Sydney Surpasses Paris in Super Prime Residential

Nearly 100 high-end residential sales for more than $US10 million have propelled an Australian city into the top 10 of the cities with the most expensive residential transactions.

Thanks to 99 ‘super prime’ residential transactions last year, Sydney has placed eight on the global list compiled by Knight Frank. Seven were ‘ultra-prime’, topping $US25 million.

Meanwhile, the lower end of the city’s housing market has fared the worst of all the states with a 29.2 per cent decline in sales, while and a 13 per cent slump in prices, according to CoreLogic.

Clearly, things are very different at the top end of town with confidence in the NSW capital luxury market on a high.

Sydney surpassed the Swiss capital of Geneva (69) as well as Paris (23). However Palm Beach and Broward in the US, as well as Singapore, were ahead of the Emerald City. 

The top five cities in the world with the most high-end sales did not hold any surprises with New York on top (244), followed by Los Angeles (225), London (223), Miami (146) and Hong Kong (125).

New York also topped the list with 43 ultra-prime sales.

The super prime and ultra-prime markets for 2022, however, were down on the previous year. 

Across the globe, 1392 sales were transacted for $US10 million or more in the 10 global markets reviewed.

Knight Frank head of residential research Michelle Ciesielski said that this was considerably less than the 2076 sub- and ultra-prime transactions of  2021.

“[But] it is still 49 per cent above 2019 levels and equates to $US26.3 billion in sales,” Ciesielski said.

“As with many market segments, the second half of 2022 saw a slowdown in transactions as the cost of debt rose and economic uncertainty entered the equation, but it was moderate with 44 per cent of transactions happening globally in the final six months.”

▲ A mansion at 2 Reddall Street in Manly with ocean views sold for $21.5 million at auction last year.

The Wealth Report also surveyed 500 private bankers, wealth advisors, intermediaries and family offices who manage over $US2.5 trillion of wealth for ultra-high–net-worth individuals (UHNWIs). 

Australian ultra-rich individuals were largely “optimistic about amassing more wealth in the future”, with 94 per cent expecting wealth to rise or stay the same this year despite turbulent economic conditions across the country, including the cost of living crisis, skyrocketing interest rates and house pieces. 

Just 6 per cent thought it would decrease marginally.

Ciesielski said that real estate was the number one driver of wealth performance in 2022. 

It was also identified as the top opportunity to create and grow wealth in 2023, beating technology and equity markets to the top spot.

▲ 4 East 66th Street in New York sold for $US101 million, making it the most expensive residential transaction in the Big Apple in 2022, according to Bloomberg.

“Forty-eight per cent of UHNWIs portfolios are allocated to residential (36 per cent) and commercial property (22 per cent), while equities is a distant third at 13 per cent,” Ciesielski said. 

“Property is a perceived inflation hedge and is seen as a safe and secure investment in times of uncertainty, as well as offering diversification benefits.

“Declines over last year were attributed to equity markets, financial markets and interest rate moves.

“Rising inflation led to the steepest rise in global interest rates in history, and inflation is still on the minds of UHNWIs, with 94 per cent of Australians saying inflation would influence their investment decisions this year, more than the 80 per cent globally.”

The top risks according to the ultra rich are inflation, interest rates and the political and geopolitical landscape.