Auckland’s waterfront properties command a price premium of 76%, new research shows.
Auckland ranked second in the latest Knight Frank International Waterfront Index, which compares the prices of waterfront homes with equivalent properties set back from the water.
Waterfront properties in the harbour city cost almost twice the price of their inland counterparts, but the Knight Frank research found that premiums can vary depending on location.
Auckland’s premium was ahead of the Gold Coast’s (71%) and Perth’s (69%), but behind the 121% commanded by waterfront properties in Sydney. The Cap d’Antibes peninsula (59%) in the South of France was the highest European entry in the list of 17 international locations.
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The Knight Frank research found that in the 12 months to the end of June 2022, the average price increase for a waterfront property in the index was 10.9%.
Michelle Ciesielski, head of residential research at Knight Frank Australia, said that Covid lockdowns “had put greenery and space at the top of buyers’ requirements for homes, fuelling sales and price growth in prime regional markets. Low supply has also kept upwards pressure on prices.”
The average international premium for a waterfront property compared with a non-waterfront home was 40% in the second quarter of the year.
Knight Frank said beachfront property was the most sought-after location, attracting an average premium of 63%. “This narrowly pipped a harbour location (62%), with coastal, where waterfront buyers pay an average premium of 40%, third.”
Knight Frank’s partner in New Zealand, Bayleys Real Estate, said that the research uncovered surprising price differences in areas of Auckland that buyers typically overlook.
The view across Auckland’s Manukau Harbour. Photo / Fiona Goodall
Barfoot & Thompson agent Paul Neshausen: “Some of our rich-listers want helicopter access.” Photo / Fiona Goodall
Bayleys head of insights and data Chris Farhi said: “Quite often when people think waterfront, they think of these real trophy homes, in places like Herne Bay. They’re the ones you tend to see reported in the media. Yet the bulk of the waterfront sales around Auckland are actually in other locations, where they're backing on to, say, a river area.”
Auckland has two harbours and numerous inlets, creeks, streams and rivers, including Tamaki River, Whau River, Te Wai-o-Pareira [Henderson Creek] and Papakura Stream. For the study, Farhi examined prices in high-value waterfront suburbs such as Herne Bay, St Heliers and Cheltenham and in lesser-known waterfront suburbs such as Papakura, Otahuhu, and Takanini.
The average price for non-waterfront properties on the North Shore was $1.53 million while the average price for waterfront real estate on the Shore was $2.63m (a premium of 71%).
In the sample of sales straddling the Takanini/Papakura/Franklin border, the average price for non-waterfront properties was $1.04m while the average price for waterfront was $1.37m (a premium of 31%).
Farhi put the larger price premiums for waterfront real estate in the Australasian housing markets down to cultural preference. “There's a cultural affiliation across Oceania, for people wanting to be close to [the coast] and the beach and sea views,” he said.
A property on Tamaki Drive, in St Heliers, that recently sold for more than $4m. Photo / Supplied
Barfoot & Thompson agent Paul Neshausen, who sells luxury homes in St Heliers and Glendowie, said many of his clients wanted the privacy that the area’s many cliff-top properties afforded. “Some of our rich-listers want helicopter access,” he said.
Neshausen felt that Auckland’s premium waterfront properties were under-priced by international standards. “I sold a property on Tamaki Drive a couple of weeks ago in the $4ms. It had absolute world-class views. If that had been in Sydney, there would have been a 50% premium on that price.”
Ray White agent Ross Hawkins told OneRoof that proposed changes to Auckland’s planning rules would boost demand for waterfront property in the city. “There's a lot of people who are living in beautiful, valuable homes [with] fantastic harbour and water views. But they are at risk of losing these views. That means waterfront properties will become even more valuable because their [views] can't be blocked.”
Graham Wall, of Wall Real Estate, said that there were fewer premium waterfront properties in Auckland than in Sydney, something he always points out when people complain about Auckland prices. “It’s a wild guess, but there are probably 500 homes here with a premium view, and 1000 in Sydney.”
Surprisingly, the Knight Frank research found there were “waterfront” homes in Auckland that sell for less than the average price – those that are beside mangroves and muddy streams.
Many, such as those on Matahanga Drive, in Wattle Downs , and on Reid Road, in New Lynn, are technically waterfront, but have price estimates well below Auckland’s average sale price.
Farhi said: “This would typically be where maybe the garden just goes off the back and goes down to a stream. As a result the outlook in that direction is not the main focus for the home. It's almost just like a continuation to the backyard, which just happens to go down to that waterfront area.”
