What to consider before buying waterfront property
Australians have had a long lasting love affair with the coastline. But you would think that having so much land with water lapping on it, prices for dwellings with water views would be reasonable.
But they attract a hefty premium, putting waterfront property out of reach of many buyers. This is because we are a highly urbanised culture. For every Country-town dweller there are thousands more people choosing to live in our cities. We like congregating, and where we congregate only has a limited supply of waterfront property to share around.
Be it a river, lake, canal development or ocean shore, there are only so many waterfront properties that can be crammed in the top spots, and demand for water views or lifestyle locations is only going to increase as our population grows and cities expand. What that all means is that if you want to live within casting distance of fish, be prepared to pay for it.
That's not to say there aren't well-priced properties with water views possessing great prospects for growth though. While you might not have the finances to become Malcolm Turnbull's neighbour at Point Piper in Sydney, a three-bedroom house on the slopes of Castle Hill in Townsville with views out to Magnetic Island is definitely within reach.
As with all property-buying decisions, desire should be tempered with pragmatism. Plenty of people have been burnt buying prime waterfront homes or apartments in boom times in the mistaken belief they will only climb in value. That’s not automatically true.
Also, growth performance in percentage terms can be well below that on offer in less attractive but more practical locations.
But if you do some research, you can come out a winner both in terms of capital growth and amenity.
What should the home buyer who craves a waterside location and a property which keeps pace with the market look for? Here a few things to think about:
As you might expect, water views in Sydney come at a hefty premium over the rest of the market, with buyers needing an impressive amount of money to successfully buy.
Yet some of the best-performing locations can be some distance away from the headline-capturing mansions in Point Piper and Vaucluse - suburbs like Concord and Picnic Point spring to mind. This is a pattern which plays out in most cities, with waterfront suburbs popular with urban professionals and areas we used to call working class home to stock with excellent potential.
In Brisbane the comparison would be the upmarket suburb of Hamilton compared to Murarrie, and in Melbourne it would be Albert Park versus, say, Point Cook. Remember, today's run-down port area could be tomorrow's marina and five-star hotel precinct, so don't be afraid to look outside established areas.
On rare occasions it's the building that gives a property its allure. Mostly though it's the land content. Buyers who want a waterside property which keeps pace with the market should ensure land value makes up a solid percentage of what they purchase. Ideally buyers should look for a block large enough for subdivision, so they have the option to sell off part of the land or expand as needs change. That value in that flexibility is true of all properties, waterfront or not.
3. What to look for
Once you have identified a suburb, it pays to do your research and ensure you understand the intricacies of the neighbourhood. Good areas to target are ones where sales are historically few and far between. This usually means the owners are loathe to let their properties go because the location is desirable.
If you find a lot of properties are being turned over frequently, the chances are that location will have some in-built annoyances. One factor often overlooked, particularly with ocean-front properties, is the weather. There is no point having a large balcony if the wind that comes up every afternoon makes it impossible to sit on and enjoy. Make sure your living areas can be shielded from the extremes of sun, wind and rain.
Another is maintenance. Salt air can be a punishing neighbour, causing corrosion and constantly clouding glass panes. Look at the type of dwelling you are considering buying and get a handle on how much work you are going to have to do to enjoy that view.
Views play a critical part in the pricing of ocean and river properties. A well-located property with good views of the river or ocean will sell for significantly more than a property without views. A good tip is to try to buy an older-style property with good views because the value of the land is worth significantly more than the house.
5. Distance from the water
You should aim to buy a home within easy walking distance to the water. People like to walk to the waterfront rather than having to drive their car. If you are considering buying a property, then physically walk the distance to the waterfront because driving in the car gives a false sense of the distance.
6. The best time to buy
Winter months tend to be the best time of to buy. All that water doesn't look so appealing when your teeth are chattering. Demand for waterfront stock tends to peak during the summer months and declines during the winter. With fewer buyers in the market, the winter months give you a hotter chance at snaring the property you want.
7. Lifestyle factors
The view is one thing, but what else is there? There's no point having a great vista if you have to drive 10km to get a coffee. Issues such as proximity of restaurants and cafes are becoming more significant in driving property values for waterfront properties as much as anywhere else. A good tip is to buy into a new ocean or river suburb where these facilities are scarce but planned for. This means you will pick up capital growth down the track when the baristas set up shop.
Here are some suburbs with waterfront areas containing good potential: