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Australian Prime Waterfront Properties Show Premium

Overseas property investors look to buy Australian prime waterfront properties can expect to pay a premium of up to 65 per cent compared to comparable properties situated inland.

The Knight Frank Prime Waterfront Index, released this month, has found that of Australia’s prime properties considered the top 5 per cent of the market – those with absolute water frontage are worth, on average, 65 per cent more than comparable homes inland.

The waterfront report, which measures how much uplift value an absolute waterfront location – where a property’s boundary is immediately adjacent to the waterline can add to a property, revealed that prime waterfront properties in Sydney, followed by the Gold Coast and Perth offered the most.

Knight Frank’s Head of Residential Research Australia Michelle Ciesielski said that while harbourfront properties in Sydney commanded the highest premium of all waterfront properties, prime coastal homes across the country enjoyed up to 61 per cent added value compared to similar properties inland.

The Knight Frank figures suggested the proportion of waterfront properties sold compared to the total number of prime property transactions was as high as 42 per cent in the 12 months to the end of September.

Looking further into the sales figures found that coastal homes were the most popular of all blue-ribbon waterfront sales, comprising of 46 per cent of the transactions.

Gold Coast prestige realtor Michael Kollosche said premium beachfront property in the area was transacting quicker during 2019 than at any other time in the past decade.

Having been heavily impacted by the fallout from the global financial crisis in 2008, which resulted in beachfront properties transacting at 50 per cent less than what the owners bought them for, today’s prestige buyers are more conservative buying for lifestyle purposes with little to no debt.

Mr Kollosche said: ‘There’s very limited stock on the market, with owners in most beachfront areas, such as Mermaid Beach and Palm Beach, wanting to retain the assets, so it’s leaving very little opportunities for buyers to get into the market.

‘It means buyers are having to come to terms with paying considerably more than what they would have done previously.’

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