The Australian capitals experiencing world-class price growth in luxury real estate
The latest wealth report reveals two Australian capitals posted above average results compared with the rest of the world
The latest wealth report reveals two Australian capitals posted above average results compared with the rest of the world
Luxury real estate in Perth and the Gold Coast delivered above-average price growth compared to the rest of the world in 2023, but this year Sydney and Melbourne are expected to outshine the other Australian capitals, according to Knight Frank’s newly released global research report, The Wealth Report 2024.
Knight Frank’s Prime International Residential Index (PIRI 100), which measures price growth among luxury homes in the top 5 percent of the market in 100 prime locations, found luxury residential property prices were surprisingly resilient in the turbulent global economy last year, rising by 3.1 percent on average.
This was down on the 5.2 percent average recorded in 2022 and 8.4 percent in 2021. However, given the rapid rise of interest rates during the world’s fight against inflation, Knight Frank analysts said the growth rate was “solid”, with 80 cities recording flat or positive annual price rises. The resilience was largely due to a lack of supply, which created more buyer competition for fewer homes on the market.
Leading the PIRI 100 for growth was Manila, up 26 percent, followed by Dubai at 16 percent, The Bahamas at 15 percent; and Algarve in Portugal and Cape Town in South Africa both at 12.3 percent. In Australia, Perth and the Gold Coast recorded price rises that were higher than the global average at 5.2 percent and 4.1 percent, placing them in 28th and equal 38th place among the 100 PIRI cities. Sydney ranked equal 49th with 2.7 percent growth, followed by Brisbane in 58th place with a 2.3 percent price rise. Melbourne was the laggard among Australian cities, ranking equal 63rd with growth of 1.4 percent.
Knight Frank global head of research, Liam Bailey, said wealthy people targeted luxury residential property in 2023 as their portfolios began to recover. Mr Bailey said 24 percent of the world’s ultra-high-net-worth individuals (UHNWIs), defined as having a net worth of US$30 million or more, were actively looking to buy last year. The report finds that demand will likely be similar in 2024.
Looking ahead, Knight Frank analysts have provided their 2024 forecasts for luxury residential house price growth in 25 of the world’s most in-demand markets. They predict an average growth rate of 2.5 percent for the group, up from 1.7 percent in 2023. They think Auckland will record the strongest growth at 10 percent, followed by Mumbai in India at 5.5 percent. Among Australian cities, Sydney will lead the way with 5 percent growth, followed by Melbourne with 3 percent. This would place both cities in the top 10 out of the 25 cities canvassed.
The analysts also predict that Sydney will experience the highest prestige property rental price growth in 2024 at 12 percent, far ahead of any other city in the world. The next strongest prestige rental markets are tipped to be Auckland and Toronto in Canada with 6 percent growth, London at 5.5 percent and New York at 5 percent.
The Wealth Report finds that lack of stock was a key driver of price growth for both sales and rental markets last year, and this will remain the case in 2024. For example, Sydney’s luxury home sales were down by 37 percent in 2023, with similar volume declines also seen in London, New York, Dubai, Singapore and Hong Kong.
Knight Frank Partner Erin van Tuil said: “Whilst volumes have dropped for Sydney’s prime residential market, values have not, demonstrating once again that Sydney remains a popular location to live and invest ... The fundamentals of the Sydney market, such as lifestyle, transparent government and taxes and the sheer beauty of living in the Harbour City are unlikely to change, and therefore Sydney’s popularity is likely set to remain. With only so many waterfront locations available … owning a slice of Sydney Harbour real estate remains a popular investment.”The report also reveals what US$1 million buys in prime global cities and popular second-home areas in sun and ski holiday locations. In Sydney, US$1 million buys 43 sqm, and on the Gold Coast, it buys 112 sqm. By comparison, US$1 million buys 20 sqm in Aspen, 22 sqm in Hong Kong, 32 sqm in St Tropez, 33 sqm in London, 34 sqm in New York, 38 sqm in Los Angeles, 40 sqm in Paris and 42 sqm in Shanghai.
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Amrish Maharaj undid a century of hodgepodge alterations while navigating strict conservation rules
Haberfield, a charming slice of suburbia in what locals call Sydney’s “inner west” region, is miles from the landmarks like the Harbour Bridge and the Opera House, and isn’t famous for multimillion-dollar waterfront mansions. What it is known for, however, is fiercely protecting its architectural identity.
After an uproar in the 1970s led by local residents—who were fed up with period homes getting unsympathetic makeovers—the National Trust created the Haberfield heritage conservation area in the mid-1980s. As a result, the suburb of approximately 6,500 people has one of Sydney’s best-kept streetscapes.The heritage designation has been a win for preserving the past, but has created challenges for architects tasked with making Haberfield’s homes more family-friendly, sustainable and sellable.
