Sydney remains Australia's top luxury market

Four Australian cities — Sydney, Melbourne, Brisbane, and the Gold Coast — recorded luxury residential growth higher than the global average during the last quarter, according to the latest report by Knight Frank.

Knight Frank's Prime Global Cities Index, which tracks 45 capital cities worldwide, ranked Sydney as the 17th best market for prime-house growth. The city climbed one spot higher in the ranking from the previous quarter and remained Australia's top luxury market.

Melbourne maintained its global ranking at 21st, recording a growth of 2% in the quarter. Brisbane reported a similar gain but fell in the overall ranking from 20th to 22nd. The Gold Coast, which was only included in the list during the second quarter of the year, showed a 1.3% growth in luxury house prices, placing 26th.

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The average annual luxury-price growth across the cities tracked by Knight Frank sat at 1.1% during the quarter. Perth, which ranked 30th in the list, registered only a slight increase at 0.6%.

The growth in prime property prices appears to follow the performance of the stock market, said Michelle Ciesielski, Knight Frank's head of residential research for Australia.

"With equities on an upward growth trajectory, this will likely follow through to further growth in prime property prices," she said.

Furthermore, the prime housing market seems to remain unaffected by the issues concerning the mainstream residential markets, Ciesielski said.

"While the Australian mainstream residential markets were progressively being corrected by tightened lending measures, the prime property market continued to experience positive growth given the prestige end of the market was less impacted by funding restrictions throughout this time," she said.

The table below shows the difference between the price gains of each city on a quarterly and an annual basis: