Market Trends of Australia Luxury Residential Real Estate Industry
Ultra High Net Worth Population Driving the Demand for Prime Properties
- Australia's luxury real estate market performed exceptionally well during the base year, particularly in the smaller cities with lifestyle offerings. The UHNW population is spreading across Australia, with growth outside the country's four major capital cities expected to be 13.4% in 2021 as opposed to 8.1% in the major cities. For the following five years, this tendency is anticipated to continue, with outside the four major cities seeing growth of 38% and within 26%.
- However, Melbourne is expected to experience the most significant growth over the following five years, with a predicted 34% increase to 4,968 UHNWIs residing there in 2026. Sydney led the country with the largest concentration at 25% in 2021, with 5,244 UHNWIs living in the city. With many UHNWIs planted on Australian soil during the pandemic, they bought homes for the next generations.
- However, the supply of luxury apartments and townhouses slumped in 2021 as developers across the country looked forward to lowering their risk by building small boutique apartments instead of high-rises. Therefore, few properties are in the pipeline to meet the demand of ultra-wealthy people, who tend to buy up rather than sell out to buy another property. It has also led to an average national luxury home price rising 2.9% yearly.
Understand The Key Trends Shaping This Market
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Home Automation Becoming a Basic Requirement for Luxury Homes
- The rise of smart homes is leading buyers to actively look for developments, allowing them to control their homes from their devices. The trend of smart homes is on the rise, and due to this, the Internet of Things (IoT) has become a basic requirement for luxury home buyers. Smart appliances connected through a home network are entry-level for some Australian smart home customers. The Australian population is on the rise. With unprecedented growth in technology, more home buyers are seeking homes that feature technology that will help to automate their everyday lives.
- Kitchens are predicted to be operated through technology and linked to smartphones that can monitor cooking times and adjust temperatures remotely. Smart security is another budding industry, with smart alarms and surveillance systems becoming more convenient and easier to control. The trend toward home connectivity is also compounded by the rising popularity of internet-connected devices such as Google Home, Alexa, and Amazon Echo in Australian homes. It is a trend that luxury home developers can no longer ignore.
