SCARCITY AND STATUS DRIVE AUSTRALIA’S HIGH-END PROPERTY BOOM

Australia’s top-tier property market has not only held its ground but surged ahead, outperforming median market trends over the past decade.

According to Ray White’s Luxury Market Report 2025, demand for prestige homes with location, character, and uniqueness has fuelled long-term price growth, with Sydney and Brisbane emerging as key players in the nation’s high-end housing boom.

While the broader property market has faced its share of turbulence, the report reveals that luxury homes, particularly those in tightly held or lifestyle-rich areas, are proving to be recession-proof investments.

Prestige Properties Outperform the Median

Ray White’s data shows that over the past decade, luxury house prices have grown 84%, compared to 70% growth in median-priced houses. Luxury apartments, too, posted significant gains — up 58% over the same period, outpacing the 31% growth seen in median units.

This upward trajectory highlights what affluent buyers have long known: scarcity and quality always command a premium.

“Luxury buyers are motivated by lifestyle and legacy — not just returns,” the report states. “They seek homes with architectural character, privacy, exclusivity and proximity to amenities. And increasingly, they’re willing to pay for uniqueness.”

2023: An Unusual Dip for Luxury

In a rare deviation, 2023 marked the first time in ten years that the median market outperformed the luxury market. This was attributed in part to tighter credit conditions, a cautious global investment climate, and a flight to perceived value in the lower-priced brackets.

But Ray White analysts believe this was a temporary recalibration rather than a trend reversal.

“Across the long-term horizon, prestige continues to outperform,” the report concludes. “The recent dip was more reflective of macroeconomic sentiment than a fundamental shift in demand for luxury.”

“Alcooringa,” the Spanish Mission-style masterpiece in Bellevue Hill, was sold off-market by Ray White Double Bay.

Sydney Still Leads — But Brisbane and the Gold Coast Are Rising

Unsurprisingly, Sydney remains the juggernaut, commanding 64% of all national luxury house sales and 51% of unit sales. Harbour views, limited supply and generational wealth underpin its continued dominance.

But perhaps the most compelling story of 2025 is Brisbane’s ascent. For the first time, luxury house and apartment prices in Queensland’s capital have crossed the $1 million threshold, and buyer activity shows no signs of slowing.

Migration from southern states, lifestyle appeal, and the impending 2032 Olympics are all contributing to the city’s new prestige identity.

“Brisbane is no longer the underdog,” the report says. “Buyers from Sydney and Melbourne are increasingly seeing it as a value play — and that’s driving demand for luxury stock.”

The Gold Coast, meanwhile, has quietly expanded its market share in the luxury unit space by 9%, thanks to surging demand from downsizers and international buyers. Waterfront apartments and branded residences are proving particularly hot.

Melbourne’s Prestige Market Contracts

In contrast to the upbeat figures from Queensland and New South Wales, Melbourne has experienced a notable retreat. The city’s share of luxury unit sales has fallen 4%, and luxury house sales have dropped 12%.

While the report stops short of sounding alarm bells, it attributes Melbourne’s cooling to shifting lifestyle priorities, post-pandemic relocation patterns, and ongoing population churn.

“Melbourne’s prestige market isn’t declining — it’s simply being rebalanced,” the report notes. “But with the right architectural product and location, the appetite is still there.”

Ray White Chief Economist Nerida Conisbee

The New Luxury: Character, Lifestyle, and Privacy

More than ever, luxury buyers are seeking differentiation — properties that offer not just size or finishes, but a distinctive story. Think: heritage homes with contemporary restorations, homes with water access or panoramic views, and penthouses in boutique developments rather than high-density towers.

Homes that stand out are commanding serious premiums — often well above suburb medians — especially in traditionally non-prestige postcodes.

“The days of ‘McMansions’ being considered luxury are over,” the report adds. “Modern buyers want soul, not just square footage.”

