Globally, Waterfront Properties Enjoy a 118 Percent Price Premium in 2023

Globally, Waterfront Properties Enjoy a 118 Percent Price Premium in 2023

Residential News » Palm Beach Edition | By Michael Gerrity | July 14, 2023 8:05 AM ET

Based on Knight Frank's 2023 Global Waterfront Index, waterfront property generated a 118% premium on average around the world, down only marginally from 121% last year, as Sydney retains the top spot.

Trophy homes with views of Sydney Harbour Bridge and Sydney Opera House face stiff competition.

If evidence were needed, the 76 Crown Residences at One Barangaroo, located on the iconic Sydney Harbour, has made up 79% of Sydney's super-prime CBD apartment sales since March 2021. Each apartment enjoys uninterrupted water views with a starting price of $6.5 million.

Sydney's antipodean neighbor, Auckland sits in second place in this year's rankings, with a waterfront home commanding a 58% premium.

European destinations including Monaco (42%), Cap d'Antibes (40%) and Paris (38%) complete the top five.

Why such a premium?

The scale of the uplift is attributable to supply and demand.

Frontline water access is a rarity in cities and protected areas of outstanding natural beauty.

As evidenced in Palm Beach, tight building restrictions will limit the availability of stock, whilst on the demand side, investors vie for such homes alongside second home purchasers, given their rentability as holiday lets and above-average occupancy levels.

With rarity comes resilience. The desirability of waterfront homes and the potential they offer as an inflation hedge alongside capital preservation is likely to see demand swell further given the current economic backdrop.

Beach is No.1

Different types of waterfronts generate different premiums. Target a beachfront home if you want the biggest uplift. Beachfront homes have extended their lead since last year, such a home now enjoys a 76% premium, up from 63% in 2022. Next come harbor and riverside locations but the data reveals the premium for a riverside location has swelled whilst a harbor destination has ebbed in the past 12 months. Data from Rightmove Overseas suggests the appetite for waterfront living looks set to persist. Waterfront search terms, from "sea views" to "lake" and "beachfront" accounted for four of their top ten keyword search terms in April 2023.

Luxury Property (Sydney, Australia).jpg
Luxury Property in Sydney, Australia

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