Australias Luxury Residential Real Estate Market: Why Prestige Properties Are Defying Gravity

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There are some interesting big-picture generalisations I’ve heard over many decades in the property sector. They can help everyday folks understand property fundamentals like “Location! Location! Location” or “Time in the market beats timing the market”.

These truisms are great introductory real estate rules for the average buyer. Still, once property becomes central to your professional and personal life, you begin to understand that the market is actually a complex machine. There are market moves that seem outside of conventional wisdom. 

And we're seeing this illustrated in capital cities across the country right now.

I’m talking about the way prestige and ultra-prestige property priced $10 million-plus is running its own race, almost entirely beyond the usual influences that drive prices in the broader markets.

A great example is the home known as Monkton in Bellevue Hill, NSW. This designer home sold in 2023 for $30 million dollars. Just 18 months later, it resold for an impressive $43.5 million. That’s an astonishing 45 per cent increase that equates to an uptick in value of $1.25 million per month.

So, why are big-dollar properties like this and so many others able to thrive while cheaper homes remain subdued?

Why prestige breaks the mould

There are several reasons why luxury homes perform differently from the rest of the market.

For many buyers in this sector money is no object. At this top end of the market, purchasers can satisfy their emotional whims without fiscal fear. They're generally not stretching themselves financially or making careful calculations about whether they can afford an extra $100,000 on the purchase price. If they love it, and the property ticks their boxes, they'll pay what it takes to make it theirs.

Additionally, buyers at this level aren't generally concerned about interest rates. Purchasers have a high income generated by business ownership or C-suite remuneration. Whatever the reason, they're usually well-off and have little need for borrowing funds. Many are also sophisticated investors in their own right and have been building generational wealth beyond their regular work dollars.

There's also new money playing into the equation. Entrepreneurs who've sold their businesses, tech founders who've exited successfully, and professionals who've amassed significant wealth through careful investing are all entering this market with serious buying power.

Many buyers are international citizens of the world too. Sometimes it's expats looking to return home after a stint working overseas and cashing in. They've spent years in London, New York or Singapore, earned top-tier salaries in foreign currencies, and are now ready to plant roots back in Australia with substantial savings behind them.

Sometimes, it's high-net-worth immigrants who want to leave their mark on the planet. They're looking for statement homes that reflect their success and provide their families with the Australian lifestyle they want.

Whatever the reason, the small-scale domestic drivers that dictate price in more common property price points don't tend to influence the buying decisions of high-net-worth homebuyers. They're not worried about the next interest rate move or whether the market might dip by five per cent. They're focused on lifestyle, legacy and locking in the right property.

Compounding the issue is that in many instances, sellers are also very relaxed about the disposal of their property. Sure, like other price points, these sellers aren't immune to situations that require the quick disposal of their real estate. But suppose they have a unique home that will appeal to a very particular type of buyer with deep pockets. In that case, these sellers can often afford to wait for that emotional connection that ensures a premium price outcome.

Premium property buyers aren't motivated by mortgage stress or urgent relocation timelines. They're strategic, patient, and prepared to hold out for the right buyer who truly appreciates what they're selling. For example, Aussie Home Loans founder John Symond listed his Point Piper mansion Wingadal for sale last year with price expectations of over $200m – but has rejected offers until he gets a price he is happy with.

A different approach

Buying property in this market can be fraught for several reasons, and it's why utilising a buyer's agent experienced in the sector is essential.

1. It's tough to value accurately

Assessing the likely sale price of a home when the ultimate buyer doesn't worry too much about price can be a nightmare – especially as homes at these price levels tend to be unique. Finding solid comparable sales is hard. The sales themselves are rare, so there aren't always several recent ones to rely on. Also, because they're unique, comparing like with like is a challenge.

Was that $8 million sale comparable to the one you're looking at, or was it influenced by specific features, a motivated seller, or a particularly emotional buyer? Without deep market knowledge and relationships with selling agents, it's almost impossible to know.

2. Negotiation pace changes rapidly

Sometimes homes at this level sit available for purchase for months on end, and then, suddenly, it seems like three buyers want them at once. The market can go from quiet to frenetic in a matter of days.

Agents at this upper price point have a special understanding of what it takes to sell one of these homes. They know how to play the game to get the seller what they want, be it price or conditions. To that end, being a buyer looking after your own interests is challenging.

Instead, having a skilled buyer's agent on your side is invaluable. We understand the rhythms of this market, we can read the signals, and we know when to act and when to hold back.

3. The parties are busy

Property buyers and sellers at this price point are typically high performers who have numerous demands on their attention. They don't need to get caught in the weeds of negotiation or price – they just need to be present at the pointy end of the decision-making process.

Time is their most valuable asset, so they want someone who can handle the detailed legwork, vet properties properly, manage due diligence, and only bring them in when it's time to make the final decision.

4. There are a lot of off-market sales

Sellers and buyers often prefer to be discreet and operate outside the usual marketing process. If you haven't got a representative on the inside like a buyer's agent, you're already on the back foot.

It's a relationships game at this level, with selling agents and buying agents knowing each other well. The best opportunities never hit the public market – they're traded quietly between trusted professionals who understand their clients' needs and can match buyer to seller discreetly.

The prestige property market operates in its own universe, driven by forces that have little to do with interest rates, lending criteria or mainstream market sentiment. It's a market shaped by wealth, emotion, lifestyle aspirations and international capital flows.

For buyers looking to enter this space, going it alone is a risky proposition. You need someone who understands the nuances, has the relationships, can accurately assess value in unique properties, and knows how to negotiate at a level where conventional tactics don't always apply.

A buyer's agent experienced in prestige property isn't just helpful, they're essential. We've seen it all, we know the players, and we understand what it takes to secure exceptional properties in a market that plays by its own rules.

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