National home values grew 0.8 per cent over August, and auction clearance rates have soared to their highest point since April 2017 - but one market isn’t budging.
According to Domain, the trophy home market is on track to record the worst run of big-ticket sales since 2012. In fact, there have only been a handful of $20 million-plus sales.
Domain’s research analyst Eliza Owen told Yahoo Finance the US-China trade war could be to blame.
“In this very top end of the market, there's an idea that it is more susceptible to economic uncertainty and economic shock,” Owen said.
“That's because people who buy these very high end homes potentially more affected. They might be business leaders, or they might have a stake in share markets.”
“With everything that's happening with the US-China trade war at the moment, people may be hesitant to make big purchasing decisions while there's this threat to business around tariffs and imports and things like that.”
While share markets are on rocky ground now, Christie’s International, Ken Jacobs, said 2012 was a different story.
“In 2012 it was a completely different scenario at play,” Jacobs told Domain.
“Australia’s market was saved from the worst of the impact from the global financial crisis in 2008, but the effect of it came later in 2012 when the rest of the world was already showing signs of having rebounded.”
In September last year, Atlassian’s Mike Cannon-Brookes bought Australia’s most expensive home: the Fairwater mansion on Sydney Harbour valued at close to $100 million.
That sale dwarfed the previous highest-paid price for an Aussie property, which was $71 million for the property next door, bought by Atlassian co-founder Scott Farquhar.
Outside of that, few big-ticket properties have managed to sell.
Earlier this month in Sydney, a harbourside pile of dirt hit the market for $25 million, and hasn’t sold yet.
Over in Melbourne, a 1,400-square metre was forced to slash $10 million off its $46 million asking price - despite views of Fitzroy Gardens, a private cinema, bar and meditation room.
More expensive homes still lead the charge
While trophy homes aren’t gaining any traction, expensive homes (around the $2 million-mark) have led the charge in terms of rising house prices, CoreLogic said earlier this month.
“Although values have fallen across the board over recent years, the larger declines amongst more expensive properties mean that they are relatively more affordable for those looking to upgrade,” CoreLogic’s Tim Lawless said.
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