Architect Amrish Maharaj was hired by his clients, owners Ramy and Sarah Azzam of ML Constructions, to modernise a single-storey Federation dwelling—an era of Australian architecture between approximately 1890 and 1915. Although its bones dated back to the turn of the last century, the Haberfield home, coined Glencoe, had already undergone a number of objectionable changes before conservation rules had come in. The design was stuck between two time periods.
“Its original roof and chimneys had been removed and replaced with a post-1943 hipped roof clad in terracotta tiles. The length of the house had been doubled with the addition of a substantial rear extension. A small skillion roof was put over the front veranda, metal balustrading and the front verandah detailing had also been amended, removing the original timber work,” Maharaj said.
“The previous work appeared to have focused on increasing the number of rooms, and not improving the spaces within,” he added. From the entry, a dark central hallway cut the house in half, splitting four bedrooms and a bathroom to the north from an additional bedroom, an enclosed lounge room, dining room and kitchen to the south.
Despite the patchwork of renovations and extensions over the years, planning regulations still remained strict for the team attempting to bring the residence into the 21st century.
“We had an initial concept, which was a little more modern than the end result, but the local council wanted a more traditional construction. We had a heritage expert come and look at the house and give their recommendations,” he said. “She determined that it was probably part of a group of three or four houses that were once the same beautifully detailed Federation-era homes. But somebody had come along in the 1940s and did their own thing.”
“There was a discussion about pulling off the roof and getting it back to what it was, but it came down to a question of budget. We tried to put back as much as we could, by replacing the front windows with traditional timber, we changed the front path and front fence just to give a little nod to what used to be, without stripping the render and reconstructing the whole roof.”
Now the street appeal of the home is a better fit with its Federation neighbours. The decision was then made to pull focus from the facade while investing attention, and funds, into the rear of the house.
“In keeping with what the Council was wanting, we used traditional materials and techniques in the construction of the back extension even though it does feel very modern,” Maharaj said.
As well as employing conventional methods for the external build of the large rear addition, a host of modern-day luxury finishes were used inside, where the interior design was overseen by owner Sarah Azzam.
High-traffic floors were finished with limestone tiles, Polytec joinery was used throughout, and internal walls feature a sleek white set render. Bathrooms feature Fibonacci Terrazzo tiles with underfloor heating.
A standout of the new look is the grand triangular gable crowning the rear indoor-to-outdoor living zone, a unique design feature in the neighbourhood of smaller sized blocks and heritage homes. The seamless flow to the backyard is an element that has become a must-have in modern Sydney homes thanks to the temperate climate.
“Our work began with the deconstructing and restructuring of the original home. Retaining four good-sized bedrooms to the front of the house, the central areas were dedicated to service spaces, with a big family bathroom, laundry, powder room and en-suite. The home then steps down to a large open-plan kitchen, dining and living room, which seamlessly connects to an al fresco dining area, garden, and a new pool and cabana,” Maharaj added.
“It’s such a Sydney thing, the seamless flow to the outdoors from the main living area. When I think about our briefs, from every single client, I’d say right at the top of everyone’s list is natural light, good ventilation and a connection to the garden,” he said. “Australians also love a north orientation.”
The Azzams, who declined to comment on the project, bought the unrenovated Haberfield house in 2020 for A$2.5 million (US$1.6 million), then sold the reimagined residence in 2023 for A$4.9 million.
“They bought it as their forever home. That large space at the back was created that way because they’ve got a big extended family,” Maharaj said. “They were often talking about Christmas dinners of 20 to 30 people, and space for a grand dining table was specifically on their list of requirements. Sarah has a great design eye and was meticulously hand selecting the finishes. But they ended up seeing another house nearby and decided to do it all again.”
Maharaj shared some more thoughts about the design and build process.
The biggest surprise was… I think we got lucky with the glass gable in the back of the house. We tried to do something similar on a house only a couple of streets away about a year later and it was completely knocked back by Council. When we pushed back to ask why, we were told it should never have been approved as is. Sometimes the approval process includes a bit of luck.
A favourite material we discovered during the process was… Of all the materials, I’d have to say that the Super White Dolomite and the limestone flooring we used were the big hits. We had quite a few potential buyers asking about these items in particular. We have received a number of calls from other homeowners in the area who are looking for a similar renovation, and even the odd call from people who have seen the home and wanted to express how much they loved it.
The most dramatic change was… When we start these jobs, we can often see that the houses have been either abandoned or people have just added and removed rooms and walls over time. So bringing that all back together was really fulfilling for me as an architect. Originally, this house felt like a cold hospital ward when you walked through it, with all these rooms coming off one corridor. Bringing it back to life and making it feel like a home with a heart is something we’re really proud of.
The total cost of the renovation… Being able to do the building himself, and their own interior design meant the pair could save some money, but they really spared no expense. It was a project that cost approximately A$1.5 million.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.