Covid-19 has had a dramatic impact on migration and property values, but for Australia’s wealthiest neighbourhoods, it’s business as usual.

Australia’s prestige property market continues to surge, a sign that the rich have insulated themselves from the pandemic.

Home values in Toorak—one of Melbourne’s most prestigious suburbs—surged nearly 20% to $4.575 million in the 12 months through July, according to data compiled by realestate.com.au.

Sydney’s Clontarf suburb saw average home values spike 27.6% to $3.8 million over the same period.

Whilst at home in Perth, high-end properties have been selling at the fastest rate seen in years. Sean Hughes from Realmark Coastal noted that “the hardest part for agents at the moment in Perth is getting the stock as buyers seem to outweigh the sellers!”

In these high-end locations, low supply is driving up prices among white-collar workers who haven’t been impacted by the lockdowns.

“What is happening across Australia is a really strong shift to premium properties. We are seeing some decent price growth in premium suburbs,” said Nerida Conisbee, chief economist at realestate.com.au.

She added:

“The best performers continue to be premium suburbs. To-date, most well paid, white-collar professionals are still employed and may have only had minor cuts to their incomes.”

While demand for premium property continues to grow, the same cannot be said for the rest of the market. Covid-19 has not only impacted jobs and savings, but population growth as well.

Immigration has always been a major catalyst for home demand. But Australia’s population will grow by just 0.6% this year, the lowest since 1917.

CoreLogic, a property data aggregator, expects property prices to fall in major cities like Sydney and Melbourne. Inner city rents are also expected to decrease. Without strong immigration, CoreLogic says there has been a mass exodus from inner suburbs.

We are only just beginning to see the full effect of Covid-19 on our economy. As the recovery takes shape, Australians should brace for the “new normal” impacting everything from employment to shopping and even where we live.