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Sydney is luxury’s gateway to Australia. This much we know. But, following the post-Covid spending boom, brands are looking beyond Sydney and Melbourne for opportunities in the Land Down Under.
“Australia has come to the fore in the past 20 years,” says Bernstein luxury goods analyst Luca Solca. It was in the early 2010s that international luxury brands began investing more heavily in the country, recognising both local interest and increasing tourism, driven especially by Chinese tourists. Now, you’d be hard-pressed to find a big name luxury brand without at least a store or two in Australia.
Yet, experts agree, the country’s luxury landscape is still kicking into gear. Even Sydney and Melbourne don’t yet have the full suite of luxury retailers, says Kate Bailey, head of retail and alternatives research at real estate firm CBRE. As the population grows and young people move from these cities to smaller alternatives like Brisbane, Perth and Adelaide, it’s time for luxury to follow suit.
There’s ample opportunity. The luxury goods market in Australia was projected to generate revenue of AU $6.2 billion in 2024. This is over half of the UK’s projected revenue, despite having a population that’s around a third of the size. Sydney is ranked the eighth richest city in the world, in terms of millionaires and billionaires per capita (up 34 per cent from 2013 to 2023), having seen “exceptionally strong wealth growth” over the last 10 years, according to investment migration consultancy firm Henley Partners. The Australian Financial Review’s annual ‘Rich List’ reported that, in 2024, the 200 wealthiest Australians controlled AU $625 billion, up 11 per cent from 2023’s AU $563 billion.
CBRE also estimates that there are about 100,000 Australians making close to seven figures or more per year, says Sameer Chopra, head of research for Asia-Pacific at CBRE. “It’s a very deep pool of people buying luxury residential — and luxury products,” he says.
With a predicted compound annual growth rate of 2.7 per cent from 2024 to 2029, according to CBRE, Australia is a market worth investing in sooner rather than later.
Who’s buying?
It’s not just older, wealthy locals that have money to spend on luxury in Australia. Young consumers are ramping up spending as well, per CBRE. It’s in part down to shifts in spending habits, as more young Australians get exposure to luxury brands — which they can now shop in-person, due to the country’s growing luxury footprint — via social media. Young Aussies are also developing savvy means of building wealth, faced with increased costs of living and high student debt. In 2024, the Australian Financial Review’s ‘Young Rich List’ topped records, setting a new high for the list’s total wealth, at AU $41.7 billion. (The list measures the wealth of the richest 100 Australians aged 40 and under.)
High-net-worth migrants are also driving Australia’s luxury spend. The impact of wealthy immigrants on Australia’s luxury market is a “very, very recent” phenomenon, Chopra says, attributing the spike to Australia’s low crime and high-performing stock markets. “It’s a wonderful place to base your business.” In 2023, Australia saw the second highest net inflow of millionaires globally, according to Henley Partners. For 2024, it’s projected to have landed the number five spot. “This gives you that good base to be able to support the [luxury] market, which is probably underdone compared to a lot of global markets around the world,” Bailey says.
Tourism is also on the rise once more, says Bailey, especially from India and Southeast Asia. For the past decade, Australia’s luxury sector has been bolstered by Chinese tourists. Post-Covid, though, inbound numbers dissipated, and have yet to return to pre-pandemic levels. Chinese visitor numbers recovered to 60 per cent of 2019 levels in the year ended September 2024, according to Tourism Research Australia. India, on the other hand, is up 11 per cent on 2019 levels; and the UK, the US and New Zealand have almost fully recovered. Looking ahead, the Australian tourism industry is expected to continue its recovery.
Australia’s cohort of temporary visas and people coming to the country to study is a significant part of Australia’s luxury market, Bailey adds, noting high growth in this group as well. The return of international students and working holiday visas is also expected to contribute to the recovery of Australia’s tourism business.
This influx has helped to compensate for the decline in average discretionary spending for Australian households, as citizens cope with the high rents and increased cost of living driven by inflation. Plus, even for those business owners who are making good money, the cost of doing business — electricity bills, wages for employees — is also higher than typical, Chopra flags. “For businesses, you’re making more revenue, but your cost of doing business is also up.”
Interest rates are expected to come down in the next year — but not by much, says Tim Starling, director of Starling Retail Advisory. Plus, approximately 10 per cent of Australians were reportedly sheltered from high inflation. This top 10 percentile’s disposable income shot up post-pandemic.
