Australian Waterfront Report 2022

Updated: Apr 14

The desirability, rarity, and price-point of waterfront real estate in Australia means that such properties dominate the super-prime markets. Over the last year, one-in-three (32.9%) of the 374 super-prime residential sales were found to be located on the absolute waterfront across Australia.

The most popular type of ‘waterfront’ for super-prime sales is the harbour, representing an emphatic 64% of super-prime sales in the last year. This has also risen in the last year, from 48% in Q3 of 2020. This reflects the surge in the super-prime market this year, which Knight Frank research showed more than doubled in the first three-quarters of 2021. Properties with coastal frontage represented 16% of total sales in 2021, followed by 13% on a canal and 7% on a river.

Knight Frank Australia Head of Residential Research, Michelle Ciesielski, said: “The nature of waterfront real estate is that it is a tightly held market, with a finite amount of available land that can house such properties, and steady demand year-on-year.

We also know that one of the effects of the pandemic has been an increased focus on the importance of the home, with many wealthy and ultra-wealthy Australians inclined to deploy their capital onshore here where they otherwise would have spent it overseas. This likely reflects the increase in price premium attributed to waterfront properties in 2021, increasing by 14.4% in the last year to represent a 79% price premium on their inland equivalents.

“Given the lengthy pandemic lockdown endured, it’s perhaps not surprising that waterfront homes in Melbourne have experienced the strongest growth of the five major Australian cities, with the waterfront premium increasing from 30% in Q3 2020 to 37% in Q3 2021.

“Sydney has taken the top position for greatest average uplift in waterfront sales this year, rising by 13.5% in the last year to 119% in Q3 2021. Interestingly, the prime markets in both Gold Coast and Perth continue to assert their growing share of voice, with the Gold Coast following Sydney at a premium of 71% in Q3 2021, representing a growth of 5% year-on-year, and Perth recording an average uplift of 67% at 9.5% year-on-year growth. Brisbane’s prime market has been dominated by interstate buyers and local upsizers who favour riverfront real estate in prestige suburbs, averaging a waterfront premium of 54% at a 14% uplift.”

Direct access to water and exclusive maritime facilities is a key indicator of value in the waterfront market, with buyers willing to pay a premium for the one-in-three waterfront transactions in the last year that included an exclusive maritime facility like a jetty, pontoon or mooring.

With price premiums for waterfront properties rising across the board, the properties with harbour frontage represented the greatest premium at 114% in 2021. However, properties fronting the coast saw the greatest rise in premium, increasing 22% year-on-year to hit 86% in 2021. The privacy and appeal offered by private beach access is also evident, with the premium paid for private beach access rising from 55% in 2020 to 65% in Q3 2021.

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