The Verdict: Scarcity Drives Value

Whether it’s a terrace in Paddington, a penthouse in Newstead, or a vineyard in the Adelaide Hills, the message from the Ray White Luxury Report is clear: when it comes to high-end real estate, scarcity is king.

As buyers seek long-term value and lifestyle investments, the prestige market is expected to remain resilient, particularly in locations with strong infrastructure, lifestyle appeal, and development restrictions that limit supply.

In a world of economic uncertainty, luxury real estate is increasingly being seen not just as an asset, but as a form of security, both financial and emotional.

Australia’s housing crisis will not be solved by first-home buyer incentives or tax changes alone, with leading property figures warning governments must tackle supply constraints if affordability is to improve.

Speaking at the Kanebridge Quarterly Property Leadership Summit in Sydney last week, expert project marketing specialist Sam Elbanna, property investor and fund manager Paul Miron and property consultant Karla McNeice said that a lack of housing supply remained the central issue facing the market.

Elbanna, Director of CPM Realty with more than 30 years’ experience in project sales, argued that successive governments had focused too heavily on stimulating demand rather than addressing the barriers preventing new housing from being delivered.

“The misconception is that politicians think the way to solve the housing crisis is to drive demand,” he said.

“The reality is that’s not the way. This is a supply-side problem, and it needs to be solved on the supply side.”

Drawing on his experience in project sales, Elbanna said policies designed to help first-home buyers often had unintended consequences, pointing to previous grants that ultimately flowed through to higher property prices.

Instead, he said developers were facing increasing red tape, approval delays and rising costs, which were discouraging new housing supply.

“In the absence of stock, demand exceeds supply,” he said.

Miron, a Co-Founder and Fund Manager of Msquared Capital, said the housing debate had become overly focused on tax policy while overlooking broader structural issues.

He argued that affordability challenges stemmed from a combination of factors, including planning constraints, supply shortages, migration levels and interest rates.

“No-one can be 100 per cent certain on the real reason for property prices is going up,” he said.

“The reason why property prices are higher is a combination of interest rates, lack of supply, migration, vacancy rates and maybe taxes play a role.”

Miron was critical of recent federal housing policy changes, warning they could reduce the number of new homes being built and further constrain supply that was even highlighted in the budget.

He also highlighted the importance of the property sector to the broader economy, noting that residential real estate and related industries employed more than one million Australians.

McNeice, who advises developers on sales strategy and market intelligence, said understanding buyers had become increasingly important as affordability pressures intensified.

While affordability remained a major consideration, she said today’s buyers were focused on value rather than simply price.

“People are looking for value for money,” she said.

She said buyers were increasingly evaluating factors such as transport connections, walkability, nearby amenities and flexible living spaces that could accommodate changing family needs.

“What infrastructure is going on? Can I walk to the shops? Can I meet people at the local cafe?” she said.

The panel also discussed the mounting pressures facing developers, with Elbanna arguing that many projects become financially unviable from the moment a site is purchased.

“The viability of a development happens at the moment the site is bought,” he said.

He said rising construction costs, higher interest rates and overly optimistic feasibility assumptions had left some developers exposed as market conditions changed.

While acknowledging the growing number of smaller and first-time developers entering the market, Elbanna said property development required expertise across finance, construction, marketing and legal disciplines.

“It is actually a business that requires a level of expertise,” he said.

Looking ahead, the panel agreed opportunities remained in the market despite current challenges.

Miron said property should continue to be viewed as a long-term investment and cautioned against trying to time short-term market movements.

McNeice said success would increasingly depend on identifying projects that genuinely met changing buyer expectations.

Elbanna said affordable housing remained achievable, but developers needed to deliver more than just homes.

“We can provide affordable housing in this country,” he said.

“But we’ve got to wrap that affordable housing with the things that people want.”

As Australia’s housing affordability debate intensifies, the panellists agreed on one point: without a meaningful increase in housing supply, demand-side measures alone are unlikely to solve the nation’s property challenges.