These are the most expensive locations in our capital cities – the "established money” locations where most of the residents have lived for a long time and where many residents have paid off their home loans years ago.

In general, these locations are the established inner-ring suburbs of our capital cities or suburbs close to water.

Think of Toorak, Brighton, or Kew in Victoria, Teneriffe or New Farm in Brisbane, and Darling Point or Bellevue Hill in Sydney.

Over the long term, this sector of the housing market outperforms the other segments, in part because of its scarcity, but in particular because, as we know, the rich are getting richer than the average Australian and they can afford to and are prepared to pay a premium to live in these prime locations.

In general, these would be considered A-grade locations but interestingly the property cycle values in these suburbs are usually more volatile.

During property booms and periods of economic growth, wealthy Australians have the financial capacity to indulge their emotional wants and buy the most expensive properties they can.

Then during the inevitable economic downturns activity in these locations tends to quieten down as is currently happening.

Of course, not everyone can afford to buy at this end of the market, so strategic investors often look to invest in one of the following locations instead.

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Jason Gwerder
Friday, 1 December 2023

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