Despite a volatile year for the broader housing sector, Australia’s luxury market continues to outpace expectations — but not every city is sharing in the spoils.
3 min
Australia’s top-tier property market has not only held its ground but surged ahead, outperforming median market trends over the past decade.
According to Ray White’s Luxury Market Report 2025, demand for prestige homes with location, character, and uniqueness has fuelled long-term price growth, with Sydney and Brisbane emerging as key players in the nation’s high-end housing boom.
While the broader property market has faced its share of turbulence, the report reveals that luxury homes, particularly those in tightly held or lifestyle-rich areas, are proving to be recession-proof investments.
Ray White’s data shows that over the past decade, luxury house prices have grown 84%, compared to 70% growth in median-priced houses. Luxury apartments, too, posted significant gains — up 58% over the same period, outpacing the 31% growth seen in median units.
This upward trajectory highlights what affluent buyers have long known: scarcity and quality always command a premium.
“Luxury buyers are motivated by lifestyle and legacy — not just returns,” the report states. “They seek homes with architectural character, privacy, exclusivity and proximity to amenities. And increasingly, they’re willing to pay for uniqueness.”
In a rare deviation, 2023 marked the first time in ten years that the median market outperformed the luxury market. This was attributed in part to tighter credit conditions, a cautious global investment climate, and a flight to perceived value in the lower-priced brackets.
But Ray White analysts believe this was a temporary recalibration rather than a trend reversal.
“Across the long-term horizon, prestige continues to outperform,” the report concludes. “The recent dip was more reflective of macroeconomic sentiment than a fundamental shift in demand for luxury.”
Unsurprisingly, Sydney remains the juggernaut, commanding 64% of all national luxury house sales and 51% of unit sales. Harbour views, limited supply and generational wealth underpin its continued dominance.
But perhaps the most compelling story of 2025 is Brisbane’s ascent. For the first time, luxury house and apartment prices in Queensland’s capital have crossed the $1 million threshold, and buyer activity shows no signs of slowing.
Migration from southern states, lifestyle appeal, and the impending 2032 Olympics are all contributing to the city’s new prestige identity.
“Brisbane is no longer the underdog,” the report says. “Buyers from Sydney and Melbourne are increasingly seeing it as a value play — and that’s driving demand for luxury stock.”
The Gold Coast, meanwhile, has quietly expanded its market share in the luxury unit space by 9%, thanks to surging demand from downsizers and international buyers. Waterfront apartments and branded residences are proving particularly hot.
In contrast to the upbeat figures from Queensland and New South Wales, Melbourne has experienced a notable retreat. The city’s share of luxury unit sales has fallen 4%, and luxury house sales have dropped 12%.
While the report stops short of sounding alarm bells, it attributes Melbourne’s cooling to shifting lifestyle priorities, post-pandemic relocation patterns, and ongoing population churn.
“Melbourne’s prestige market isn’t declining — it’s simply being rebalanced,” the report notes. “But with the right architectural product and location, the appetite is still there.”
More than ever, luxury buyers are seeking differentiation — properties that offer not just size or finishes, but a distinctive story. Think: heritage homes with contemporary restorations, homes with water access or panoramic views, and penthouses in boutique developments rather than high-density towers.
Homes that stand out are commanding serious premiums — often well above suburb medians — especially in traditionally non-prestige postcodes.
“The days of ‘McMansions’ being considered luxury are over,” the report adds. “Modern buyers want soul, not just square footage.”
Whether it’s a terrace in Paddington, a penthouse in Newstead, or a vineyard in the Adelaide Hills, the message from the Ray White Luxury Report is clear: when it comes to high-end real estate, scarcity is king.
As buyers seek long-term value and lifestyle investments, the prestige market is expected to remain resilient, particularly in locations with strong infrastructure, lifestyle appeal, and development restrictions that limit supply.
In a world of economic uncertainty, luxury real estate is increasingly being seen not just as an asset, but as a form of security, both financial and emotional.
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2 min
The typically busy spring season for the housing market was a dud, and the summer isn’t looking much brighter.
Housing services companies like Zillow Group and Rocket RKT +3.78% were loud and clear last week on earnings calls: Rocket CEO Varun Krishna called the quarter through June “one of the toughest spring housing markets in years.”
Jeremy Hofmann, Zillow’s chief financial officer, said on a conference call that the company predicted earlier this year that the market for mortgages would be flat. “We actually now think it’s going to be down low-to-mid-single digits,” he said.
The rest of 2026 will remain challenging for mortgage origination volume, says KBW analyst Bose George. The question now is what happens in 2027. “If mortgage rates remain [around] 6.75%, I think that’s going to be challenging even for next year,” he says.
But what’s bad news for mortgage companies could be a positive for bargain hunters. Buyers can expect prices to grow more slowly—or mildly decline—with less competition as long as mortgage rates remain unpredictable.
Mortgage rates at the beginning of the year were solidly below year-ago levels, notes Zillow senior economist Kara Ng. But they surpassed last year’s levels recently, she adds, referencing Freddie Mac’s weekly survey of 30-year fixed mortgage rates. Last week’s reading, at 6.69%, was higher than year-ago levels for the first time in 2026.
“From the affordability point of view, it’s going to get more challenging in the second half of the year,” she says. “And when affordability gets more challenging, that impacts sales and home price appreciation.”
Mortgage application data tracked by the Mortgage Bankers Association has cooled since the beginning of the year. The trade group expects that the number of mortgage originations in the remaining two quarters will lag behind last year’s levels, after exceeding 2025 levels in the first half.
Rocket’s early-stage data—which the company told Barron’s it derives from its brokerage Redfin, demand for its mortgage products, and signs in its servicing portfolio that a homeowner is preparing to refinance or move—“leads us to expect the third quarter mortgage market to be smaller than the second,” Chief Financial Officer Brian Brown, said on the company’s call. He added that such an occurrence is “something the industry has not seen since 2022.”
Prices will be about flat nationally, Ng says. Zillow’s most recent forecast, which shows how values are expected to change in the year ending June 2027, show them dropping in roughly half of the 100 largest U.S. metros for which data is available.
Buyers aren’t rushing in at a time when mortgage costs are rising and unpredictable. But those with the right combination of patience and cash could stand to benefit. “If you are financially qualified to buy a starter home, you are facing less competition and you’re more likely to get a price cut,” Ng says.
