Perth luxury market ‘gearing up’ for growth

Luxury property market prices in Perth are expected to soar in the second half of 2022, according to experts.

Knight Frank’s The Wealth Report 2022 revealed Perth came in at number 31 on the Prime International Residential Index (PIRI 100) in 2021 and is tipped climb the rankings further.

Perth’s luxury property prices are forecast to jump six per cent this year.

Mack Hall, of Mack Hall Real Estate, said Perth’s luxury residential market had strengthened in recent years and still had plenty of growth to come. 

“If you look at how the city’s luxury market compares to other Australian cities, it’s evident that it is really only just gearing up, with big scope for further growth in the future,” Mr Hall said.

“Now our borders have reopened to the world we have started to see greater visitor arrivals and more interstate and overseas investors looking for opportunities, which will equate to greater demand for luxury residential property. 

“The wealthy are attracted to Perth due to the city’s relative affordability to east coast cities, especially for living near the water, as well as outstanding lifestyle, including its balmy climate.”

Perth prime prices rose 10.5 per cent last year, coming in behind Sydney (ranked 17 with 16.2 per cent growth) and Brisbane (ranked 29 with 11.2 per cent growth).

But it came in ahead of Melbourne at number 39, with 9.4 per cent growth.

The amount of internal luxury floorspace US$1 million can buy in the city has fallen below 100sq m to 98.4sq m, with the same amount securing 84.3sq m of space in Melbourne and 41.4sq m in Sydney 

On the City Wealth Index, which assesses where the wealthy prefer to live, spend time and invest, Perth was ranked 67, which was the last of all the cities in Australia, but it was a significant improvement on 2021 when it was ranked 74. 

The number of ultra-high-net-worth individuals in Perth rose 10.5 per cent in 2021, and is expected to grow 23 per cent by 2026 to reach 2,408, up from the current 1,961.

Knight Frank Head of Residential Asia Pacific Victoria Garrett said Perth was again attracting many wealthy people from South-East Asia in particular. 

“Our clients across South-East Asia have welcomed Western Australia’s border reopening and many still desire to purchase residential property in Perth,” Ms Garrett said. 

“They find the prime luxury price point attractive over other Australian cities, and it’s a short flight home and within the same time zone, making it easier to do business. 

“Due to the Australian foreign investment framework, our non-resident clients are restricted to buying new homes and there simply hasn’t been enough built in Perth’s prestige locations in recent years. 

“With more apartment projects earmarked with high-end luxury amenities, this will be attractive not only to international buyers but those domiciled in Perth as travel is again on the agenda – and they can easily lock-up-and-leave.”

According to Mr Hall, the riverside suburb of Applecross, south of the city, is expected to be one of the top-performing luxury markets in the next few years.

“This affluent suburb will continue to be highly sought after by buyers,” he said.

“Not only is it close to the CBD, with good connectivity to three world-class universities, top private schools and other amenities including shopping centres, but it is picturesque,” he said.

“Applecross attracts both local and international families, drawn to its combination of proximity to Perth’s urban action and quiet suburban allure. 

“This ongoing regeneration will introduce more high-density living, with well-appointed apartments starting from $1.1 million.

“Houses in Applecross start from $2.4 million, putting it among the ten highest-priced suburbs in Perth.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.