The fact housing is becoming less affordable is, of course, a net negative for those looking to buy. But there’s a flip side, Chopra adds: if you’re a renter — rather than an owner — you have approximately 30 per cent more disposable income that isn’t going towards a mortgage. “As we find more and more people are ending up being renters rather than owners, our thesis is that the extra money that you save by not having a mortgage is going to end up in wellness, shopping and retail,” he says. Plus, this younger cohort that’s being driven to rent is keen on quality over fast fashion — boding well for luxury.
Australia’s luxury customer base is also wider than once expected, Starling says. “We thought luxury was so heavily reliant on the Chinese consumer,” he says. “However, in Covid and immediately post-Covid, when the borders were shut, we saw a huge spike in luxury sales.” This was, in part, because Aussie customers had money to burn. Solca calls it the “YOLO boom”, noting that Australia is no exception to the revenge spending that took hold globally. While sales have dropped below revenge spending levels, they have not dipped any further, which might have been expected due to a lack of Chinese visitors spending, Starling notes.
There’s incentive for brands to meet Aussie consumers where they are. “It’s so hard with shipping now, it takes nearly two weeks [for many goods] to get to Australia,” Elke Long, head of partnerships and collaborations at Réalisation Par, told Vogue Business of setting up shop in Sydney. “This is more of an instant gratification.”
Upwards or outwards
In the last year, brands have opened a slew of new stores across the country. Dior opened a new boutique in Sydney. Van Cleef Arpels opened its first Perth boutique. And just last week, Louis Vuitton opened a Brisbane flagship. In Sydney and Melbourne especially — which, Solca flags, still have the lion’s share of luxury — sizing up is the major trend. “In the key markets, particularly Sydney, [brands are] all still trying to redevelop their sites. Melbourne’s the same,” Starling says. “They’re trying to make sure they’ve got the latest, greatest shopping.”
Shopping centres are inviting these types of improvements, initiating major renovations of their own to appeal to luxury brands. Both Sydney’s Westfield and Melbourne’s Chadstone have undergone redevelopments and expansions in recent years.
In these cities, a lot of the major retailers are opting to either move into bigger spaces or renovate their current ones, instead of opening brand new doors, experts say — sometimes upping the amount of real estate threefold. “There’s a lot of money going into the fit-outs of those spaces,” Bailey says. Hermès, for instance, reopened its newly renovated — and expanded — Melbourne flagship in August 2024.
The fit-out is a safer bet for brands still testing the waters in Australia, she says, as the post-Covid spending boom wanes, but they still want to develop their presence in the country. “They’re not super keen to take big risks,” says Bailey. “At the moment, they’re really trying to just set down their footprint and instead of investing in new spaces, they’re investing in that fit-out over and over and over again.”
That said, brands should be wary of doing too much in this vein, Starling says. Off of the major post-Covid spike, brands got overly ambitious, he says. Now, some are scaling back. Brands that had been looking at upsizing or opening stores in second or third locations are hitting pause, he says. “There is still some definite expansion going to happen, but I think they all got a bit carried away and they’ve all realised it,” he says. “In Chadstone [shopping centre in Melbourne], for instance, all the brands that had 250-square-metre stores were looking at 600, 700, 800-square-metre stores. There’s no way they needed to do that.”
For now, any new space a brand opens is more likely to be elsewhere in Australia, CBRE’s Bailey flags, versus in a different market within a city in which it already has a presence.
New hot pockets
Brands that have established themselves in Melbourne and Sydney are now looking beyond. “The big growth that we’re now seeing is in markets like Brisbane, to a lesser extent Perth, a little bit of Adelaide,” Bailey says. Real estate ventures are paying attention; Christie’s International Real Estate is currently boosting its presence in Western and Southern Australia.
Brisbane is the next frontier for brands. Over the last five years, many young people moved out of Sydney and Melbourne, especially up to Brisbane. “They still want offerings that they had in Sydney and Melbourne,” Bailey says. As yet, they’re not all there: “Brisbane is undercooked.” And it’s keen — as are brands. “Every [brand] wants bigger stores and Brisbane flagships. There’s a lot more luxury coming into that market,” Starling says. “And they spend up there; they’re pretty flashy.”
In Brisbane’s CBD (central business district), brands are amping up their presence. Louis Vuitton opened a flagship in Queen Street Mall in 2023, larger than its former Brisbane location. In January 2024, Tiffany opened a major flagship also in Queen Plaza, its first in the city. And in December 2024, Dior doubled up on its Brisbane presence with a menswear boutique in the city, following a successful 2022 pop-up.
