Perth tops Australia’s luxury property amid tight global conditions
While the price of luxury properties in Perth and Brisbane surged during the 12 months ending March 2025, the growth rate has slowed in recent months due to ongoing global economic uncertainty.
Knight Frank’s Prime Global Cities Index (PGCI) Q1 2025 has named Perth as Australia’s top-performing luxury property market, with prices rising 3.8 per cent in the 12 months to March.
The firm’s report tracked the movement of prime residential prices across 44 cities worldwide and showed that Perth placed 16th for growth globally over the 12 months to the end of March 2025.
Over the period, the Asia-Pacific and Middle East continued to dominate for luxury property price growth, with Seoul posting the highest growth of 18.4 per cent, followed by Dubai’s 16.4 per cent growth, and Tokyo’s 15.5 per cent rise during the 12 months to the end of March 2025.
The City of Light’s 3.8 per cent growth registered slightly above the 3.4 per cent increase recorded in San Francisco, but fell slightly short of the 3.8 per cent rise in India’s National Capital Territory of Delhi.
At the opposite side of the country, Brisbane recorded Australia’s second-highest growth over the same period, with a 2.8 per cent increase to luxury property prices that put the River City in 18th place.
The data showed that Perth and Brisbane recorded growth either at or above the 2.8 per cent average annual growth recorded across the 44 global cities over the 12 months to the end of March 2025.
Contrastingly, the Sydney and Melbourne markets saw a fall in luxury residential prices over the 12 months to the end of Q1 2025, registering declines of 0.7 per cent and 2.1 per cent respectively.
Associate director at Knight Frank’s Australian partner McGrath Estate Agents, Adam Ross, said that the “slight uptick” in luxury properties on the Australian market over Q1 2025 forecast favourable economic conditions for the remainder of the year.
“We’re likely to see ongoing sustainable price growth of prestige homes across most cities for the remainder of 2025, particularly with heightened expat activity as they benefit from the currency exchange,” Ross said.
Luxury price growth slows across the globe over Q1 2025
Over the past three months, luxury residential price growth has receded in Sydney, Melbourne and Perth, with Brisbane’s minor increase of 0.1 per cent over the period marking it as the sole Australian city that is most recently in positive territory.
This recent lull in national luxury property price growth occurred simultaneously as a broader global slowdown for the sector, with the 2.8 per cent average annual price growth across the 44 cities marking a marginal slowdown from the 3.2 per cent recorded in Q4 2024.
Although the global luxury property market has now recorded two years of positive growth and seen continuing recovery after the trough of 0.6 per cent in Q1 2023, Knight Frank said that current momentum remains “modest and uneven”.
Even though luxury property in the surveyed cities rose 0.8 per cent quarter-on-quarter, which was the strongest showing since Q2 2024, Knight Frank noted that wealth-driven purchases and limited supply are sustaining price growth, but also being broadly affected by global economic uncertainty.
Knight Frank’s global head of research, Liam Bailey, noted that the interest rates would continue to be a pivotal factor for future price growth in the globe’s luxury residential property markets.
While Bailey acknowledged that inflation has been easing in many key economies, he said that the US policy on tariffs has created the potential for “significant future volatility” across the global financial system.
“While expectations of interest rate cuts have risen outside the US, including in Australia, greater clarity on the pace and extent of future cuts is needed before we see significant upside in pricing in most housing markets,” Bailey said.
On a domestic scale, Ross said that the recent global headwinds, the 2025 Australian federal election, and the potential for additional interest rate cuts resulted in the pausing of much construction activity over the first quarter of the year.
Ross highlighted that increased construction costs have continued to plague construction efforts over the start of 2025, and resultantly capped the number of new prestige homes delivered during the period.
“The restoration of business confidence is of most importance in the second half of the year to build wealth creation and preservation within private property portfolios,” Ross concluded.