The Australian cities where luxury home values have more than doubled
A new property report reveals an ‘unprecedented surge’ in luxury home values as demand continues to outstrip supply
3 min
Australia’s luxury home market is experiencing an “unprecedented surge in prices” due to a limited supply of large homes close to beaches, bays and rivers and strong demand from Australia’s growing high-net-worth population, according to Ray White senior data analyst Atom Go Tian.
The inaugural Ray White Luxury Report reveals luxury homes have risen in value at a much faster rate than median-priced properties across the capital cities over the 10 years from 2014 to 2023. Luxury house prices rose by 84 percent over the decade compared to 70 percent for median-priced houses. Luxury apartment prices soared 58 percent while median apartment prices rose 31 percent.
However, there was a change last year when median prices grew faster than luxury prices for the first time in the decade. CoreLogic analysis shows higher interest rates, which limited people’s borrowing capacity, and rising prices appeared to turbocharge buyer demand in more affordable markets across Australia, with Perth experiencing the most growth among the capital cities in 2023.
Mr Go Tian said some key trends in Australia’s luxury market over the past decade included Brisbane booking the fastest rise in prestige transactions among the major cities, as well as the emergence of the Gold Coast as a “rapidly growing” luxury apartment market. Sydney is the largest prestige market, accounting for 64 percent of national luxury house sales and 51 percent of luxury unit sales.
Interestingly, Australia’s second-smallest capital city – Hobart – recorded the highest luxury house price growth over the decade at 122 percent and the highest luxury apartment price growth at 101 percent.
Here is a summary of the report’s findings on the price growth of Australia’s luxury homes.
Sydney
The luxury house price median is $3.9 million, up 93 percent over the decade, while the median house price is $1.4 million, up 72 percent. In 2023, the suburbs that recorded the most luxury house sales above $5 million were Mosman, Vaucluse and Bellevue Hill. The luxury apartment price median sits at $2.1 million, up 72 percent, while the median apartment price is $794,000, up 25 percent. The suburbs with the most luxury apartment sales above $3 million were Mosman, Darling Point and Pyrmont.
Melbourne
The luxury house price median is $2.5 million, up 71 percent over the decade, while the median house price is $933,000, also up 71 percent. In 2023, the suburbs that had the most luxury house sales above $5 million were Toorak, Brighton and Kew. The luxury apartment price median is $1.3 million, up 51 percent, while the median apartment price is $603,000, up 27 percent. The suburbs with the most luxury apartment sales above $3 million were Toorak, Melbourne CBD and Brighton.
Brisbane
The luxury house price median is $1.8 million, up 103 percent over the decade, while the median house price is $838,000, up 82 percent. In 2023, the suburbs that recorded the most luxury house sales above $5 million were Hamilton, Park Ridge and New Farm. The luxury apartment price median is $1.1 million, up 51 percent, while the median apartment price is $554,000, up 35 percent. The suburbs with the most luxury apartment sales above $3 million were New Farm, Newstead and Brisbane City.
Perth
The luxury house price median is $1.7 million, up 49 percent over the decade, while the median house price is $676,000, up 25 percent. In 2023, the suburbs that had the most luxury house sales above $5 million were Cottesloe, Dalkeith and Mosman Park. The luxury apartment price median sits at just over $1 million, up 15 percent, while the median apartment price is $453,000, up 0.7 percent. The suburbs with the most luxury apartment sales above $3 million were South Perth, North Fremantle and West Perth.
Adelaide
The luxury house price median is $1.6 million, 2.2 times higher than in 2014, while the median house price is over $700,000, up 78 percent. In 2023, the suburbs that had the most luxury house sales above $5 million were North Adelaide, St Peters and Medindie. The luxury apartment price median is $994,000, up 52 percent, while the median apartment price is just under $500,000, up 44 percent. The suburbs with the most luxury apartment sales above $3 million were Dulwich, Adelaide CBD and Glenelg.
Hobart
The luxury house price median is $1.5 million, up 122 percent over the decade, while the median house price is $742,000, up 112 percent. In 2023, the suburbs that recorded the most luxury house sales above $5 million were Sandy Bay, Old Beach and North Hobart. The luxury apartment price median sits at $1.04 million, up 100 percent, while the median apartment price is $564,000, up 102 percent. The suburbs with the most luxury apartment sales above $3 million were Sandy Bay, Battery Point and Hobart.
