Knight Frank has released its Australian Prime Residential Review for Q4 2021, which indicates Australia’s major cities are performing exceptionally well within the world’s prime residential market.

Despite the strong performance, Australia’s cities sit below the prime global average, a reflection of the current resilience and strength of luxury property around the world.

The volume of sales in Q3 for 2021 was tallied at 1,971 prime properties, which Knight Frank says is the second highest quarter on record. While 1.4 percent lower than Q2, the recording was up 119 percent over the year ending in September 2021. The Gold Coast is home to the biggest rise in prime annual sales for 2021 with 156 percent, with Brisbane coming in at second with 135 percent growth.

Prime properties were on the market for an average of 105 days in Q3 2021, in comparison to 114 in Q2. Over this time, Gold Coast prime properties were on the market 19 days less on average, the most reduction across Australia.

Capital growth across Australian prime property increased by 1.5 percent in Q3 2021, and a total of 9.1 percent over the year ending September 2021. This sits just below the global average of 9.5 percent annual growth. Sydney, the Gold Coast and Perth were above the global average, sitting at 10.7, 10.5 and 10.4 percent respectively. Brisbane ranked fourth at 8.4 percent, with Melbourne coming in at fifth with a total capital growth of 6.5 percent. Knight Frank Research forecast Australian prime prices to increase a total of 11 percent by the end of 2021 and a further 8 percent in 2022.

In terms of relative value for Q3 2021, one could buy 87 sqm of internal luxury floorspace in Australia for US$1 million, 124 sqm in Gold Coast, 111 sqm in Brisbane, 102 sqm in Perth, 88 sqm in Melbourne and 44 sqm in Sydney. In comparison, this floorspace is limited to 31 sqm in London and 21 sqm in Hong Kong.

Rental growth was up 2.1 percent for prime properties across Australia in Q3 2021. Over the past year, rental growth increased by a total of 5.2 percent. In Perth, annual rental growth was recorded at 11.8 percent, the most escalation across all Australian cities.

A total of 26,700 medium-and high­ density new apartments and townhouses were completed in Australia's prime regions in 2020. This was 4 percent below the amount completed in 2019, but above the 3-year average of 26,425 new apartments and townhouses. Compared to 2020, there are 42 percent less apartments and townhouses forecast in 2021, with 15,550 currently under construction.

In 2021, the greatest distribution of new apartments and townhouses were found in Melbourne (7,450), Sydney (2,825) and the Gold Coast (2,250). This is followed by Brisbane (1,850) and Perth (1,175).

Australian new prime apartment prices have increased 3.2 percent in 2020 to an indicative $25,500/sqm; to range between an average of $13,000/sqm and $65,000/sqm. Sydney saw the greatest rise in new prime apartment prices over this time with 10.6 percent, followed by the Gold Coast with 10 percent.

To read the report in full, click here.

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