High-End Properties Feeling the Pressure

While the affordable segment is booming, Australia’s high-end properties are showing signs of a slowdown. The impact of rising interest rates appears to be catching up with the luxury market, traditionally the fastest-growing segment.

Historically, luxury homes have outperformed the broader market, but recent economic headwinds are slowing that trend. As interest rates continue to rise, the growth rate of high-end property prices is decelerating. This shift signals a more cautious approach among buyers in this segment, likely waiting to see how economic conditions unfold before making large investments.

Regional Markets Are Thriving

While Perth stands out as a leader in price growth, other regional markets are also experiencing strong upward momentum. Adelaide and Brisbane are notable examples, with growth rates that are outpacing the national average.

In Brisbane, median house prices are edging closer to the $1 million mark, catching up with larger cities like Melbourne. Unit prices, in particular, are rising faster than house prices in Adelaide and Brisbane, indicating a growing demand for more affordable housing options in these markets as well.

Resilience in Melbourne and Sydney

Despite concerns about declining demand, Melbourne and Sydney continue to show resilience in price growth, although at a slower pace. Melbourne posted the smallest gains of the capital cities but still recorded year-over-year improvements in September. Both cities saw price rises of at least 0.2%, defying fears of a market slowdown.

Ray White has noted a decline in auction activity in these cities due to fewer active bidders and more properties on the market. However, prices remain steady for now, suggesting that while demand may be softening, the supply shortage is helping to keep prices stable in these key markets.

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