Luxury property for sale in Australia underperforming

New research has found that the premium, luxury home market in Australia is being hit hard by a ‘perfect storm’ of forces.  While the affordable and mid-range housing market holds firm, values of luxury homes in Australia are sliding in 2011.

Value of luxury overseas property in Australia falls 5.4 per cent

The research from RP Data found that it was the ‘luxury homes’ end of the Australian property market that suffered the most significant fall in prices in the first quarter of 2011. 

The Sydney Morning Herald reports that ‘median values at the affordable end of the market fell just 0.5 per cent in the 12 months to April 2011, while the middle 60 per cent of the market softened 0.9 per cent.

By comparison, 20 per cent of the most expensive capital city suburbs recorded a 5.4 per cent fall in value over the year.’

The worst performing suburb was Mosman Park, a prestigious waterfront area of Perth, where median house prices have fallen by 43.1 per cent fall since their peak in August 2008.

Falls in values of luxury homes affecting whole Australian property market

Cameron Kusher, data analysts for RP Data said that the weak performance of the luxury homes market was having a significant impact on the overall property market in Australia.

He said: ‘‘The premium sector is being impacted by a perfect storm of forces such as consumer conservatism, higher interest rates, poorly performing equities markets, unstable global economic conditions and lower levels of business and consumer confidence.

‘‘With subdued residential property markets likely to persist over the next year, we anticipate that the premium and most affordable segments will underperform.’’

The data for the first three months of 2011 found that the highest median price among the 25 best performing capital city regions was $850,000 (£554,500) in Sydney’s Botany Bay.

The newspaper reports that ‘more than half of the 25 best performing capital city regions had a median house price under $500,000 [£326,200]. The median house price across the combined capital cities was $478,000 [£311,800]’.

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