River and Ocean Views Command a Premium, but there’s more to it than that
Perth has long had a love affair with the Swan River and its wonderful beaches, and that is strongly reflected in property prices.
And you don’t have to be an analyst to know that properties in riverside and beachside suburbs tend to dictate higher prices and those that command views, achieve even higher prices again.
We’ve long thought of this as a view factor … and it’s true that a great view commands a premium price.
However, recent analysis performed by PropertyESP has found that it’s even a little more complicated than that.
We have recently been focusing on the apartment market in North Fremantle, South Fremantle and North Coogee … all suburbs in close proximity to the ocean or the Swan River.
What we found is that, within the water-front properties there was a distinction between those on the edge of the water and those a little further away.
In fact, properties at the water’s edge commanded a 20% (for river edge) and 13% (for ocean edge) premium in price per square metre over their ocean front counterparts.
Water’s edge properties are those properties where there is little more than a footpath or a cycle path separating the property from the riverbank or the beach. You could walk out the front door carrying an afternoon bevvy and sit at the water’s edge to watch the passing flotilla or birdlife.
Ocean front properties on the other hand are those where there’s a little more to negotiate between the front door and the riverbank or beach when carrying your bevvy (and you may want to be wearing a little more than your swimwear).
They still have the views that people pay a premium for, but when you walk out the front door there’s a major road (likely to be busy in summer) to cross before you get to the water.
And whilst the size of the price premium varied for different sized apartments (1 bed, 2 bed and 3 bed) and in different suburbs, for the most part this rule held true. When it didn’t, there were other factors at play, such as differences in the mix of properties for sale etc.
So what’s the big deal?
This extra factor is something that some developers can work to their advantage with the right property. And at PropertyESP we are all about maximising price!
The MRA’s Scarborough Redevelopment has already catalyst sales of new and modern ocean front apartment houses.
But watch carefully. There’s the potential a little further down the coast for some interesting development …