Wealthy Australians prop up the $10 million-plus property market

DEMAND for houses heading towards the $20 million mark is strong, according to new research.

Local buyers and upgraders the most active in the prestige residential market, a new CBRE survey shows.

CBRE’s Prestige Residential Valuer Insights Q3 2024 surveyed valuers from across Australia who specialise in high-end residential properties.

A total of 40 per cent of valuers reported demand for prestige property as ‘strong’ to ‘very strong’ with 51 per cent reporting ‘moderate’ demand.

SA and WA had the strongest demand while the market was softer in VIC and the ACT.

Valuers reported demand for houses valued up to $10 million and valued between $10- $20 million had the most demand.

A total of 54 per cent of valuers expect house value growth over the next 12 months and 17 per cent of valuers forecast price growth of more than 5 per cent. The highest price growth is expected in WA, SA and NSW.

Head of Prestige Valuations NSW Bader Naaman said: “The strong prices in Sydney are underpinned by the combination of a continued lack of upper-end supply and the return of wealthy overseas purchasers as well as the strong appeal of Australia as a desirable destination in which to invest.

“The resilience of the Sydney prestige market is largely impacted by the inherent scarcity of land across some of the city’s prestigious locations, desirable inner-city areas and waterfront property types have a finite supply.”

Most valuers (51 per cent) expect demand to remain the same in their local prestige markets over the next 12 months while 31 per cent expect to see demand increase ‘slightly’.

NSW and WA are expected to see demand increase the most.

A total of 88 per cent of valuers in VIC expect an increase in listings in the next 12 months while 67 per cent of valuers in NSW also expect an increase.

CBRE’s Head of Prestige Valuations VIC, John Beresford said the market in Melbourne has shown stability and modest house price growth was expected in the coming year.

He said: “The high-end metropolitan Melbourne market has been relatively stable over recent times, although there has been some seasonal softening in buyer demand and some price sensitivity, particularly in the $5 to $10 million range.

“Notwithstanding, valuer expectations are for some modest house price growth in the broader premium housing market.

“Growth expectations for penthouses and likely new home sites are neutral, with the latter still suffering the lingering effects of the 2022-23 spike in building costs, although this construction-cost price growth has stabilised in 2024, which may again drive the desire for ‘dream home’ and speculative builds.”

Looking at apartments, 41 per cent of valuers predict an increase in values in the next 12 months while 52 per cent anticipate prices will remain stable. The highest growth is expected to be in WA and SA.