Australian waterfront properties commanding some of world's highest premiums

Australian cities have taken three of the top five slots in a global real estate list that measures the potential value uplift for prime homes on the water’s edge.

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Luxury waterfront properties in Australia command some of the highest premiums for the views and location compared to the rest of the world.

Australian cities have taken three of the top five slots in this year’s International Waterfront Index, with Sydney leading the rankings and Gold Coast and Perth in the top echelon.

Brisbane (6th) and Melbourne (10th) also made the top 10.

The index measures the potential value uplift for prime homes on the water’s edge compared with similar properties located further inland without access to, or a view of, water.

A Sydney waterfront property in the city with iconic views across its harbour attracts an average premium of 121 per cent compared to an equivalent home set away from the water.

New Zealand’s Auckland on the country’s North Island was second with a premium of 76 per cent, edging out the Gold Coast (71 per cent) and Perth (69 per cent). The Cap d’Antibes peninsula (59 per cent) in the South of France was fifth, the highest European entry in the list of 17 international locations.

The average international premium for a waterfront property compared with a non-waterfront home was 40 per cent in Q2 2022.

Waterfront Property Premium By City

Michelle Ciesielski, head of residential research at Knight Frank Australia said beachfront property was the most sought-after location, with waterfront property there attracting an average premium of 63 per cent. This narrowly pipped a harbour location (62 per cent), with coastal, where waterfront buyers pay an average premium of 40 per cent, third.

“Regardless of the season in Sydney, there is always strong appetite for waterfront homes, especially those with uninterrupted iconic views of the Sydney Harbour Bridge and Opera House,” said.

Around the world, waterfront properties performed relatively strongly compared to inflation and non-property investments. In the 12 months to June 2022, the average price increase for a waterfront property in the index was 10.9 per cent.

Lockdowns and covid did nothing to deter potential buyers, with 42 per cent of respondents to Knight Frank’s Global Buyers Survey stating they were more likely to buy a waterfront property as a consequence of the pandemic.

“The pandemic and successive lockdowns have put greenery and space at the top of buyers’ requirements for homes, fuelling sales and price growth in prime regional markets, while low supply has also kept upwards pressure on prices,” Ms Ciesielski said.

Chris Druce, senior research analyst at Knight Frank said globally the pandemic has led to a fundamental reassessment of housing and lifestyle requirements.

“For many, being near the water with more space and greenery has been a primary driver, and with supply limited in all markets this has supported price growth and premiums,” he said.

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