Property Australia

Australian prime growth outpaces global average


Brisbane, Sydney, Melbourne and Perth record higher than average prime price growth, according to latest global research from Knight Frank which keeps watch over 45 global cities.

The latest Knight Frank Global Cities Index, which monitors the top five per cent of the housing market by value, ranks Brisbane at 14 for luxury price growth.

The value of Brisbane’s prime residential real estate increased by 3.2 per cent over the 12 months to March 2019. Sydney ranked 18th (2.4%), followed by Melbourne in the 22nd spot (1.8%) and Perth in 23rd (1.8%)

The index increased by 1.3 per cent annually to first quarter of 2019, its lowest average annual rate of growth since the fourth quarter of 2009, and down 1.8 per cent on the previous quarter.

The average rise in luxury residential real estate has been 57.4 per cent over the last decade, Knight Frank says.

But Michelle Ciesielski, Knight Frank’s head of residential research Australia Michelle Ciesielski says residential price growth has continued to moderate.

“In the first quarter of 2019, the threat of a global trade war loomed, uncertainty surrounding Brexit peaked and the IMF projected that 70 per cent of the world’s economies would see a slowdown in growth in 2019,” Ciesielski says.

Nine rate rises in the United States since December 2015 has also moderated prime sales and prices.

Ciesielski expects Australia’s luxury market will continue to perform well, despite “recent cooling” in Sydney and Melbourne. She points to a forecast 21 per cent increase in the number of high-net-worth individuals, or those with more than US$1 million excluding their primary residence, in Sydney and Melbourne.

European cities accounted for seven of the top 10 rankings for annual growth. Berlin was the top ranked city, with a 14.1 per cent increase in annual growth.

Moscow has risen up the ranks in recent years, taking the number two spot with 12 per cent growth in prime residential prices over the past year. Frankfurt (9.6%), Edinburgh (7.6%) and Paris (7.5%) were characterised by strong tenant demand, limited new supply and relative affordability.