Sydney ranks as world’s 11th most expensive city for luxury property

Buyers with $1.6 million to spend on a high-end home in Sydney will only get a 45 square metre apartment, although this represents better value than many global cities.

Sydney has been named the 11th most expensive city worldwide for luxury real estate, with the amount of space purchasable for US$1 million shrinking by a third over the past decade, according to Knight Frank’s The Wealth Report 2025.

The report revealed the Gold Coast offers Australia’s most affordable luxury real estate, with $1.6 million (US$1 million) buying 119 square metres of prestige property, followed by Brisbane and Perth.

This remains significantly more affordable than global property hotspots like Monaco, which tops the list as the world’s most expensive luxury market, offering just 19 square metres for US$1 million, followed by Hong Kong (22 square metres) and Singapore (32 square metres).

Knight Frank global head of research Liam Bailey said despite higher interest rates over the past four years, prime residential prices in Australian cities had largely continued to grow thanks to “cash buyers who are less dependent on financing and by lower supply”.

“While buyers of the luxury real estate are less reliant on financing, the RBA’s decision to reduce rates at their recent February meeting signals a change in the market towards greater stabilisation and a strengthening of the economy,” Mr Bailey said.

“There is now improved sentiment and further rate cuts expected this year will restore momentum.”

However, Knight Frank expects a moderation in price growth for Australian luxury property markets throughout 2025, aligning with the mainstream market due to factors including the federal election, ongoing geopolitical uncertainty and further interest rate cuts likely postponed until the second half of the year.

Australia ranks ninth globally for its population of high net worth individuals (HNWIs) – those with more than US$10 million in assets – representing 1.8 per cent of the world’s wealthy elite.

In Australasia during 2024, the number of HNWIs increased by 3.9 per cent and is projected to grow by a further 5.3 per cent by 2028.

The United States leads globally with almost 39 per cent of the world’s US$10 million-plus population – nearly double that of second-placed China at 20 per cent.

Property has emerged as a significant investment for younger wealthy individuals, with real estate ranking as the top luxury asset 18-to-35-year-olds would most like to own, according to the report.

McGrath Estate Agents CEO John McGrath said the next generation desired luxury real estate from a lifestyle point of view, but they could also see the strength of that asset class as an investment.

“Real estate prices in Australia are underpinned largely by an undersupply, including in the luxury market, and with the demand continuing to grow, prices will also continue to appreciate in the future,” Mr McGrath said.

“Australia is a particularly desirable market for luxury real estate due to its plentiful lifestyle locations, as well as being on the doorstep of all the global powerhouse nations within the Asian region.”