Everybody knows that despite the negative impacts of the global pandemic, property prices continue to rise nationally, albeit slower than last year. In 2021, the prestige property market also enjoyed increased demand for many of the same reasons as the general property market, but also due to some unique factors too.
Unable to go abroad, unable to go to work (or school), many of us found ourselves spending more and more time at home. More time spent working, playing and living all in one location could only drive the demand for homes that offer more. Previous lifestyle factors like frequent international and interstate travel meant that a bright apartment or end terrace might no longer suffice. Now, however, the successful business owner with a love of tennis has more reason than ever to find a property with a tennis court (or space to build one). If you’re under curfew and can’t go to the beach, a pool is now a hot commodity!
The restrictions caused an increase in demand for better quality properties. During a pandemic (we now realise), these include homes with large amounts of space, close to the outdoors, or have outdoor areas. Houses that you want to spend a lot of time in. This also explains why over the last two years houses saw a much larger increase in property values than apartments, as – who wants to be cooped up in a unit – however nice.
The pandemic increased demand as well as the volume of prestige homes that now exist. More and more homes were built with extra facilities, space, and amenities considering what an ongoing pandemic might mean. There was and continues to be a considerable investment in renovations, as Australians – unable to leave and spend their money in foreign lands, were naturally motivated to spend their earnings improving their homes, and so they did.
Of course, many prestige property buyers come from overseas, especially from China. But this is looking to change. As border restrictions have come down and international travellers are returning – so will foreign buyers.
Australia is the number one country chosen by the world’s migrating high net worth individuals – i.e having over $AUD1.35 million+ in net assets. We expect them to return and only add more support to the prestige property market.
Whilst local buyers have had an advantage to date, this is now changing as foreign buyers return. Whilst the future is never certain, and the market is slowing but still increasing, 2022 will likely see continued increases and demand for truly prestigious property.
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