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Sydney’s cashed-up home buyers have long paid top dollar for properties on the waterfront, but the premium required has soared to new heights.
Waterfront properties in the harbour city now typically cost more than twice the price of their inland counterparts, but premiums can reach well above that in highly desirable pockets.
The premium paid for a waterfront home in Sydney has reached new heights. Credit:
Sydney recorded an average waterfront premium of 121 per cent last quarter, topping the latest Knight Frank International Waterfront Index, which compares the prices of such homes with equivalent properties set back from the water. That is up from a 95 per cent premium in 2019.
Michelle Ciesielski, head of residential research at Knight Frank, said waterfront premiums had been rising before the pandemic. But the appeal of such homes grew as Australians spent more time at home due to lockdowns, remote working and closed international borders.
Nationally, waterfront homes sold for an extra 81 per cent on average. Harbour-front homes across the country had the highest premium, at 116 per cent, followed by coastal, that is, homes fronting the coast without direct beach access, perhaps on a clifftop (89 per cent), riverfront (68 per cent) and beach homes (65 per cent), when compared with equivalent properties one mile (1.6 kilometres) back.
“Sydney is iconic around the world for its position on the harbour … [there’s] quite a difference if you’re looking at a waterfront compared to a home just a couple of streets back,” Ciesielski said.
Sizeable price gaps can be found in even shorter distances in some affluent neighbourhoods, where the side of the street can make an eight-figure difference.
In Point Piper, a waterfront five-bedroom house with a boathouse and deepwater berth sold for $45 million this year, while the six-bedroom house across the street sold for $15.01 million in 2021.
In Watsons Bay, a doer-upper on the beachfront sold for $27 million in November, while an original-condition four-bedroom house around the corner sold for $12.38 million.
A three-bedroom waterfront home in Birchgrove, with a private jetty, sold for $8,115,000 in April. The four-bedroom terrace across the street on a slightly smaller block sold for $3.9 million.
A three-bedroom waterfront home on Birchgrove’s Wharf Road, with a private jetty, sold for $8,115,000. A three-bedroom home across the street sold for $3.9 million.Credit:
Buyer’s agent Simon Cohen, chief executive of Cohen Handler, said waterfront homes in the eastern suburbs could be at least twice the price of non-waterfront properties in the same street.
“On Wolseley Road [in Point Piper], The Crescent, Coolong Road and Fitzwilliam Road [in Vaucluse], you definitely see a doubling of the prices … on The Crescent it could be three or four times higher to get something on the waterfront,” he said.
Tightly held harbour homes, particularly those with deep waterfront jetties, were the most desirable, Cohen said, and interest mostly came from locals looking to upgrade. Demand was holding up in the cooling market, but there were a few waterfronts “hanging around”.
A waterfront five-bedroom house in Point Piper, on Wolseley Road, sold for $45 million earlier this year.
A non-waterfront home on Wolseley Road sold for $15.01 million in 2021.Credit:
“I think they’re probably hard to sell because they may have some warts on them, but the good stuff will sell very quickly.”
Most in the eastern suburbs were undeterred by the threat of rising sea levels, he said, but buyers were more wary when looking at beachfront homes in areas such as the Central Coast.
Nigel Mukhi, of Di Jones Neutral Bay, has noticed an influx of buyers shopping for waterfront homes, but properties were in short supply.
“Convincing people to sell them is hard. Buyers understand a lot of these properties are a once-in-a-lifetime opportunity, and it’s a matter of getting something, not how much they pay.”
Homes on the waterfront side of Elamang Avenue and Kirribilli Avenue in Kirribilli, and Bay View Street in McMahons Point, could fetch at least twice the price of similar homes on the high side of the street, he noted.
Waterfront apartments were also in strong demand. Units with views of the Harbour Bridge and the Opera House commanded the greatest premiums, and were particularly popular with overseas buyers.
“They all have a water view, but if it’s a view of the icons, that can easily add $1 million-plus [to the price of an apartment],” he said.
Danny Cobden, of CobdenHayson, said premium properties in Balmain and Birchgrove had outperformed other price points.
A waterfront home in Cronulla sold for $7.4 million last year, while the home across the street sold for $4.65 million.Credit:
He noted a waterfront Louisa Road home with a mooring and Harbour Bridge views recently sold for $9.75 million, up about 60 per cent from its 2018 sale price. Other properties in the area had seen price lift of 30 to 40 per cent over that time.
While waterfront homes were more valuable, the premiums were smaller when comparing them with non-waterfront homes on desirable streets. However, they could be more than twice the price of equivalent homes in other parts of the suburb.
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