What is luxury?

Ask 10 people what makes a home luxurious and you will get 10 different answers. For some, it’s the material: the stone bench, the spotted gum floor, or the ceiling height that signals nothing was compromised. For others, it’s location in its most absolute sense: the view that can’t be built out, the street that doesn’t need an introduction, the proximity to water. For a growing number of Australians, luxury has become less about status and more about how a place allows you to live.

We measure luxury through the 95th percentile of property prices, which is the point at which only five per cent of homes in a given market trade higher. The national luxury house threshold now sits at $2.75 million, which is 80 per cent higher than it was a decade ago. We start with this as a definition for simplicity, but what luxury is not, despite how it is often discussed, is simply expensive. Expense is a threshold, whereas luxury is what sits on the other side of it.

The clearest sign that luxury has shifted is where people are choosing to buy it. The Queensland coastal markets did not become Australia's fastest-growing luxury markets because they suddenly acquired better architecture or more prestigious postcodes. What the data captures is partly a price story and partly a values story. When a buyer leaves a $45 million Bellevue Hill house for a $26 million Noosa property, they are not trading down. They are making a statement about what luxury means to them, and increasingly, it means time, ease, and the particular quality of life that comes from a home that fits how you actually want to live.

Sydney remains the country's most expensive luxury market, with the top five per cent of houses trading above $4.79 million, reflecting the enduring pull of harbour-adjacent land and a concentration of high-net-worth buyers no other city can match. The heritage streetscape, the school catchment with a century of social capital behind it — these still command a premium that no amount of lifestyle recalibration has eroded. But what Sydney no longer holds is a monopoly on price growth. Over the past decade, the Gold Coast grew its luxury price by 152 per cent, the Sunshine Coast by 159 per cent, and Brisbane by 133 per cent.

Melbourne, by contrast, grew just 42.1 per cent over the same period, from $1.82 million to $2.58 million. The consequence is a near-total collapse of Melbourne's historical premium over its northern rivals. In 2016, Melbourne's luxury threshold was roughly 70 per cent above Brisbane's and 46 per cent above Perth's. Today, Brisbane sits at $2.49 million, Perth at $2.48 million, and Melbourne at $2.58 million — three cities separated by less than $100,000.

Adelaide has also closed ground rapidly, reaching $2.08 million after 123.6 per cent growth, now matching Canberra at the same level. Even Perth, long considered a cyclical and volatile market, has more than doubled its luxury threshold and now sits within striking distance of Melbourne for the first time.

The unit market tells a parallel story. Queensland’s coastal cities again dominate the decade’s growth table. The Sunshine Coast luxury unit threshold has grown 130 per cent to $2.27 million, overtaking Sydney as the most expensive luxury unit market. The Gold Coast is close behind at 125 per cent, reaching $2.13 million and marking a reversal that would have seemed improbable a decade ago when Sydney led the field at $1.51 million and both Queensland markets were below $1 million.

Melbourne sits at the other end of the table. Its luxury unit threshold of $1.43 million grew just 28 per cent over ten years, the second-lowest of any major market. Brisbane's luxury units, at $1.51 million, now exceed Melbourne's, the same dynamic playing out in apartments as in houses.

Darwin is the outlier. Its luxury unit price is virtually unchanged over ten years: $803,000 in 2016, $810,000 in 2026. A one per cent decade-long return is less a market than a holding pattern.