Sydney’s ultra high-end market has proven relatively resilient to economic headwinds, according to new research from Knight Frank.
Sydney had the eighth highest number of sales worth more than US$10 million globally in 2022, according to Knight Frank’s latest Wealth Report.
With 99 of these ‘super prime’ sales, Australia’s largest city beat out Geneva (with 69 sales) and Paris (23 sales).
New York, with 244 sales, ranked first on the list.
For ultra-prime sales – worth more than US$25 million – Sydney recorded seven, sitting just above Paris,
with six.
Knight Frank Head of Residential Erin van Tuil said the top end of the Sydney market was less likely to be impacted by interest rates rises.
“This is why we have seen strong transaction activity seen in Sydney’s super and ultra-prime markets
last year as the wider residential market experienced a lull in activity,” she said.
“We expect to see ongoing buyer activity in these price points over 2023 as confidence returns,
particularly with an expected peak in inflation and rate rises later this year, and along with it more
certainty on the economic landscape.”
Activity in this exclusive subsection of the Sydney market had been concentrated on apartment sales, Ms Van Tuil said.
“Interestingly, it’s the super-prime apartments overall influencing transaction numbers,” she said.
“Over the past decade, an average 3.4 per cent of Sydney’s annual prime apartment sales – generally defined as the top five per cent of the market by value – have qualified as being in the super-prime sales segment as more people are now rightsizing to luxury apartment living like you would traditionally find in cities like Paris and Geneva.
“Since the start of 2021, sales in this super-prime apartment segment in Sydney jumped to average an
annual 9.9 per cent of total prime apartment sales despite a modest uptick in the delivery of new luxury
apartments over the two years.”
More bang for your megabucks
At the top end of the market, Sydney property offered buyers better value per square metre than many other cities.
US$1 million buying 44sq m of luxury space in the city, putting it almost on par with Paris at 43sq m.
The Gold Coast luxury market offers the best value on this metric, with US$1 million buying 117sq m of space.
The Gold Coast recorded the highest luxury price growth of all the Australian cities and was the
fifth best performer in the Asia-Pacific, according to Knight Frank.
It saw growth of 4.1 per cent in luxury prices, equal with Toronto, followed by Melbourne (3.5 per cent), Perth (1.3 per cent), Sydney (1.1 per cent) and Brisbane (0.2 per cent).
Globally, luxury markets had continued to perform above historical averages in 2022, Knight Frank Head of Residential Research Michelle Ciesielski said.
There were 1392 sales transacted at or above US$10 million across 10 global markets, she said.
“While this represents a decline compared with the record-breaking 2,076 transactions recorded in 2021, it is still 49 per cent above 2019 levels and equates to US$26.3 billion in sales,” she said.
“As with many market segments, the second half of 2022 saw a slowdown in transactions as the cost of debt rose and economic uncertainty entered the equation, but it was moderate with 44 per cent of transactions happening globally in the final six months.”
