Sydney luxury home prices set to rise as new homebuilding reshapes city skylines

18/03/2024 |

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Sydney’s luxury housing market is tipped to have some of the strongest price growth in the world this year after supply shortages held back sales in 2023.  


The latest Knight Frank Wealth Report predicts luxury residential prices in Sydney will rise by 5% in 2024, the strongest growth of all the Australian capital cities, and the fifth strongest growth globally.


Auckland is predicted to have the strongest luxury residential price growth in 2024 of 10%. 


Knight Frank partner Erin van Tuil said owning a slice of Sydney Harbour real estate remains a popular investment for ultra-high-net-worth individuals given the limited number of waterfront locations.  


“Whilst volumes have dropped for Sydney’s prime residential market, values have not, demonstrating once again that Sydney remains a popular location to live and invest for high-net-worth individuals and ultra-high-net-worth individuals,” Ms van Tuil said. 


She said Sydney also remains competitive as a global city for international investors in terms of bang for buck, with every US$1m buying around 43sqm of prime property in Sydney, compared to 34sqm in New York, and 33sqm in London and 22sqm in Hong Kong.


“The fundamentals of the Sydney market, such as lifestyle, transparent government and taxes and the sheer beauty of living in the Harbour City are unlikely to change, and therefore Sydney’s popularity is likely set to remain.” 


The report found luxury home prices rose 5.2% in Perth; 4.1% on the Gold Coast; and 2.7% in Sydney during 2023. 


Cashed-up downsizers and other homebuyers have been flocking to high-end apartments, trading in the traditional family house for the inner-city lifestyle and convenience.   


PropTrack senior data analyst Karen Dellow said new home developers were increasingly focusing on the luxury apartment market as the cost of construction continued to rise. 


“There is an increasing market for high-end apartments, as cashed-up couples with no children and downsizers want to live a low-hassle lifestyle without foregoing luxury,” she said.


“To cater to these cohorts, developers are creating developments with hotel-style concierge services to manage dry cleaning and dog walking and adding amenities such as home cinemas, wine cellars and restaurants.”  


Despite the higher price tag associated with luxury apartments, the market remains robust, with both demand and prices continuing to rise. 


Property developer Aqualand has seen these trends play out at its Aura luxury apartment project in North Sydney.  


The Woods Bagot-designed project is currently under construction and due for completion mid this year, offering 371 high-end apartments and premium amenities located 3km from the CBD. 


Aqualand head of sales and marketing Alex Adams said Aura’s strong sales were a positive sign for the broader luxury apartment market in Sydney.   


“We’ve seen a breadth of sales across all apartment types at Aura buoyed by major public domain improvements, transport development and the robust growth potential of North Sydney more broadly,” he said.  


“The majority of sales have been from buyers from the lower and upper north shore with buyer activity led by owner-occupiers and downsizers.”  


The $1 billion dollar project has one-, two-, three- and four-bedroom homes that are located next to the new Victoria Cross metro station, which is set to open in June 2024 in the centre of North Sydney.  


Luxury apartment activity has grown over the past year, with more people searching for new high-end homes.  


The number of views per property listing for new luxury apartments worth $4 million or more nationally was 6.7% higher in January than a year ago, according to PropTrack, while enquiries for large luxury apartments have also skyrocketed.


Developers have been shifting their focus to more premium apartments as well, with the number of active listings for premium apartments worth $4 million or higher up 37% during the same period.  


In January, almost a third of all apartments listed on were listed for sale for $1.5 million or more – well above the latest national median unit value of $626,000.