Darwin
The luxury house price median is just over $1 million, up 18 percent over the decade, while the median house price is just over $600,000, up 5 percent. In 2023, the suburbs that recorded the most luxury house sales above $5 million were Larrakeyah, Darwin City and Palmerton City. The luxury apartment price median is $724,000, down 0.6 percent, while the median apartment price is $388,000, down 12 percent. The suburbs that had the most luxury apartment sales above $3 million were Fannie Bay, Darwin City and Larrakeyah.
As housing drives wealth and policy debate, the real risk is an economy hooked on growth without productivity to sustain it.
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As housing drives wealth and policy debate, the real risk is an economy hooked on growth without productivity to sustain it.
3 minFor decades, Australia has leaned into its reputation as the lucky country. But luck, as it turns out, is not an economic strategy.
What once looked like resilience now appears increasingly fragile. Beneath the surface of rising property values and steady headline growth, the Australian economy is showing signs of strain that can no longer be ignored.
Recent data paints a sobering picture. Australia has recorded one of the largest declines in real household disposable income per capita among advanced economies.
Wages have failed to keep pace with inflation, meaning many Australians are working harder for less. On a per capita basis, income growth has stalled and, at times, reversed.
And yet, on paper, things still look relatively solid. GDP is growing. Unemployment remains low. But that growth is increasingly being driven by population expansion rather than productivity.
More people are contributing to output, but not necessarily improving living standards.
That distinction matters.
For years, Australia’s economic success rested on a powerful combination: a once-in-a-generation mining boom, a credit-fuelled housing market, strong migration and a property sector that rarely faltered. Between 1991 and 2020, the country avoided recession entirely, building enormous wealth in the process.
But much of that wealth is tied to property. Around two-thirds of household wealth sits in real estate, inflated by leverage and sustained by demand. It has worked, until now.
The problem is the supply side of the economy has not kept up.
Housing supply is falling behind population growth. Rental vacancies are near record lows.
Construction firms are collapsing at an elevated rate. At the same time, massive infrastructure pipelines are competing with residential projects for labour and materials, pushing costs higher and delaying delivery.
The result is a system under pressure from all angles.
Despite near full employment, productivity growth has stagnated for years. In simple terms, Australians are putting in more hours without generating more output per hour. The economy is running faster, butgoing nowhere.
Meanwhile, government spending continues to expand. Public debt is approaching $1 trillion, with spending now accounting for a record share of GDP.
The gap between spending and revenue has been filled by borrowing for decades, adding further pressure to an already stretched system.
This is where the uncomfortable question emerges.
Has Australia become too reliant on a model driven by rising property values, expanding credit and population growth?
As asset prices rise, households feel wealthier and borrow more. Banks lend more. Governments collect more revenue. Migration fuels demand. The cycle reinforces itself.
But when productivity stalls and debt outpaces real income, the system begins to depend on constant expansion just to stay stable.
It is not a collapse scenario. But it is not particularly stable either.
Nowhere is this more evident than in housing.
The National Housing Accord targets 1.2 million new homes over five years, yet current completion rates are well below that pace. With approvals falling and construction costs rising, the gap between supply and demand is widening, not narrowing.
Housing is also one of the largest contributors to inflation, with costs rising sharply across rents, construction and utilities. Yet the private sector, from small investors to major developers, is struggling to make projects stack up in the current environment.
This brings the policy debate into sharper focus.
Tax settings such as negative gearing and capital gains concessions have undoubtedly boosted demand over the past two decades. But they have also supported supply. Removing them may ease prices briefly, but risks deepening the supply shortage over time.
That is the paradox.
Policies designed to make housing more affordable can, in practice, make the shortage worse if they discourage development. The optics may appeal, but the economics are far less forgiving.
It is also worth remembering that most property investors are not institutional players. The majority own just one investment property. They are, in many cases, ordinary Australians using real estate as their primary wealth-building tool.
Undermining that system without replacing it with a viable alternative risks unintended consequences, from reduced supply to higher rents and increased inflation.
So where does that leave Australia?
At a crossroads.
The country can continue to rely on population growth and rising asset prices to drive economic activity. Or it can shift towards a model built on productivity, innovation and sustainable growth.
The latter is harder. It requires structural reform, long-term thinking and political discipline.
But it is also the only path that leads to genuine, lasting prosperity.
The question is no longer whether Australia has been lucky.
It is whether it can evolve before that luck runs out.
Paul Miron is the Co-Founder & Fund Manager of Msquared Capital.
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