Luxury market shrinks for $5m home buyers

Australia's most exclusive suburbs come with a high price for prestige, leaving even wealthy buyers with fewer options. A $5 million budget can secure a premium home in many areas, but in the country's top neighbourhoods, it only offers access to a small portion of the market. Big budgets still strive for luxury, but increasing demand and tight supply create a mismatch.

In New South Wales, elite suburbs such as Bellevue Hill, Double Bay and Vaucluse now have between 85% and 90% of homes priced above $5 million. High demand is driven by features like hilltop views, waterfront locations and proximity to Sydney's CBD. However, buyers entering the market with $5 million often find themselves competing with those who have significantly more to spend.

The same trend can be seen in other capital cities. In Melbourne’s Toorak, over half of all homes exceed the $5 million mark. Nearby areas like East Melbourne and Flinders also show similar pricing. In Queensland, Teneriffe stands out, with one in five properties selling for more than $5 million. Coastal suburbs such as Surfers Paradise and Mermaid Beach still offer some access for $5 million buyers, but in both locations, between 13% and 16% of homes remain above that level.

Even in states known for more affordable property markets, such as South Australia and Western Australia, premium suburbs tell a different story. In areas like Peppermint Grove and Medindie, a notable number of homes exceed $5 million. In Canberra's Forrest, one of the oldest and most desirable parts of the ACT, around 20% of homes fall into the same category.

As property values rise in these high-demand neighbourhoods, $5 million no longer guarantees top-tier real estate. What once bought extensive choice now only allows access to a smaller portion of the market. The impact of location, exclusivity and prestige continues to widen one of Australia's most visible property gaps.

Source: Australian Financial Review, View, Marine Business News, Australian Property Investor

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