2022-10-13-莱坊-Australian_Prime_Residential_Review_Q3_2022_11页_4mb

Australian Prime Residential Market Review - Q3 2022

Core Content Summary

The Australian prime luxury residential market has shown resilience and distinct performance compared to the mainstream market, particularly in Q3 2022. While the mainstream market experienced a decline in sales volume and a slight drop in median prices, the prime market continued to grow, driven by strong demand from ultra-high-net-worth individuals (UHNWIs) and limited supply.

Main Market Trends

• Sales Volume:

  • Prime luxury residential sales increased by 9.8% in the June 2022 quarter, with an annual growth of 27.1%.
  • Brisbane saw the highest annual growth in prime sales volume at 56%, followed by the Gold Coast at 53%.

• Days on Market:

  • Both mainstream and prime markets recorded historic lows in days to sell, with the prime market averaging 68 days in June 2022.
  • Brisbane had the biggest reduction in days on market, down by 12 days from the previous quarter.

• Capital Growth:

  • Prime residential prices grew by 0.2% in the June 2022 quarter, with an annual growth of 8.8%.
  • Gold Coast had the strongest annual price growth at 15.4%, followed by Brisbane at 8.9% and Sydney at 9.9%.

• Rental Performance:

  • Gross rental yields for prime residential properties increased slightly to 2.60%, with the Gold Coast leading at 3.50%.
  • Annual rental growth for prime properties was 9.1%, with the Gold Coast performing best at 20.2%.

Key Drivers of the Market

• UHNW Population Growth:

  • Australia's UHNW population grew by 10.1% in 2021, and is projected to grow by 30.9% over the next five years.
  • UHNW population growth was highest in the Gold Coast at 15.0% and Sydney at 10.2%.

• Inflation and Monetary Policy:

  • Inflation has been a significant global and local headwind.
  • The Reserve Bank of Australia (RBA) has been raising interest rates, with the official cash rate increasing to 2.60% in October 2022.

• Business Conditions:

  • Business conditions fell to +10.5 index points in June 2022, down from +12.8 in December 2021.
  • New private business investment grew by 1.4% in the year to June 2022.

• Company Profits:

  • Company profits rose by 5.4% in 2021 and are forecast to increase by 17.1% by the end of 2022.
  • Profits are expected to fall by 6.4% in 2023 and recover slightly by -0.3% in 2024.

• Stock Market:

  • The Australian stock market saw a decline of 12.6% in Q2 2022, with an annual performance of -10.2%.
  • Forecast for the end of 2022 is -2.2%, followed by 6.5% growth in 2023.

Market Outlook

• Capital Growth Forecast:

  • Prime residential prices are expected to grow by 4% by the end of 2022, with steady growth in 2023 and a 3% increase in 2024.
  • Sydney is forecast to see 5% growth in 2022, followed by 4% in 2023 and 3% in 2024.
  • Brisbane is expected to grow by 4% in 2022, 2% in 2023, and 4% in 2024.
  • Perth is projected to grow by 3% in 2022, 1% in 2023, and 2% in 2024.

• Rental Growth Forecast:

  • Gross rental yields are expected to remain stable, with the Gold Coast likely to maintain its lead.
  • Rental growth is projected to be 4% in 2022, 3% in 2023, and 3% in 2024.

Key Cities Analysis

Key Insights

• The prime market is less affected by the broader economic slowdown and has shown consistent growth.
• The Gold Coast stands out for both price and rental performance, indicating strong investor interest.
• Limited new construction and high demand are contributing to continued price appreciation and short selling periods.
• The market is expected to stabilize in the coming years as growth rates moderate, influenced by inflation, interest rates, and supply constraints.

Conclusion

The Australian prime luxury residential market remains robust, outperforming the mainstream market in both sales and price growth. With a growing UHNW population and limited supply, the market is expected to continue its upward trajectory, albeit at a slower pace, as the economy adjusts to new conditions.