This report is part of PERSPECTIVES, a comprehensive look into the world of prime residential real estate. Access the full report here to discover the latest trends and dynamics shaping the market.
“In Australia, the people are laid back, the weather’s good, the lifestyle’s good, the sun shines, there’s blue skies and a lot of upside,” says director Ken Jacobs of Private Property Global.
That might explain why in 2023, many overseas buyers—including Chinese, American and European buyers—flocked to the country in search of a “safe haven” without political turmoil.
Australia has always been an attractive option for high-net-worth Chinese because of its relative proximity. Now that tensions have largely eased between China and Australia, Jacobs says 2024 could see an influx of Chinese buyers.
The Russia-Ukraine war, paired with fears of uncontrolled immigration, has led some to leave Europe, Jacobs says. Meanwhile, a polarizing political climate has contributed to Americans opting for more politically stable Australia.
But aside from geopolitical reasons, a simple fact remains: Australia is, and always will be, an attractive option for well-heeled buyers.
Amid frequent interest rate hikes, record sales and tight supply, the Australian real estate market was anything but consistent in 2023.
72 Wentworth Road, Vaucluse, Sydney, New South Wales. Presented by Private Property Global
The bottom of the market softened substantially as interest rates reached a 12-year high and rising inflation paralyzed buyers and sellers. But a shortage of quality stock at the upper end of the market drove record-breaking sales in the eight digits.
Yet perhaps the biggest takeaway from 2023 is that the market returned to being “normal,” Jacobs says.
Two years ago, when interest rates were at a record low 0.1% and the pandemic boom was in full swing, sales soared to unprecedented numbers. Now, everything has stabilized.
“We were never going to keep the same trajectory,” Jacobs says. “The market had to plateau at some point. Now, we’re back to a normal market.”
A market that includes jaw-dropping sales, of course.
Ranking in first place was the sale of a mansion in Sydney’s Point Piper, which closed in early 2023 for AUD 130 million (US $84.39 million), shattering the previous record for the country set in 2018 (AUD 100 million). The high-water transaction was followed by an AUD 76 million trade for an 1890s mansion in Sydney’s Bellevue Hill. Sydney’s highly desirable eastern suburbs saw two deals north of AUD 60 million (AUD 68 million and AUD 61.5 million).
The Di Stasio Estate,12 Range Road, Gruyere, Victoria. Presented by Private Property Global
Though the eastern suburbs have historically taken the prize for the country’s priciest listings, Melbourne’s Toorak suburb provided a close second last year with two sales in the top 10.
All in all, the 10 biggest sales in Australia amounted to AUD 533 million, or US $355.6 million.
The momentum is poised to continue in 2024.
Jacobs, who says he’s received numerous calls from sellers interested in listing their homes, anticipates this year will be strong because “there’s pent-up demand from buyers who are looking for trophy properties.”
New submarkets could also gain prominence this year. As land values and quality stock remain tight in the eastern suburbs, more buyers will be looking to buy in Sydney’s lower north shore.
Jacobs, who has record offers for a home in Longueville, says to anticipate records being set in the north shore region. In recent years, the record for the highest sale on the lower north shore grew from AUD 25.5 million to AUD 42.2 million.
