Australia’s luxury property market will remain an in-demand asset class over the next few years, as the ultra-high-net-worth (UHNW) population grows in the country.
By 2025, UHNW individuals in Australia would comprise 3,760 people with an individual net wealth of over US $30 million, according to a 2021 report. More people would join the UHNW sector at a forecast annual growth rate of 3.8% until 2026.
Despite the upward trend, a perennial concern among UHNW investors involves affordable yet quality properties for sale.
There’s a reason why the ultra-rich are wealthy, and it’s often being prudent with luxury real estate deals.
For this reason, suburbs (middle- or inner-city areas) have become increasingly popular. Here are the most affordable suburbs in Australia to buy luxury properties.
Luxury property investors should consider suburbs near the city’s fringe areas because of fast-rising prices.
Home values in Adelaide rose 2.5% in November 2021, the highest growth since February 1993, according to CoreLogic.
The record price growth indicates a ripple effect to inner suburbs such as Beaumont and Parkside. Some buyers in these areas paid $3.7 million in 2021 to buy a luxury home.
CoreLogic also listed Brisbane as the only other city with the fastest price growth in 2021. Inner-city suburbs such as Teneriffe attract many luxury property buyers because of heritage architecture.
It also helps that Brisbane eventually shed its image as a backwater town even among Australians living outside the city.
Median home prices in Teneriffe cost approximately AUD 1.9 million (US $1.3 million), which is higher than Brisbane’s average home price.
The Real Estate Institute of Queensland noted a 15.5% increase in the state capital’s median home price, amounting to AUD 900,000 (US $650,000).
Many of the Australian capital’s suburbs derive their names from previous prime ministers.
For example, Deakin takes its name after Alfred Deakin who served as the country’s second prime minister.
The median price for a luxury home in Deakin costs more than AUD 2 million (US $1.4 million). In general, luxury property prices in the suburb remain high partly due to these two landmarks:
- The Lodge (the Australian prime minister’s official residence)
- The Royal Australian Mint
Deakin is also home to the Canberra Girls Grammar Senior School, the city’s only independent private school.
The PRD Affordable and Liveable Property Guide showed that median home prices in the inner suburb of Battery Point reached AUD 1.5 million (US $1.1 million).
Based on the average price, prime residences in the suburb may cost at least AUD 3 million (US $2.2 million).
The estimated price relates to the tremendous price growth of apartments in Battery Point. Median unit prices in 2020 amounted to AUD 950,000, up 62.2% from AUD 585,625 in 2019.
Luxury home buyers should also scout for properties in Hobart’s suburban areas if they dislike dense communities.
The Australian Bureau of Statistics (ABS) ranked the city with the sixth-lowest population in 2020. More than 238,000 people reside in Hobart as of June in the same year.
Luxury home buyers in Melbourne should look beyond inner-city suburbs if they also want to avoid densely populated areas.
The ABS noted that over 5.1 million people live in Victoria’s capital as of June 2020, the second-highest population in Australia.
You’ll find some of the affordable luxury properties in the eastern suburbs. For example, the median home price in Glen Iris reached approximately AUD 2 million (US $1.4 million) in 2021, according to the PRD guide.
Even if you spend double the average price for a luxury home, it would still be affordable. Some prized estates in Melbourne’s inner suburbs cost almost AUD 16 million (US $11.9 million).
Median home prices in Dalkeith cost AUD 2.9 million (US $2.1 million) as of August 2021.
The average price led the area to become the most expensive suburb in Perth, according to the Real Estate Institute of Western Australia.
By contrast, the average sale price in Applecross reached AUD 1.6 million (US $1.2 million). Luxury property buyers should expect prime real estate in these areas to cost within this price range.
Luxury properties in Sydney still cost more than AUD 1 million (US $722,000) even in outer-city suburbs, according to the PRD guide.
For example, the median home price in Caringbah reached almost AUD 1.4 million (US $1 million) in 2021.
Interestingly, though, the median price in inner-city suburbs such as Glebe cost less than in eastern and northern suburbs.
You’ll need more than AUD 1.7 million (US $1.2 million) to buy a luxury home in Glebe. In the northern suburb of Chatswood, buyers need more than AUD 2.4 million (US $1.7 million).
Bondi Junction’s median home price in 2021 cost AUD 2.3 million (US $1.7 million). Luxury home prices in the eastern suburb may be more expensive because of its proximity to famous beaches.
If you’re planning to buy a harborfront home in Sydney, look for a brokerage that knows the very pinnacle of harborfront-style living in the city.
Click here to find out more about Private Property Global and how it specializes in luxury property sales above $5 million.