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Late-Pandemic Boom Hits Australia’s High-End Markets

06.05.21

Australia’s prestige property market is gaining late-pandemic momentum with the number of multimillion-dollar neighbourhoods set to double in 2021.

The inaugural REA Insights Property Outlook Report released in February, compiled by national listings portal realestate.com.au, is predicting that the number of A$3 million (US$2.38 million) suburbs will jump from 30 to 60 by the end of the calendar year.

Despite Covid-19, the local prestige market experienced particularly strong conditions in 2020, as interest rates remained at all-time lows, homebound Australians saved more disposable income and total household wealth hit a record high at A$11.35 billion by December.

Even realestate.com.au's views per listing for homes priced more than A$10 million had increased by 150% compared to before the pandemic.

Nerida Conisbee, chief economist at realestate.com.au, said there had been a definite acceleration of pricing across all Australian residential property.

“But luxury was one area that really stood out. Not only are interest rates incredibly low and jobs are roaring back, there are those wealth effects that really accelerated during Covid with lots of savings. So that's really good news for premium property,” she said.

A Push to the Beaches Beyond Sydney

Most of the current suburbs with an average price of A$3 million are located in and around Sydney, but an increasing number of locations outside of Australia’s largest city are tipped to join the affluent club this year.

“Newcastle has long been considered a working class city, but since Covid and this push to more regional centers, we’re now starting to see incredible price growth in areas perhaps sooner than expected,” Ms. Conisbee added.

She said the Gold Coast region, which has traditionally been far more affordable than Sydney, is also experiencing incredible price growth.

“We’re seeing this really strong drive to beachside areas, which isn't just Covid-related because it’s been going on for about 20 years, but it's starting to show up in some locations where we didn’t previously see such very expensive pricing,” she added.

“And then in Victoria, we’ve seen several Mornington Peninsula suburbs really taking off, which is definitely Covid-related. We're seeing places like Portsea and Flinders getting close to that level primarily because they are lifestyle suburbs that are commutable to Melbourne. It’s clear that people are just working differently and want to be beachside,” Ms. Conisbee said.

Melbourne’s Mass Exodus

The state capital of Victoria suffered through some of the most strict Covid restrictions in Australia with three state-mandated lockdowns, the longest of which lasted for 111 consecutive days and ended on Oct. 28. That shock effectively triggered a desire among Melbourne’s residents to escape to the country. On the receiving end of that internal migration has been the Mornington Peninsula, a collection of sleepy seaside villages stretching 280 square miles of Victoria’s coastline that has long drawn parallels with The Hamptons in New York.

Source: www.mansionglobal.com/articles

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