Sydney ranks 11th among world’s most expensive luxury property markets

Sydney has been named the 11th most expensive luxury property market globally in Knight Frank’s Wealth Report 2025, with the purchasing power of US$1 million (A$1.6 million) declining significantly over the past decade.

The amount of prime real estate that US$1 million can buy in Sydney has decreased by a third over the last ten years, underscoring the growing unaffordability in the city’s luxury sector.

Despite these affordability challenges, Sydney continues to attract international buyers due to strong demand, limited stock availability, and a resilient economy.

The Knight Frank report identified the Gold Coast as Australia’s most affordable luxury property market, where US$1 million can secure 119 square metres of prestige real estate.

Brisbane and Perth follow closely behind, offering better value for luxury buyers compared to Sydney and Melbourne.

“Demand for high-end real estate in Australia is shifting,” the report said.

“While Sydney remains the flagship market, lifestyle-driven locations such as the Gold Coast are capturing more interest from affluent buyers seeking a mix of luxury and relative affordability.”

Sydney’s luxury property prices are forecast to grow by 1 per cent in 2025, indicating a moderating trend amid geopolitical uncertainty and the upcoming federal election.

Several factors are expected to maintain demand at the top end of the market, including the city’s stock market resilience, a high proportion of cash buyers, and ongoing supply constraints.

“With more high-net-worth individuals actively looking to downsize into premium apartments and tightly held trophy homes, Sydney’s prime market remains attractive,” according to the report.

The city’s strong position in the luxury property market reflects a broader global trend, with luxury real estate remaining a preferred asset class for wealthy investors despite economic volatility.

Internationally, Miami and Dubai lead global price growth, with luxury property values in these cities nearly doubling since 2020.

Prime residential values in established markets such as London, New York, and Paris have stabilised.

Sydney ranked 67th in the Prime International Residential Index (PIRI 100), recording an annual price growth of 1.1 per cent in 2024.

Global cross-border investment into Sydney real estate reached US$8.6 billion last year, reinforcing its appeal among foreign buyers who continue to see value in prime locations despite high entry costs.

“The appetite for prime real estate remains strong,” the report said.

“Despite rising debt costs, cash buyers and private capital continue to drive activity, particularly in established luxury hubs.”