Increased appeal of waterfront homes
Published on: Monday, March 25, 2019
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The property should be elevated above the water and, if on a river, should ideally be positioned on a winding section where the pace of water flow is slower.
Fast-moving streams and rivers are often avoided as this suggests wealth can roll away.
Feng Shui is usually fundamental to Chinese buyers’ decision-making, said Knight Frank.
“Water has global appeal... by producing negative ions it boosts energy with research showing its significant health benefits. For Asian and especially Chinese buyers, water is more than a mood enhancer but critical when considering the location and type of property to purchase,” it said.
According to the new Knight Frank Global Waterfront report, compiled based on valuations from Knight Frank’s global network, prices for prime waterfront properties are, on average, 40 per cent higher than comparable properties inland.
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.
Harbour-side addresses command the highest premium at 59.1 per cent, followed by beachfront homes (58.5 per cent), river (36.8 per cent) and lakeside (32.7 per cent) homes.
Australia dominates the Knight Frank Global Waterfront Monitor with Sydney (89.3percent), the Gold Coast (64.1 per cent) and Perth (53.2 per cent) leading the rankings. Dubai (50.7 per cent) and Paris(48 per cent) are in fourth and fifth position.
“Waterfront addresses are among the most desirable in the world. However not all prime waterfront properties are equal and the premiums vary depending on location and amenity,” said Liam Bailey, Knight Frank global research head.
According to Bailey, the waterfront market is among the most liquid.
Even in a depressed market, due to their position and scarcity, frontline waterfront properties will command strong demand as prospective buyers are aware that their future exit strategy will be assured.
Analysis shows there is some correlation between the volume of water and the premium generated.
Where water is in abundance — island properties such as in Hong Kong and Singapore — the premium is smaller.
Singapore registers the lowest premium (seven per cent) and our research confirms that sea views command a higher premium than those of rivers.
Waterfront homes are most popular amongst British buyers, followed by those from the United States, Canada and Germany.
Dominic C. Heaton-Watson, associate director of international project marketing at Knight Frank Malaysia, said 2018 was a fascinating year for its Malaysian clients seeking waterside real estate around the globe.
He said Knight Frank advised clients on riverside investment properties in London, second homes in Dubai and Europe, as well as trophy assets across the US and Australia.
“Some high-profile waterfront developments we advised our Malaysian clients on last year included One Blackfriars in London, Pure Living in Berlin, The Royal Atlantis in Dubai, Crown Residences at One Barangaroo in Sydney and Sabina Applecross in Perth, demonstrating a truly global appetite for best-in-class waterfront residences,” he said.
Waterfront addresses are among the most desirable in the world, from the panorama of Sydney Harbour to the serenity of Lake Geneva and from Hong Kong’s bustling waterways to the iconic Thames skyline, said Knight Frank.
“Such is the demand for frontline property... be it on a beach, river, lake or harbour we’d take a closer look at what price premium such properties generate and how this varies around the world,” it said.
Knight Frank said data shows that individuals from all over the world searched for prime waterfront property last year, led by prospective buyers from the UK, the US, Canada and Australia.
“The lifestyle and additional amenities that a waterfront home offers is a key motivation for many buyers. From private moorings to jetties and quays, waterfront properties offer easy access to numerous watersports along with an ever-changing panorama.
“By classifying each property according to its characteristics and exact location, our data reveals that being located alongside a harbour generates the highest premium of 59.1 per cent.
However, at 58.5 per cent, a beachfront home is not far behind with Sydney and the Gold Coast registering some of the highest uplifts.”
At 89 per cent, Sydney sits in first place generating the highest premium for waterfront properties. Here, homeowners vie for the best views of the Harbour Bridge or Opera House.
On why Sydney leads the rankings, Michelle Ciesielski, Knight Frank’s director of research said: “From its iconic New Year celebrations to the starting point of the Sydney to Hobart yacht race on Boxing Day, residents are treated to expansive views of one of the world’s best waterscapes.”
Perth (53 per cent), Dubai (51 per cent) and Paris(48 per cent) sit mid-table but unlike Paris, where new-build opportunities are scarce and waterfront homes are older high-ceilinged Haussmann homes along the Seine, both Perth and Dubai’s waterfront offerings are skewed towards new-build beachfront living.
Knight Frank’s research manager in Dubai, Taimur Khan, said: Palm Jumeriah, overlooking the Arabian Gulf, is Dubai’s most desirable waterfront location.
He said the scarcity of the product, along with the fact that waterfront properties are usually best-in-class in terms of specification and amenities, has insulated value of such developments over the last decade.- NST Property
