Canal-front supply running dry

Nothing tops beachfront property, right? Wrong. Research published in May’s Australian Property Investor (API) magazine reveals that in some areas, canal frontage comes up trumps. API also discovered that the days of creating new canal estates are numbered, with coastal protection laws making it harder, and in some cases impossible, to build new water-based estates. Editor Eynas Brodie says that can mean only one thing – greater demand for existing canal-front homes.

“Apart from the few canal estates already on the drawing board, it doesn’t seem likely there’ll be many more in Australia,” Mrs Brodie said. “Not only is it hard to find the right physical landscape to build them, but community opposition is often fierce and governments are increasingly loathe to approve new canal schemes.

“Canal-front land already commands one of the biggest premiums in the Australian property market. Given that the opportunity to create further canal developments is drying up, the combination of water and scarcity will lead to greater demand and therefore, price growth.”

Well-known valuer Iain Herriot told API that canal residential properties in some parts of the Gold Coast outperformed even absolute beachfront property. For example, he said, someone who invested 10 years ago in a prime section of Runaway Bay would have achieved a higher rate of capital growth than someone who bought in Hedges Avenue at Mermaid Beach, which is considered the Gold Coast’s best oceanfront address and one of Australia’s most prestigious streets.

Michael Matusik of Matusik Property Insights said his analysis of waterfront property versus “dry” property confirmed the wealth-making qualities of water.

“Our research has shown that waterfront property has grown twice as fast as non-waterfront stock, as well as being more resistant to downturns in the residential property cycle,” he said.

API’s in-depth study in its May issue examines the canal-front situation nationwide, with a look at how existing canal-front estates have performed and where future water-based residential developments are being planned.