Investment Strategy

Nationwide, waterfront properties are generally worth over 60% more than inland properties, according to some estimates. And as you might expect, this premium tends to be the highest within our capital cities. For instance, waterfront properties in Sydney are, on average, worth almost double the value of inland properties – the highest waterfront premium in the world. But it isn’t just the inner cities that continue to produce a major waterfrontage premium. Tourist hubs like Byron Bay, the Mornington Peninsula, the Sunshine Coast, the Gold Coast or the Central Coast are all coastal hotspots for attractive lifestyle properties. In areas like these, even inland properties can feel the knock-on effects of high waterfront demand.

If you're among those seeking relief from the burden of high home loan rates, there might be a glimmer of hope on the horizon. By now, we’ve all heard that inflation has been coming down. As it stands, a return to target inflation isn’t far away, but perhaps a more pressing concern for the RBA is unemployment and productivity.

Recently, real estate firm CBRE released the results of their residential valuer survey for Q1 of 2024. The results of this survey offer some valuable insights into the observations of ~190 CBRE valuers around the country. In today’s article, we’re taking a look at some of the key results, and offering some brief commentary of our own: According to CBRE’s report, 6x as many valuers are expecting ‘strong to very strong’ demand, Australia wide, as opposed to ‘soft or very limited’ demand. Valuers note also that demand has been the most significant in a few key markets, namely – Perth, Adelaide and Brisbane.

Informational asymmetry, where one party in a transaction possesses more or superior information than the other, is a concept well-documented in economic theory. It can be a big problem, and its effect is felt uniquely within the real estate market – far more than in other asset classes like stocks, commodities or cryptocurrencies. Compared to many of these alternative investments, traded in vast quantities across highly regulated and transparent markets, with no informational lag, real estate is inherently unique.