Demand for luxury homes in select Australian capital city suburbs has risen over the past year, despite broader market challenges stemming from higher interest rates and recent tax changes. While median property values in several high-end areas have declined, inquiry levels among potential buyers in some premium pockets have shown notable increases, indicating pockets of resilience at the top end of the market.

Following three interest rate hikes by the Reserve Bank of Australia and the introduction of federal budget measures that eliminated negative gearing for established homes, the national housing market has generally softened this year. In many affluent suburbs—including Melbourne’s inner east and Sydney’s northern beaches and eastern suburbs—median house prices have dropped compared with 12 months ago.

However, new data focusing on suburbs with median house prices exceeding $2 million reveals a contrasting trend in buyer engagement. Realestate.com.au’s analysis, which tracks high-intent inquiries such as calls to agents, emails, and document downloads, identified increased interest in several premium areas. According to senior economist Anne Flaherty, inquiry rates serve as a leading indicator of demand and often foreshadow stronger future price performance relative to the wider market.

Suburbs with median prices near the $2 million threshold saw the most pronounced growth in inquiries, suggesting that affordability remains a key consideration among multimillion-dollar buyers navigating the current high borrowing cost environment. Notably, Toorak Gardens in Adelaide’s inner east recorded the largest increase, with inquiries rising by 50 percent compared to the prior year.

In Perth, where the overall housing market has performed well—seeing price growth around 10 percent over the past year but a slight 3 percent decline from a March peak—several premium western suburbs experienced substantial upticks in buyer interest. Dalkeith, boasting a median house value of approximately $4.1 million, had a 48 percent surge in inquiries, making it the most expensive suburb featured among those with rising demand. Trigg and Wembley Downs also reported robust growth in inquiries within the city’s $2 million-plus segments.

Queensland’s northern suburb of Hendra and Brisbane’s western St Lucia emerged as notable areas attracting increased attention from affluent buyers within the state’s luxury market. In Melbourne, buyers seeking more attainable premium properties have focused interest on Mont Albert and Ivanhoe East, areas offering slightly lower entry points compared to the city’s most exclusive eastern suburbs.

Sydney’s outer northwestern suburb of Cattai experienced a 49 percent increase in inquiries, reflecting growing appetite among some wealthy buyers for acreage and larger land parcels, a trend distinct from inner-city luxury market dynamics.

With further interest rate reductions not anticipated before 2027, many high-net-worth property seekers are gravitating toward aspirational suburbs that balance prestige with relatively greater affordability. Market observers suggest these areas could lead the way when price growth resumes, positioning them as key indicators for the luxury housing cycle’s next phase.