Luxury property sales emerge as haven amid super tax shake-up

As markets recover from the long term effects of COVID, high-end properties are set to realise substantial gains. Ben Braysich, national head of property at Commonwealth Private, sat down with leading property experts to explore current market dynamics.

By Ben Braysich – national head of property at Commonwealth Private

The performance of capital city luxury property markets has been varied over the past six months, with supply and demand forces and interest rate cuts influencing property prices. Looking ahead, we expect sales to be driven by a desire to protect intergenerational wealth, as markets absorb the effect of proposed changes to the superannuation system.

According to Cotality’s executive research director Tim Lawless, “Trends across the ultra-prestige market are notoriously difficult to measure, simply due to the scarcity and unique characteristics of properties that transact at this level. Often settlement conditions can be complex with extended time frames, as was in the case of the $141.55 million penthouse at 1 Sydney Harbour, which despite being contracted in 2019, only settled in June of 2025.

Although ultra-prestige properties are inherently unique in nature, there are some common themes these homes fall within. Proximity to the water, large lot sizes, elevation and proximity to major centres are common traits these properties share.”

However, it is becoming more common to find ultra-high housing sales outside of the capital cities. Lifestyle markets like Byron Bay, Noosa Heads and the Gold Coast are all good examples of markets where prestige sales have become more common.

Simon Cohen, principal of australia based buyers’ agents, Cohen Handler, says time is money in an environment in which interest rates are on a downward trajectory. “We’re seeing a lot of properties sell, everything from Paddington terraces to family homes. There are buyers back in the market and competition is returning. But there’s variability in the prices premium properties are attracting. Some are going for great deals and others are fetching big money,” Cohen says.

“Properties that tick premium buyers’ boxes perform especially well. It’s the type of home, a level yard and the location that’s important. Turnkey properties are very attractive. At the super premium end, off-market sales have become the norm. Sellers want privacy and they don’t want tyre kickers coming through their home,” Cohen adds.

“An inflection in interest rates tends to impact the high end of the market because higher income households can access more finance. But there’s also a sentiment piece impacting prestige property, with consumer uncertainty rising at the start of the year due to Trump tariff announcements and a downward revision in the global economic outlook.”

Eliza Owen

Cotality’s data shows price growth in Sydney’s upper quartile housing market, which historically reacts more rapidly to interest rate changes than other parts of the market, is outpacing the lower quartile and broad middle market.

“With a recent cut in late May and the likelihood of further rate cuts this year, we could see some momentum taking shape across higher value segments of the Sydney market,” says Cotality’s head of australian research, Eliza Owen.

Thanks to investor sales, activity is picking up in Victoria, where luxury property was adversely impacted by COVID as buyers exited. Data bears this out. There were 699 properties sold in the $5 million-plus category in Victoria in 2021, versus 569 properties in 2024.

While interest rates have fallen, for many luxury property markets this has been an opportunity for breathing space rather than a signal to stimulate activity. Melbourne’s trophy homes are an example.

“An inflection in interest rates tends to impact the high-end of the market because higher income households can access more finance. But there’s also a sentiment piece impacting prestige property, with consumer uncertainty rising at the start of the year due to Trump tariff announcements and a downward revision in the global economic outlook,” says Owen.

“For prestige buyers, people who own businesses and those who are compensated with respect to company performance, that kind of uncertainty might mean they are holding off their purchasing decisions. That could explain subdued performance in the high end of the Melbourne market, for example,” she says.

Further north in Queensland, luxury property sales have risen substantially since COVID. The Brisbane, Gold Coast and Sunshine Coast markets are relatively well-priced, especially on a square metre basis. On one hand, prices for apartments at Sydney’s ultra-premium Barangaroo precinct are sitting at $40,000 to $50,000 a square metre. Whereas it’s possible to buy similar properties in the Gold Coast for $20,000 to $25,000 a square metre. The Western Australian property market is also performing well.

In the tightly-held South Australian market, there were only three properties in the $5 million plus category sold in 2021, versus 24 properties sold in 2024. There’s a lot of intergenerational wealth in Adelaide, with many grand estates that very rarely come to market. Consequently, SA tends to be less impacted by cyclical factors than other states.

Looking ahead, high-end property that is your principal place of residence will remain attractive, especially as they remain capital gains tax free. If the proposed changes to super balances in excess of $3 million are likely to be taxed, then investing in super could be less attractive. Froth could really return in spring if interest rates continue to fall. “Prices will increase and we’ll see more properties come on the market,” says Cohen.

While there’s still uncertainty in global markets, investors will look for safe havens and the Australian property market is considered relatively risk free. This should support luxury property markets in 2025 and beyond.

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This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. The above information is not tax advice.

Taxation laws are complex and subject to change. Commonwealth Bank does not provide tax (financial) advice under the Tax Agent Services Act 2009 (Cth). You should consider seeking independent tax advice from a registered tax agent, accountant or adviser before you make any decisions based on this information.

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