Now that the luxury audience is there — alongside a solid set of brands — others would be smart to follow, says Gennaro Autore, founder of retail consultancy Graaf Group: “Brisbane is booming.” If there’s a luxury boutique in Brisbane, locals will spend there, he says — rather than flying to Sydney for the sole purpose of shopping.
About an hour’s drive from Brisbane, Gold Coast shopping centre Pacific Fair is also facilitating further luxury development. Gold Coast shopping street Elkhorn Avenue has long had key players like Prada, Gucci and Louis Vuitton, Starling flags, but now he expects that brands will double their luxury footprint in the area. “They weren’t new [in the Gold Coast]. They just went to Pacific Fair for the new shopping centre development,” he says. “Now that sales are really strong there, I expect they’ll keep developing it.”
On the West Coast, Perth is another Aussie city attracting more wealthy residents. It’s largely down to the area’s mining boom, which generates lots of cash. It’s slightly harder for brands to service, by virtue of being on the West Coast (versus the East Coast, where all their other stores are), Bailey flags, but the consumer base is there. Cartier, Van Cleef Arpels and Rebecca Vallance all opened in 2024, while Chanel, Louis Vuitton and Gucci each expanded their presence. Dior is set to open early this year; and Starling says that Kering brands like Balenciaga and Bottega Veneta also have their eyes peeled. “In the next 12 to 18 months, you’ll see those brands open,” he says, adding Moncler into the CBD mix as well.
South Australia, less typically grouped into the luxury cluster, is also on the up. In Adelaide, redevelopment at Burnside Village shopping centre is attracting luxury brand interest. It’s been brewing: in late 2023, Louis Vuitton did a pop-up on Rundle Mall shopping street. It turned over approximately AU $20 million across the three-month pop-up, according to Starling. In December 2024, it opened another pop-up at Burnside, where it’s also building its first permanent store. “[The 2023 pop-up] just proved to LV why they’ve been looking for so long, because the sales appetite is here,” Starling says. He expects many more luxury brands to set up there in late 2025 or 2026, adding that he anticipates for the South Australian city to really take off mid-2026.
Season swap
It’s one thing to set down roots in Australia. It’s another to get the product mix right. Like other outposts south of the equator, Australia presents a challenge for luxury brands in that its seasons don’t match up with the collections brands are producing. “The reverse seasons are tricky,” Starling says.
It’s complicated further by the country’s varying climate within its borders. Melbourne is the only Australian city that gets properly cold in winter, with Adelaide and Perth cooling down. “To deal with those reverse seasons when each city has its own climate is quite a challenge,” Starling says. The silver lining is that many of these brands are predominantly selling accessories, he adds, meaning the impact is low. Ready-to-wear brands are a different story: “It certainly impacts them.”
Brands are still figuring it out. Sydney shopper Effy Kios recalls going into a designer store from Paris in Sydney’s CBD in December 2024. “They’ve got all their winter season clothes out; they’re following the European seasons. That doesn’t suit us when it’s a day with 40-degree heat,” she says. “You’re not going to go and shop for that.”
If brands wait, there are also downsides. Starling recently went into Moncler, which is one of his clients. “I’ve been after a men’s jacket for a while, and of course it’s been summer here.” Australia has recently got some of the brand’s winter season, which has been available since last season in Europe. “I find that interesting as a consumer,” Starling says: “If you know that something’s available but you can’t get it because of the reverse seasons, are you going to buy it overseas instead, knowing you can get it?”
A safe bet
For brands looking to up their Australian investment, it’s worth ironing out the kinks that come with long-haul flights and opposite climates. “The long term is very good,” Starling says. “You’re going to see a continued development of these luxury brands.” Come 2028 to 2030, the retail advisor anticipates openings in the country’s newest hotspots — especially Brisbane and Perth — will really pick up.
There are still major opportunities for wealth creation in Australia, Chopra says. “Wages are growing at a very good rate, employment conditions are very good — so businesses will flourish,” she says.
As global turmoil creates a shaky environment for luxury, Australia is relatively insulated, experts agree. “Australia is always going to be pretty stable and pretty strong,” Starling says. “It does have that level of insulation from a lot of the chaos, just by virtue of being far away.”
The distance from luxury’s primarily European hubs is both a pro and a con — but it’s a distance worth travelling in 2025.
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