Queensland dominates global property rich list but Sydney takes top gong for Australia
Two Queensland cities are now among the top global locations for price growth in the luxury residential housing market.
For the first time, the Gold Coast has earned a spot on the Knight Frank Prime Global Cities Index, which ranks the top cities for growth in the prestige property market each quarter.
For the second quarter of 2019, Queensland’s Glitter Strip, which is ranked 27 out of 46, joins Brisbane (20th), Sydney (18th), Melbourne (21st) and Perth (32nd) on the global list.
The report said that the Gold Coast’s inaugural inclusion reflected the tourist haven’s stability and its established luxury home market, with a “solid pipeline of new projects catered towards affluent local and interstate downsizers”.
It joins the likes of Berlin (1), Moscow (3), Paris (7), Beijin (9), Tokyo (19) and San Francisco (26).
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The index tracks the movement in luxury residential prices across global markets, and while prices globally were up 1.4 per cent on average, the research found that growth was “significantly lower” than the four year average, suggesting that global economic headwinds were having an impact.
Berlin took out pole position again, but Sydney reclaimed top spot for Australia after Brisbane briefly knocked the property powerhouse from its pedestal in the first quarter of this year.
The Q1 index ranked Brisbane 14th, ahead of Sydney in 18th spot.
At that time, Brisbane posted an 12 month price growth of 3.2 per cent, and 0.4 per cent growth over three months.
By comparison, Sydney saw growth of 2.4 per cent and 0.2 per cent over the same time period.
But fast forward three months, and it would appear the downturn is looking up again in Sydney, with the city recording growth of 2.5 per cent (12 months) and 2 per cent (3 months) during the second quarter.
For Brisbane, there was a small drop in prices (0.7 per cent) over the past three months but the city still recorded annual growth of 2.2 per cent, which is higher than the overall average annual prime price growth of 1.4 per cent across the 46 global cities in the 12 months to the end of June.
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The Gold Coast recorded year-on-year growth of 1.1 per cent, outperforming Singapore, Los Angeles, Bangkok, Mumbai and London, to name a few.
Melbourne jumped one spot up the rankings to 21st place thanks to its 2.1 per cent annual growth, and 0.9 per cent value increase over the three months to June.
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Knight Frank’s head of prestige residential Deborah Cullen said the majority of their local “ultra-wealthy clients” had felt that the local political and economic environment had made it more difficult to create and protect their wealth over the past couple of years, but 93 per cent of them reported their wealth had still increased in 2018.
Seventy-per cent of those uber-rich clients expect their wealth to further increase this year, strengthening demand for luxury properties.
Interest rates are also now at a record low one per cent, with many experts tipping they will fall further by the end of the year.
It is trend being seen in other global cities, as policymakers worldwide look to stimulate growth.
In Brisbane and on the Gold Coast, prestige agents have reported an increase in buyers seeking out high-end homes, but a shortage of sellers listing properties for sale.
Knight Frank head of residential research Australia Michelle Ciesielski said owner-occupiers and downsizers continued to drive up values at the prestige end of the Gold Coast residential market.
As for Brisbane, Ms Ciesielski said the rush for prestige properties had eased, likely due to the fact that prices in Sydney and Melbourne had bottomed out.
“In saying this, growth in the local downsizer population remains consistent and will (continue to) do (so) over the coming years,” she said.
Ray White New Farm principal Matt Lancashire said he believed the benchmark for Brisbane’s prestige market was now “$3 million plus”.
He said even rundown, unrenovated cottages in some of the city’s most sought-after suburbs were fetching in excess of $1.5 million.
“I have a lot of high-end buyers waiting for the right property,” he said. “In Brisbane, there is never enough prestige properties to meet demand.
“As it stands, I have 17 buyers on my books willing to spend over $10 million on the right property.”
Mr Lancashire said he was finding that the “higher the price, the faster the sale”, in many cases.
He said one third of all of his deals last financial year were to buyers based overseas.
On the Gold Coast, Alex Phillis of Alex Phillis Luxury Real Estate said the city had grown from a transient tourist town into a laid-back place to live in luxury.
He said that many buyers were cashed-up and coming from interstate where prices were exorbitant, meaning many could afford the over-the-top mansions the coast was renowned for.
“A lot of those (buyers) from Melbourne and Sydney have worked hard for the past 40 to 50 years and they want to come and escape the weather,” he said. “They’re making a lifestyle choice and they’re going extreme.
“The Gold Coast is being taken seriously now at a global level.”
He said more flights going in and out of the Gold Coast Airport and improved infrastructure had also bolstered the Gold Coast’s position as a got-to destination.
Additional reporting by Jessica Brown.