Whether it’s a penthouse with breathtaking views of the Sydney Opera House, an opulent Toorak mansion or a luxury lifestyle estate in Brisbane, house-hunting at the top end of the market comes with an enviable array of choices. When money isn’t a problem, there is no shortage of stunning homes with endless features to tempt the very wealthy.
According to Westpac’s Prestige Property Report, over the past two decades to 2023, the number of $5 million-plus sales has surged more than twelvefold. Premium sales peaked in 2021 with a record 3,845 transactions. This has since steadied but there remains high demand for luxury homes.
So, who is buying and where are they purchasing?
Let’s look at what is driving the top end of the market.
How do you define prestige property?
With even a typical suburban home in Sydney now selling for more than $2m, defining what makes a prestige property can be tricky.
LJ Hooker Head of Research, Mathew Tiller, said every State and Territory has different criteria for what makes a high-end listing. It is typically defined by price thresholds that vary from market to market, with some areas classifying it as $10 million and above, while in others, it can be as low as $5 million.
“Typically, it is homes in the top 25th percentile but what properties are deemed high-end can vary even within markets,” Mr Tiller said.
“For instance, in a suburb like Double Bay where sales above $10m are not uncommon, a home worth $5m is probably not going to be considered as ‘prestige property.”
A nine-bedroom penthouse in the One Sydney Harbour Project in Barangaroo is believed to hold the Australian home price record when it reportedly sold for $140m five years ago.
This price may have recently been eclipsed by a Toorak mansion rumoured to have fetched as much as $150m. The stately residence known as ‘Coonac’ is set on 1.09ha - which is one of the largest parcels of land within the prestigious blue-ribbon suburb. Domain reported the sale price may have been closer to $115m, however, it created a new Victorian property record. It beats the reported $88 million sale of Toorak’s iconic ‘Ghost Mansion’ back in August 2023.
Several other high-end sales have been recorded over the past three years with strong demand for prestige listings. Last October, a beachfront mansion on New South Head Road, Point Piper, reportedly sold for $130m, making it one of the NSW’s most significant sales.
Brisbane’s most expensive home is believed to be a private 3035 sqm luxury estate in Ascot, which reportedly changed hands for $23m in November. In Adelaide, an estate in Unley Park also set a new city record last year, reportedly selling for over $10.5m.
A waterfront estate on Howrah Point ranks among Tasmania’s top sales, achieving $8.533m in 2022. Also selling the same year, a palatial Canberra home with views of Mount Ainslie, which fetched $9m and a new record was set in Darwin with the sale of Fannie Bay home for $8.5m.
What else makes a prestige property in Australia?
Location is key to any real estate sale, and prestige properties tend to occupy exclusive vantage points, particularly those with ocean or beach views.
According to Westpac and CoreLogic, 66.5 per cent of Australia’s $5m+ sales in 2023 were in Sydney, with the Woollahra LGA accounting for 22 per cent of these high-end sales. This includes waterfront suburbs such as Bellevue Hill, Vaucluse Double Bay, Rose Bay and Watsons Bay.
Agent Kerrie Robertson from LJ Hooker Lane Cove said buyers are also happy to pay for a view of the Sydney skyline, particularly one that includes the Harbour Bridge.
But it is not just a jaw-dropping outlook that makes a property coveted. Analysis of the top 30 suburbs accounting for the most $5m property sales also found that most were located 10km from a capital city CBD.
Freestanding homes last year accounted for 87 per cent of high-end sales, with homes on generous parcels of land attracting premium prices.
“On the Lower North Shore, many prestige properties tend to be these beautiful older architecturally designed homes on large blocks with pools, the streets are wide, and they are close to the ferries to the city and top schools,” Ms Robertson said.
“They tend to tick quite a few boxes with families looking to upgrade.”
What key features do prestige buyers want?
Principal of LJ Hooker Double Bay, Aaron Del Monte, has been lucky enough to visit many of Sydney’s most luxurious residential properties and says they live up to the hype.
“There are houses with bowling alleys, tennis courts, built-in ice baths, sauna rooms - you name it – these places have it,” he said.
“There is a big demand for these types of homes that have everything. If anything, people are moving towards these kinds of features, especially in new builds or major renovations. The things that people are adding these days are just incredible.”
Developers are also including these impressive features in high-end apartment complexes to appeal to wealthy downsizers. This includes world-class gymnasiums, pilates studios, private dining areas and even wine-tasting rooms.
"They are doing this in these prestige developments because that is what people want in their houses, so people are buying into them for the lifestyle,”
Mr Del Monte said.
Who is buying prestige property?
Rising interest rates last year caused a slowdown in other prestige markets around the world, however, Australian prices have remained strong partly due to immigration.
Many ex-pats as well as international high-net buyers see value in our property market. Some people want to purchase with plans to relocate, while others see them as an attractive investment.
“The Australian dollar is always priced a little bit lower, so when the price is converted, it is still expensive, but it is seen as good value,” Mr Del Monte said.
“If you look at the money people have made on top-end properties in the Eastern Suburbs over the past couple of years, the rental yield hasn’t been great, but the capital growth on some of those assets has been next level.”
What is the forecast for the prestige property market ahead?
During a typical housing cycle, the prestige market leads, followed by more affordable markets. And while sales peaked in 2021, this sector continues to be a steady performer in Australia.
Mr Tiller said prestige property sales have been influenced by the share markets globally, which have recorded buoyant gains over the past 12 months.
“In general, property prices have been up for around 18 months, and that has also helped this end of the market as wealthy buyers tend to have several assets and this boosts their overall net worth,” he said.
“High-end buyers don’t tend to be impacted so much by interest rates. However, there is some vulnerability in the performance of the overall broader economy, so if everything remains stable, there should continue to be strong demand in the year ahead.”
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
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