Three types of Lifestyle Features have an impact on the value of real estate if property has frontage/proximity to them or views of them: water, golf courses and lifestyle precincts.
Any residential property with those influences will command a price premium, compared with standard homes in the area. Of these, water commands the greatest premium.
Water has had a reputation as the ultimate millionaire-maker of property, although this is often over-stated.
Homes which front water – the ocean, canals, rivers and lakes – are usually very expensive, so the market for them is limited to a small top-end market segment.
Such markets can be volatile and are seldom market leaders on long-term price growth.
Which water is best?
Brisbane analyst Michael Matusik of Matusik Property Insights ranks water like this:
- North-facing property on to ocean frontage or views.
- East-facing property on to ocean frontage or views.
- North-facing property on to canals, without restrictions to open water access.
- The river and the rest.
For a while property watchers speculated that golf might be “the next water” – i.e. that homes fronting golf courses might match water-based property for popularity and value, creating what some referred to as Tee Change. That has not happened and is unlikely to.
Nevertheless, experience shows the market pays a premium for property in a golf course environment – the premium is not as high as water-based property, but two identical houses in a suburb will command different prices if one fronts a golf course and the other does not.
An analysis of vacant allotment sales at six key Queensland golf estates by Matusik Property Insights found that buyers were prepared to pay an average premium of 92% to live on a golf course fairway.
How big a premium golf property can achieve depends on factors such as the brand name on the golf course.
Courses designed by big names such as Greg Norman attract higher premiums (and the land sells faster) than land in a non-brand golf course estate.
Buyers will also pay premiums for homes within 500m of noted lifestyle precincts – suburban high streets or café strips.
Such properties in Brisbane have risen in value at faster rates than the Brisbane average.
“Buyers in these higher-priced locations were paying 61% more than the average in 2002,” Matusik said.
“This premium lifted to 81% when compared to today’s median price. When comparing the results against the inner-city median house price, we found that the premium paid to live near a high street was 10% in 2002 and 16% today.”
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The next article in this series is How to Identify Real Estate Hotspots #05: The Boom Town Syndrome
This is a joint publication of Snowden Parkes and Ryder Property Research.
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