“Also, Australia is known for its balmy outdoor lifestyle, so many buyers in this super-prime space are willing to pay a premium to secure the ideal position along the waterfront.”
The average premium paid for a waterfront property across the 17 cities was 40 per cent, and prices for waterfront homes climbed an average of 10.9 per cent over the year to June.
Beachfront homes were in the strongest demand, commanding a premium of 63 per cent. Properties in harbor locations were a close second, with a 62 per cent premium, and coastal homes secured at a 40 per cent premium.
In Sydney, it was harborside homes that typically saw the greatest premium, said Michael Pallier of Sydney Sotheby’s International Realty. Such homes were closer to the city and were more likely to offer direct water access than beach homes, which typically sat across the street.
“Point Piper would be number one, it’s the best of the best, but the non-waterfront homes there are also very expensive,” he said. “You’ll probably still spend 100 per cent more on a waterfront though.”
Buyers in Sydney’s prime waterfront markets could expect to pay at least double to get a home on the water, even when moving from one side of the street to the other, Pallier noted.
Such homes drew interest from both local and international buyers, he said, and reaching the waterfront was the goal for many cashed-up buyers.
“It’s a personal milestone for a lot of people, we have a beautiful harbor … and people want a slice of it.”
In Melbourne, Nick Johnstone, director of Nick Johnstone Real Estate in Brighton, has a list of clients waiting for a beachfront property.
“They’ll pay whatever is required to get beachfront, but homes are so tightly held and pretty much generational, where people don’t want to sell,” he said. Owners may instead pass property on to their children.
The rarity of beachfront homes made them hard to value, Johnstone said, but estimated they sold for at least 100 per cent above a mid-range property in the same exclusive suburb.
“[Such homes are] rarely coming up and when they do, we are absolutely smashed with inquiries. There are just not that many beachfront properties and they’re not making any more,” he said.
Interest in waterfront homes came from local, interstate and overseas buyers — who were largely from China, or Australian expats returning home. Buyers from Melbourne’s eastern suburbs had also been increasingly moving to the Bayside region since the start of the pandemic, as buyers prioritized lifestyle locations.
The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.