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Easing Swell Forecast On Waterfront Property Wave

Fuseworks Media
Fuseworks Media

30 OCTOBER 2008 - Absolute coastal waterfront property has reached its 'high-tide' value limit for the meantime but is showing few signs of retreating as fast as general residential real estate values, according to the latest property research.

Statistical data from leading real estate agency Bayleys reveals that the unique nature of absolute waterfront property has insulated the sector against the downturn in values currently evident across the general residential market.

"While the results of the latest survey show that the strong levels of capital growth experienced (by absolute waterfront property) over recent years has stalled - unsurprising given current economic condition - there is little evidence of a marked depreciation in values over the last 12 months," says the research report.

"Sales evidence in many locations has been short over recent months as owners choose to 'ride out' the current slow down in the market."

"Market feedback from across the country has a number of consistent themes. Firstly, the appeal of absolute waterfront property remains intact - although both vendors and purchasers are taking a more cautious approach to the market. This is unsurprising given the current state of the economy.

"Secondly, while the absolute waterfront market is generally seeing values holding, in many areas there is a marked oversupply of coastal subdivisions. This has resulted in a significant reduction in values combined with a marked slowdown in market activity."

Bayleys Research defines coastal subdivisions as sections which do not directly adjoin a beach, which overlook the sea from hills, or separated from the beach by roading access. The company also defines lakeside property as absolute waterfront.

"The differentiation between absolute waterfront property and the wider coastal market is becoming greater as the general residential market cools," says Bayleys Research.

"While absolute waterfront sections within coastal subdivisions continue to attract purchasers, it is increasingly clear that vendors are having to price their product realistically - as purchasers are unwilling to pay a premium for property set back from the water."

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