Luxury living:
THE INTERSECTION OF HIGH-END RETAIL AND PREMIUM REAL ESTATE IN AUSTRALIA
VANESSA RADER RAY WHITE GROUP HEAD OF RESEARCH
Australia’s luxury landscape is experiencing a notable transformation in 2025, with evolving patterns of elite consumption reshaping both the high-end retail sector and premium property markets. As the luxury retail market reaches $7.7 billion, with 643 businesses operating across the country, clear patterns are emerging that signal opportunities and considerations for Australia’s premium property sector.
The Australian luxury retail market has demonstrated impressive resilience, growing at a consistent annual rate of 3.8 per cent between 2020 and 2025 despite global economic challenges. This growth trajectory is expected to continue over the next five years, indicating sustained demand for premium products and experiences among Australia’s affluent consumers.
This upward trend presents a stark contrast to international markets like the United States, where luxury spending declined for ten consecutive quarters before showing early signs of recovery in 2025. Australia’s comparatively stable luxury retail environment suggests a more resilient high- net-worth consumer base, creating fertile ground for both retail and residential luxury developments.
Australia’s luxury retail market reaches $7.7 billion with 643 businesses
Key players shaping Australia’s luxury landscape
Australia’s luxury retail market features a moderate but increasing level of competition, dominated by international powerhouses including Louis Vuitton Australia, Richemont Australia, and Hermès Australia. Louis Vuitton Australia currently holds the largest market share, reflecting global trends where established heritage brands maintain significant influence despite the emergence of new luxury concepts.
The concentration of luxury retail in specific urban corridors, particularly in Sydney and Melbourne, creates natural synergies with premium residential property markets. Proximity to these high-end retail clusters has become an increasingly important consideration for luxury property buyers, creating value uplift for residential developments in these precincts.
BEYOND BORDERS: AUSTRALIA’S RELATIVE INSULATION
Unlike some international luxury markets, Australia’s luxury retail sector remains relatively insulated from trade tensions, with both import and export tariffs having minimal impact on industry revenue. This stability provides additional security for the luxury ecosystem, including adjacent markets like premium residential property.
The number of luxury retail businesses in Australia has grown at a compound annual rate of 4.8 per cent between 2020 and 2025, outpacing the revenue growth rate and indicating increasing fragmentation and specialisation within the market. This trend toward more diverse and tailored luxury offerings mirrors developments in the residential property sector, where bespoke, highly customised developments increasingly command premium prices.
The number of luxury retail businesses in Australia has grown at a compound annual rate of 4.8 per cent between 2020 and 2025.
FROM RETAIL TO REAL ESTATE: TRANSLATING LUXURY TRENDS
Several key patterns emerging in Australia’s luxury retail sector have direct implications for the premium residential market:
1. Experience-led consumption
Just as luxury retailers increasingly focus on creating memorable in-store experiences rather than simply selling products, successful premium residential developments are emphasising lifestyle offerings beyond the physical dwelling. Properties that incorporate exceptional design, wellness amenities, and service elements are commanding significant premiums in the current market.
2. The rise of bespoke craftsmanship
Australian luxury consumers are demonstrating growing appreciation for craftsmanship and materiality, with quality and provenance increasingly outweighing brand names alone. This shift is directly paralleled in residential preferences, where authentic materials, artisanal details, and evidence of exceptional craftsmanship have become key selling points for discerning buyers.
3. Generational evolution
The Australian luxury market is experiencing a generational shift, with younger affluent consumers bringing different values and preferences to both retail and real estate decisions. While established high-net-worth individuals continue to drive the majority of current luxury spending, developers and retailers alike are adapting their offerings to appeal to the next generation of luxury consumers, who often prioritise authenticity, sustainability, and experiential value.
INTERIOR DESIGN: THE BRIDGE BETWEEN RETAIL AND RESIDENTIAL
Australian interior design trends for 2025 reflect the evolving definition of luxury that spans both retail and residential spaces. The emergence of “gentle luxury” combining refined aesthetics with comfort and authenticity represents a sophisticated middle ground between minimalism and maximalism that appeals to today’s discerning consumers.
This design approach is characterised by rich, earthy colour palettes featuring tones like Mocha Mousse (Pantone’s 2025 Colour of the Year), silvery greys, creamy beiges, and warm terracottas. These colours create environments focussed on harmony and tranquility, addressing the growing desire for homes that provide sanctuary while still conveying sophistication.
The trend extends to material choices, with increasing emphasis on natural textures, quality fabrics, and thoughtfully selected furniture that tells a story rather than simply signalling status. Properties that successfully incorporate these design elements typically achieve stronger market performance, particularly in the ultra-premium segment.
STRATEGIC CONSIDERATIONS FOR LUXURY PROPERTY STAKEHOLDERS
1. Location synergies
Properties with proximity to established or emerging luxury retail precincts benefit from the spillover effect of high-end brand presence, creating opportunities for premium positioning.
2. Experiential value
Developments that prioritise experiential elements alongside physical attributes align with the broader shift toward experience-led luxury consumption, potentially commanding higher premiums.
3. Demographic targeting
With different demographic segments exhibiting distinct luxury preferences, residential developments can benefit from tailored approaches that address the specific priorities of their target market, whether established high-net-worth individuals or emerging affluent consumers.Developments that prioritise experiential elements alongside physical attributes align with the broader shift toward experience-led luxury consumption, potentially commanding higher premiums.
4. Material investment
As luxury consumers become increasingly educated about quality and craftsmanship, properties that showcase exceptional materials and artisanal elements generally outperform those focused merely on surface aesthetics.
The outlook for Australia’s premium markets
Looking ahead, Australia’s luxury residential market appears well-positioned to benefit from the continued growth and evolution of luxury consumption patterns. With the luxury retail sector projected to maintain its upward trajectory, and Australian consumers demonstrating sustained appetite for premium experiences, the fundamentals for the high-end property market remain strong.
Properties that successfully align with the evolving definition of luxury, emphasising authentic experiences, exceptional craftsmanship, and thoughtful design, will likely command the strongest position in Australia’s increasingly sophisticated premium real estate landscape.
The relationship between luxury retail and residential markets continues to deepen, creating opportunities for stakeholders who understand and leverage these interconnections. As both sectors adapt to changing consumer preferences and global trends, Australia’s distinctive approach to luxury living positions it uniquely within the international premium marketplace.
