Sydney, Brisbane and Melbourne continue to operate above the global average annual prime residential price growth of 2.7 per cent, despite a cooling mainstream market off the back of tighter lending practices.
Sydney's luxury real estate market grew 4 per cent over the year to September, followed by Brisbane with 3.5 per cent and Melbourne, 2.8 per cent, according to the Knight Frank Prime Global Cities Index.
The index, which tracks the top 5 per cent of property sales across 43 cities around the world, placed Sydney 17th, down from 15th place in the previous quarter.
Brisbane ranked in 20th position while Melbourne sits in 21st place and Perth 24th place.
There was a noticeable decline in the overall performance across all markets due to rising interest rates across major economies, a tighter regulatory environment, and the remnants of high supply in some markets.
Knight Frank Global Residential Cities Index Top Performers
In Australia, APRA's crackdown on lending, along with the royal commission into banking, has played a part in triggering a market downturn with investors and homeowners struggling to secure finance.
Yet it seems those purchasing prime real estate, without a reliance on finance or debt, have continued to do so in the face of weakening market conditions.
In Perth, the volume of prime residential sales priced between $3-10 million has increased by 48.2 per cent in the year to June 2018, highlighting the potential for future price growth on the west coast.
Off the back of a record year, the volume of prime sales in Sydney has pulled back by 22.3 per cent over the year to June 2018 as a knock on from house prices falling by 6.5 per cent in Sydney over the year.
Melbourne's house prices fell by 3.2 per cent over the year, while Brisbane prices grew 2.2 per cent over the year to September.
Knight Frank head of residential for Australia Sarah Harding said offshore interest in Australian prime residential property had held steady over the past 18 months.
“Australia remains a highly attractive proposition for global wealth, and more recently with the stronger US dollar, money can go much further than one year ago,” Harding said.
Prime Global Cities Index Q3 2018
“We have seen this with global investors as well as Australians currently based offshore when buying with US dollars.”
“There is still ever-growing demand from the global ultra-wealthy population to move their money into ‘safe-havens’ around the world and Australia is the third most-preferred global destination for emigration for the world’s wealthiest.”
Globally, the price of luxury property around the world increased by 2.7 per cent in the year to September - the weakest annual performance in almost six years, according to Knight Frank.
Singapore recorded the strongest growth with top-end property prices increasing 13.1 per cent over the year, with the weakest market of the 43 registered countries in Vancouver where prices fell 11.2 per cent over the year.