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Fact or myth: Does water view affect property price growth?

Fact or myth: Does water view affect property price growth?

by Bianca Dabu | June 17, 2019 | 1 minute read

Waterfront locations, particularly in capital cities such as Sydney, are often deemed as “prestige property markets”, but can scenic views and proximity to environmental amenities actually influence the growth of dwelling values?

June 17, 2019

While it usually takes more money to enter the waterfront property market, Propertyology’s Simon Pressley said that water views do not necessarily equate to better capital growth.

When choosing a property to invest in, the buyer’s agent reminded investors that it’s important to do away with any emotions – that is, any aesthetic preference or personal biases that are outside the scope of the fundamental growth drivers of real estate investments.

According to him: “What is a property? It’s a bit of dirt, with some brick, with some steel, with some timber, a roof over the top, and what’s inside of it is where we live and what we keep nice and warm and dry. We can’t stand at the front of the footpath with a hose and water it and watch the thing grow. It doesnt work that way –its not an organism.”

“What has the biggest influence on property prices is economic conditions, which leads to job creation, wage growth, confidence within a community, and all these fundamental growth drivers.

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There would have been a point in time, back during the first settler days, when we had this big empty land and it would have made sense to say, ‘Lets build the church on the hill or lets build a house on the river’, but were more than 200 years old now.”

At the end of the day, water views do not make property prices grow, Mr Pressley reiterated. If anything, scenic views and environmental amenities simply make property more expensive.

“If water made it grow, the Gold Coast or any coastal location would boom every year, but they don’t. Water views just make things expensive,” the buyer’s agent highlighted.

A new home with beautiful scenery and a higher price tag does not mean faster and more significant price growth, he said.

Conversely, an “ugly duckling” property could be the best asset in an investor’s portfolio.

Mr Pressley said: “If its going to make you feel good, do it, but if you want to make a smart investment decision… dont get engrossed in the aesthetics.”

“If youre looking at something on Domain on realestate.com, its just a picture. It means nothing. It might be an ugly picture and it might make you think, ‘I cant see the growth’, but it might actually be the best investment you could ever make. Conversely, it could look really nice and it could make you think, ‘I could see myself living there’, but it might turn out to be a lemon.”

“Invest with your eyes closed, metaphorically. Structurally sound and low maintenance – these are the non-negotiables. The cosmetic stuff like paint or floor coverings, you can deal with that when you have to and they don’t cost much, so dont allow them to influence your decision,” he concluded.

 

Tune in to Simon Pressley's episode on The Smart Property Investment Show to know more about the winning strategies in property investment today.

Fact or myth: Does water view affect property price growth?
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