Unlike the broader real estate market, the prestige property market isn’t impacted by the same level of market forces – even at a time with significant changes to rates, there just aren’t enough prestige homes to go around to meet buyers’ demand.
Demand still high for prestige property
Across 2021, prestige property prices increased – those in the market for this calibre of home continued to expand their property portfolios and continued to drive demand for homes that go above and beyond the norm – the exact properties that Mercer & Cooper specialise in.
Supply chain issues continue weighing on supply
With the onset of Covid and its global impact, developers of luxury, prestige properties faced significant disruptions to their supply chain and less sites to develop for prestige residential purposes, keeping the percentage of homes limited compared to ready buyers. While the construction industry overall is normalising again, it will be some time until we see “business as usual” for developers of premier properties, so we’re likely to see demand increase across the rest of 2022 and 2023.
The Gold Coast Prestige Property Market projects strong growth
So, where in Australia are we spotting the fastest growth in prestige property? It’s no surprise to Mercer & Cooper founder, Bernice Cooper, that it’s the Gold Coast.
“Not only is the Gold Coast firmly establishing itself as a flourishing city, but it combines the best of a resort lifestyle with all the conveniences of somewhere like Brisbane or Sydney,” she tells us, “In our hyper-local region for prestige property sales and purchases, the Northern Gold Coast, this is even more evident – sought after suburbs are seeing super fast clearance rates for prestige properties, and this just isn’t slowing down. When you combine those lifestyle factors with that something extra that prestige property has to offer, you don’t see the usual patterns of ups and downs in the market as the wider industry.”
Ranking at the top in property price increases for “prime property” (which means the top 5% of properties in a market), 2021 saw a 17.1% rate of growth, so the Gold Coast now sits at #12 in cities around the world – right below Jersey and above the Cayman Islands. To give it further context, Sydney is ranked 17th out of the global cities – a city where, just a few short years ago, it would have been commonplace to consider price growth sitting well above the rest across Australia.
What else is at play?
Consistent growth is key here, with the wider real estate market also seeing a drop and then rebound post-2020. So when it comes to human behaviour, what else is at play here?
The ultra-wealthy, and those who are likely to have significant existing property portfolios, certainly weren’t able to continue their usual spending patterns across the pandemic, especially in relation to travel and other lifestyle outlets like fine dining, entertainment and even luxury shopping in-person.
So, with all those extra dollars, it made sense to put their additional funds into further prestige properties. Globally, prestige buyers continue to see Australia as a highly coveted location to have a home (whether for holiday or investment purposes). Another key factor is that prestige property buyers often are looking for additional homes to expand their portfolios, so they aren’t always putting other properties on the market, meaning new homes are quickly being snapped up.
If you are interested in knowing what your prestige property is worth, get in touch with the team at Mercer & Cooper today. At the moment, we are also offering a complimentary property appraisal, so stay in the know and get the relevant market information from the experts in all things prestige.
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