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Australia’s luxury homes have outperformed the market!

Dear Fellow Property Investor,

Did you know that over the past decade, luxury houses have experienced a far stronger rate of growth than the rest of the market?

Median priced houses have increased by 78 per cent. In comparison, houses priced in the top five per cent have doubled. A luxury house has been a good investment over the past decade. Will this strong performance continue?

Australia’s luxury homes have outperformed the market!

A big driver of luxury house price growth is simply land value. There are only so many properties you can build in our most expensive suburbs, which tend to be located close to beaches, bays and rivers. Anything with even more unique characteristics that are hard to replicate, such as a view or close proximity to the water, are likely to have increased even further.

Another driver has been renovation activity, which surged during and immediately after the pandemic. Luxury homes have become even more expensive over time as more investment has taken place. And while it is not possible to measure, it is likely a higher proportion of well located luxury homes have been renovated than the rest of the market and almost certainly true that more has been spent on them.

A greater concentration of wealth has also likely increased prices. A recent report from Oxfam has found that the wealth of Australia’s richest people has increased at a rate of 1.5 million per hour since 2020. A lot of this wealth has been invested in luxury homes around Australia.

While luxury homes have outperformed, they have also exhibited a lot more volatility in price growth. During the pandemic, they increased far more than more affordable properties. But they also saw a much greater decline in 2022. Timing the purchase of a luxury home appears far more important than it does for buying one closer to the median.

Units have also outperformed, showing a switch in the way that wealthy people want to live. Historically, the majority of apartments built in Australia have been aimed at people that could not afford a house. As such, many of them were seen as a stepping stone to buying a house. Now there is growing demand for luxury apartments and the gap between the median and the most expensive has grown as quality has improved.

Luxury apartment market

Will this outperformance continue? The Federal Government Housing Accord seeks to build more homes within established suburbs. However, it is likely that most of them won’t be built in our most expensive suburbs. Owning a luxury house or apartment in our most expensive suburbs is set to continue to be a solid investment over the next decade, providing of course you can afford to buy one in the first place.

Let me ask you something…

Do you have a game plan for 2024? 

Or will you watch savvy, educated, market-ready investors snap up all the bargains at the bottom of the Melbourne property cycle (which in my opinion by the way has already bottomed out in November 2022), 

Or will you join them? 

So, what are you waiting for? 

Reserve your place and join me and 55 like-minded property investors for the first Real Estate Investing Fast Track Weekend for 2024!

Click HERE to reserve your seat now!

Investors Prime

Interested in learning more about property investing in Australia? Please visit our main website InvestorsPrime.com.au for loads of free resources, articles, videos and more to help you on your investing journey.

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