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Prime waterfront properties command 63 per cent premium

Prime absolute waterfront properties in Australia are worth up to 63 per cent more on average than their inland counterparts, according to Knight Frank’s latest Australian Prime Waterfront Index.

The Index, which measures how much uplift value an absolute waterfront location can add to a property, found the premium was the greatest in Sydney, with up to 94.9 per cent in value added in Q3 2019, an increase of 56 bps from one year earlier.

This was followed by the Gold Coast, where the very best waterfront homes commanded premiums of up to 66.5 per cent (up from 64.1 per cent the year prior), Perth, which saw an uplift of 53.6 per cent (similar to one year ago) and Brisbane, where values were up 45.1% per cent This was the first year Brisbane was included in the index.

The Knight Frank research found Melbourne bucked the trend, with the premium paid for prime absolute waterfront properties falling from 30.4 per cent to 27.3 per cent, with waterside living in the city being less desirable than being well-located to private schools and traditional shopping villages.

Of all the waterfront location types spanning Australia, the Australian Prime Waterfront Index found homes situated on the harbourfront commanded the largest uplift of up to 97 per cent, driven by Sydney’s ‘money shot’ with both the Sydney Harbour Bridge and Opera House within the frame.

Prime coastal properties enjoyed an uplift of 61 per cent compared to similar properties inland, while riverfront properties – the most prevalent waterfront living – achieved a premium value of more than 57 per cent. Less common across the cities, canal waterfronts saw a 50 per cent uplift in value.

Knight Frank’s Head of Residential Research Australia Michelle Ciesielski said not all absolute waterfront homes are equal and this was reflected in the Index, with premium values varying in each city, and by the type of waterfront.

“It’s common to see those buying prestige properties redesign the home to match their style, but fundamentally, the waterfront location remains,” Ms Ciesielski said.

“Waterfront living is the ultimate lifestyle choice and this helps to underpin the value of these properties.”

Knight Frank’s Head of Prestige Residential Deborah Cullen said for those looking at buying on the waterfront in Sydney, the harbour is the absolute pinnacle.

“Across Australia, the research found the Sydney suburbs of Mosman, Point Piper and Rose Bay, all of which have views of Sydney Harbour, had the highest number of absolute waterfront super-prime properties sold in the three years to Q3 2019, with sales of 14, 12 and six homes respectively,” Ms Cullen said.

“This demonstrates the demand we continuously see for these homes, from both local and overseas buyers, who are prepared to pay the premium it takes to secure such special properties, but like any waterfront properties, they are also very tightly held.

Waterfront properties in Sydney are the “best in class” and with higher buyer demand and limited supply, they will always command high premiums, in any market.”

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