Knight Frank and Bayleys acquires third largest real estate firm in Australia
The announcement follows shareholder and regulatory approvals being met
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Knight Frank and Bayleys has completed its acquisition of leading Australian real estate firm, McGrath Limited, it was announced today.
The news follows regulatory and shareholder approval, with the Scheme of Arrangement coming into effect on June 17 and implemented on June 27.
McGrath Limited is the third largest real estate group in the country, according the data from CoreLogic, behind behemoth Ray White and stalwart LJ Hooker.
McGrath founder and CEO John McGrath said in a statement that he welcomed the move.
“We are delighted to be joining forces with two of the greatest real estate brands in the world,” Mr McGrath said. “Knight Frank is the most prestigious residential agency globally and provides us and our customers with instant access to the best global network and the most sophisticated international buyers in the world.
“Our goal is to build Australia’s leading and finest real estate brand over the next few years and this new partnership and network puts us in an extraordinarily strong position to do just that.”
Between them, Knight Frank and McGrath have 171 offices across Australia and Knight Frank is the largest privately owned real estate agency in the world with more than 740 offices worldwide.
Mr McGrath will remain at McGrath Limited as chief executive and managing director and retain his 23.3 percent shareholding in the company. Mr McGrath will also be on the new board of directors, along with Knight Frank Australia CEO James Patterson, Knight Frank Global head of residential Rupert Dawes, Bayleys managing director Mike Bayley and Bayleys finance director Ken MacRae.
Mr Patterson, CEO at Knight Frank Australia, said the acquisition represented a significant milestone in the company’s international expansion.
“McGrath is a great fit culturally,” he said. “We are aligned on many areas including our values, how we operate and our brand positioning. The Knight Frank, Bayleys and McGrath teams will continue to operate on a ” business as usual” basis, but with each party gaining access to vastly broadened networks, stretching across multiple borders, unlocking greater opportunities for our clients.”
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New detached-home sales fell 10% nationally in August, led by a 27% decline in Victoria, raising concerns about construction starts in 2027.
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Australia’s hoped-for recovery in housing construction is losing momentum before it has had time to close the national supply gap.
Sales of new detached homes fell 10 per cent nationally in August, according to the Housing Industry Association’s survey of major volume builders across the five largest mainland states. It was the fourth consecutive monthly decline.
The fall was broad rather than isolated. Victoria recorded the largest retreat, down 27 per cent, followed by Queensland at 20.2 per cent, New South Wales at 17.5 per cent, South Australia at 10.8 per cent and Western Australia at 8.2 per cent.
Across the three months to August, sales were 19.3 per cent below the preceding three-month period and 7.7 per cent lower than the equivalent period a year earlier.
New-home sales matter beyond the immediate fortunes of volume builders. They are an early indicator of future starts: buyers sign contracts, finance is finalised, approvals are secured and construction follows months later. A sustained sales decline during the middle of 2026 is therefore likely to weaken commencements during 2027.
The slowdown reflects the collision of several pressures. Households have absorbed multiple interest-rate rises, reducing borrowing capacity and increasing the repayment cost attached to a new build. Established-home prices have softened in some markets, weakening the relative appeal of waiting through a construction period. Builders continue to face elevated labour and material costs.
The Reserve Bank’s August analysis showed new-dwelling construction prices increased 1.8 per cent during the June quarter and 5.3 per cent over the year. It attributed part of the pressure to oil-derived building products and other conflict-related costs.
Policy uncertainty can also cause buyers and investors to defer large commitments. But the precise contribution of any single tax or regulatory change is difficult to isolate from rates, confidence, land prices and construction costs. The HIA survey should be read as an indicator from large builders rather than a complete count of every dwelling sale.
The figures complicate progress towards the Housing Accord target of 1.2 million homes. The National Housing Supply and Affordability Council reported 308,000 completions since the Accord began and 244,000 dwellings under construction in the March quarter. Approvals and commencements had improved, but falling sales risk undermining the next wave.
For developers and governments, the warning is that planning approvals alone do not create homes. Projects need finance, viable construction pricing and buyers able to settle. If one part fails, approved supply can remain on paper.
Data box
National August new-home sales: Down 10 per cent
Three months to August: Down 19.3 per cent from the preceding three months
Year-on-year three-month comparison: Down 7.7 per cent
Victoria: Down 27 per cent
Queensland: Down 20.2 per cent
New South Wales: Down 17.5 per cent
South Australia: Down 10.8 per cent
Western Australia: Down 8.2 per cent
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