Sydney has cemented its position as one of the globe’s most expensive luxury property markets, ranking 11th worldwide, according to Knight Frank’s Wealth Report 2025. The report highlights that the purchasing power of US$1 million (A$1.6 million) in Sydney has significantly decreased over the past decade, shrinking by a third, underscoring the city’s growing unaffordability in the luxury sector.
Despite this reduction in affordability, Sydney’s luxury market continues to thrive, driven by strong international demand, limited availability of prime properties, and the city’s resilient economy. Sydney remains an attractive destination for high-net-worth individuals despite its price challenges.
Affordability Shift Across Australia:
While Sydney remains the flagship market, the report reveals a growing interest in more affordable luxury markets in Australia. The Gold Coast has emerged as Australia’s most affordable luxury property market, where US$1 million can purchase 119 square meters of prestige real estate. Brisbane and Perth also offer more value for luxury buyers compared to Sydney and Melbourne.
According to the report, the demand for high-end real estate in Australia is shifting, with buyers increasingly seeking a mix of luxury and affordability in lifestyle-driven locations like the Gold Coast.
Market Outlook:
Looking ahead, Sydney’s luxury property prices are expected to grow by 1% in 2025, reflecting a moderate trend due to geopolitical uncertainty and an upcoming federal election. However, factors such as the city’s stock market resilience, the high proportion of cash buyers, and ongoing supply constraints continue to make Sydney’s prime real estate market appealing to wealthy investors.
The city’s luxury market remains attractive to affluent buyers, particularly those looking to downsize into premium apartments and coveted trophy homes.
Global Trends and Sydney’s Role:
Sydney’s luxury market trends are part of a broader global shift. The report notes that luxury real estate continues to be a favored asset class for wealthy investors despite economic volatility. International markets such as Miami and Dubai have seen remarkable price growth, with luxury property values nearly doubling since 2020. In contrast, markets like London, New York, and Paris have stabilized.
Sydney’s luxury property market continues to attract international buyers, with global cross-border investment reaching US$8.6 billion in 2024. This solidifies Sydney’s appeal as a prime location for foreign investors, despite its high entry costs.
Conclusion:
The appetite for prime real estate remains strong in Sydney, with cash buyers and private capital driving activity in the luxury sector. Despite rising debt costs, the demand for luxury properties in Sydney shows no signs of slowing down.
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