The Australian capitals experiencing world-class price growth in luxury real estate
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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

By Bronwyn Allen
Thu, Feb 29, 2024 10:14amGrey Clock 3 min

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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RENOVATION REVOLUTION RESHAPES AUSTRALIA’S LUXURY HOMES

High-end homeowners are choosing to upgrade rather than relocate, investing in bespoke design, premium finishes and long-term lifestyle value.

By Jeni O'Dowd
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Australia’s prestige homeowners are increasingly choosing to reinvent their existing properties rather than enter an uncertain property market, fuelling what industry insiders are calling a “Renovation Revolution.”

From heritage terraces to coastal retreats, this shift reflects a deeper change in mindset. Homes are no longer viewed as stepping stones, but as long-term assets worthy of thoughtful investment and personalisation.

“Homeowners are approaching renovation with purpose, balancing lifestyle needs, design aspirations, and long-term return on investment,” says Jodie Cramer, CEO of Andersens, a national flooring and interior finishes company.

“Viewed through this lens, renovating often makes more financial sense than moving. Homeowners with built-up equity are confidently premiumising their space, achieving better returns on capital.”

More than half of Australian homeowners were planning renovation or improvement projects within a year, with many considering structural changes such as reconfigured floor plans, extensions, or even additional levels.

Personalisation becomes the ultimate luxury

For affluent homeowners, renovation is no longer driven solely by financial logic. It is about crafting environments that reflect individual lifestyles, values, and aesthetic sensibilities.

“Home upgrades allow families to customise their spaces,” says interior designer Delena Pitman.

“They’re not always looking to move up the property ladder; they want to make where they are feel more like home. Renovations give people the freedom to design functional, comfortable, and visually inspiring spaces.”

This trend aligns with the broader luxury movement toward intentional living, where design choices prioritise comfort, wellbeing, and enduring quality over short-term trends.

Jodie Cramer

Flooring sets the foundation for luxury interiors

Among the most transformative elements in any high-end renovation is flooring, which establishes the visual and tactile foundation of a home’s design.

“Think of flooring as the canvas for your entire home,” Pitman explains. “Once it’s chosen, everything else — furniture, lighting, window treatments, and accessories — becomes easier to select, and the space feels cohesive and intentional.”

Premium materials such as engineered timber, natural stone and luxury vinyl planks are increasingly favoured for their durability and aesthetic appeal, while softer textures like wool carpet add warmth and acoustic comfort to private spaces.

Continuous flooring across open-plan living zones enhances spatial flow, while darker tones such as walnut or charcoal introduce richness and sophistication.

Designing cohesive, layered spaces

Today’s most successful renovations are guided by a holistic design approach, where flooring, cabinetry, lighting and furnishings work in harmony.

“Change the floor, and everything else either harmonises or clashes — it’s the anchor of your interior design,” says Pitman.

“Once the floor is selected, you can choose wall colours to complement or contrast, coordinate cabinetry and countertops, and adjust lighting to provide bright task illumination or soft mood lighting.”

This layered approach allows homeowners to create interiors that feel both elevated and deeply personal.

Renovation as a strategic property investment

Beyond aesthetics, renovation is increasingly viewed as a strategic investment decision. In prime suburbs and lifestyle regions alike, improving an existing home often delivers greater value than purchasing anew.

This approach enables homeowners to preserve location advantages while enhancing liveability, energy efficiency and long-term capital value.

Whether upgrading a waterfront residence, modernising a federation home, or refining a contemporary coastal retreat, the message is clear: in Australia’s luxury property market, the smartest move is often staying exactly where you are — and transforming it into something exceptional

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