Australia’s top markets for prime property 

Knight Frank’s latest prime global cities index puts Sydney and Melbourne in the top 10 for global house price growth as Australia remains a safe haven for investment.

The index now tracks the movement of luxury residential property prices across 41 cities, with Istanbul and St Petersburg added to the list for the first quarter of 2017.

Sydney and Melbourne were ranked sixth and ninth on Knight Frank’s index, respectively, for global house price growth.

Sydney’s prime residential real estate grew by 10.7 per cent, while Melbourne achieved an 8.6 per cent surge in growth in the year to March 2017.

“Although the world is in a state of political and economic flux at present, inevitably we are seeing a degree of safe-haven investment flows into luxury property markets – including Sydney and Melbourne,” says Knight Frank’s head of residential research in Australia, Michelle Ciesielski.

Prime property corresponds to the top five per cent of the housing market in each city. Overall the index climbed by 4.3 per cent in the year to March.

Knight Frank attributes this upturn to China’s cities which continue to dominate the top tier of the rankings.

Guangzhou, for example, experienced a 36.2 per cent increase in luxury prices. Not far behind were Beijing (22.9%) and Shanghai (19.8%).

The “big story” in North America is the acceleration of prices in Toronto. At the luxury level, prices ended the year to March 22 per cent higher, outpacing Vancouver by 7.9 per cent.

Other centres of growth include Seoul (17.6%), Stockholm (10.7%), Berlin (8.7%) and Melbourne (8.6%), cities which all share a common theme: clusters of technology businesses.

Tech hubs are outperforming the world’s financial centres, with a 7.4 per cent average annual change in comparison with a 3.2 per cent change for financial hubs.

Financial cities include Sydney, Hong Kong, London, New York, Tokyo and Shanghai. Tech cities include Melbourne, San Francisco, Dublin, Berlin, Taipei and Toronto.

“In 2005, technology companies occupied 120,000 sqm of Melbourne CBD office space; today, this has increased to almost 200,000 sqm,” Ciesielski says.

Amazon, Facebook and LinkedIn are among the “wave of technology companies” seeking office space in Melbourne’s CBD, she adds.