuil, head of residential at Knight Frank, attributed Australia’s strong performance in the luxury property market to increased demand, driven by rising migration and limited supply. She emphasized the resilience of the Australian market, stating, “Although uncertainty remains in global markets, Australia tends to be insulated with our relatively smaller prime residential market, and this resilience is likely to deliver a strong price performance forecast for coming years”. Knight Frank forecasts prime luxury home prices to rise by 3% at the end of 2023, 4% in 2024, and 5% in 2025, underscoring a positive outlook for the Australian luxury property market in the coming years.

In conclusion, the Australian luxury residential property market stands out as a top performer in the global luxury market, with its cities ranking high in the PGCI for Q3 2023. Despite the challenges posed by economic uncertainties and potential interest rate hikes, the demand for housing continues to surpass supply, driving property prices upward. The resilience and growth of the Australian property market are a testament to its strength, offering a beacon of stability in uncertain times.


Kyle Robbins, “Australia Dominates in the Global Luxury Market’s Top Annual Risers.” 

Melissa Heagney-Bayliss, “What’s the Outlook for Property Prices in 2024?” 

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