Australia's prime residential market was the strongest performer during the second quarter of the year, with prices remaining resilient despite the impacts of the COVID-19 outbreak, according to the latest study by Knight Frank.

The Australasian and the North American region were the most resilient during the quarter, but the former reported the strongest performance on an annual basis. In fact, the Australasian region recorded an annual gain of 2% over the June 2020 quarter.

"The relatively strong performance of Australian cities was a result of the shallow number of listings, keeping property prices firm, and by global comparison, we have largely escaped the major impact of COVID-19," said Michelle Ciesielski, head of residential research in Australia at Knight Frank.

Five Australian cities — the Gold Coast, Sydney, Perth, Brisbane and Melbourne — placed in the top 24 luxury residential markets in the latest Knight Frank Prime Global Cities Index.

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Of the five cities, the Gold Coast placed the highest at 10th place, reporting an annual price growth of 3.4%. Sydney and Perth followed, both clocking 3% gains. Brisbane came in at 16th with a 2.5% gain and Melbourne placed 24th with a 1.2% growth.

Shayne Harris, national head of residential at Knight Frank, said the demand for luxury property in Australia is slated to remain strong, especially given the interest of ultra-high-net-worth individuals for spacious dwellings.

"In cities such as Sydney we are seeing more demand for higher-value properties such as large detached homes or generously-sized apartments, which is supporting prime residential values," he said. "During the pandemic, we've seen the ultra-wealthy make their next residential property purchase decisions based on liveability, so places like South-East Queensland will become more attractive in a post-COVID world."

Harris said the housing conditions are currently favourable, making the odds of a surge in distressed sales very low. He said what happened during the 2008 global financial crisis is very unlikely to unfold in the current market setting.

"Lending criteria are tighter, new supply is constrained in several cities, interest rates are low and there is currently assistance on offer from both lenders and governments," he said.