Australian’s richest have done very well through the pandemic, and the boom in the luxury property market proves it

The Sirius building was once social housing. It is now being converted to luxury homes. (Lucas Schifres, Getty Images)
  • Almost $7 billion of luxury property sold in the first quarter of this year, marking a record three months for the property segment.
  • The capital gains have seen luxury apartments prices in Sydney jump by more than $300,000.
  • It marks the Emerald City as one of the most expensive cities in the world on a square metre basis, despite being far larger than many others on the list.
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While 2020 may be a year better forgotten for many, Australia’s rich have plenty to smile about.

The country’s rank of ultra-high-net-worth individuals swelled to 3,124 last year, defined as having a fortune exceeding $US30 million ($40.1 million), according to estate agency Frank Knight.

Its latest report suggests more than 300 individuals joined the exclusive club during the pandemic, buoyed by a roaring local share market, rebounding business confidence, and a property market at all-time highs.

Unsurprisingly, it has been the top end of the real estate market that has traded higher still, as the affluent have both bought up big as well as cashed in on the hot market. Separate Domain data shows that some houses have recently sold for up to $6 million more than they were bought just 12 months ago.

Certainly, the first three months of this year was the busiest on record for the luxury property market – the top 5% of sales – 1,429 homes sold for nearly $7 billion, or an average of $4.8 million each. The Gold Coast was the epicentre of market activity, with 91% more sales than the previous year.

“With many of Australia’s ultra-high-net-worth population currently planted on Australian soil, four of Australia’s major cities saw their second consecutive quarter of highest volume of prime residential sales on record,” head of residential research Michelle Ciesielski said.

“Underlying this pent-up demand, the prestige residential market tends to gain traction with a rallying stock market, so we’re likely to still see significant price growth on the horizon.”

The demand has translated to listings spending less time on market, typically getting snapped up with three months in Sydney and Melbourne.

Luxury apartments meanwhile have enjoyed a 3.2% bump in prices. The segment now costs on average $25,500 per square metre.

The price of Sydney luxury apartments jumped more than 10%, representing capital growth of more than $300,000 in just 12 months.

It ranks Sydney as among the most expensive luxury market in the world, with $US1 million buying less than 50 square metres in the Emerald City. It thrusts Sydney alongside much more tightly-squeezed cities of Monaco, and Hong Kong.

“Developers across the country are continuing to shift their focus towards boutique apartment developments which is addressing pent-up buyer demand, but these smaller projects result in less volume of prime apartments being built over the coming years,” head of residential Shayne Harris said.

As the pandemic forced Australians to spend more time indoors, the rich have gone to extra lengths to find and renovate their ideal home, according to Harris.

“It’s still evident there are limited prestige listings across the country, with many keen buyers now making buying off-market transactions. Many prestige buyers focus on buying in the right location and remodel the home to suit their needs, especially with a focus on wellbeing and lifestyle and this has magnified over the past year.”