The Water Factor
A Spot by a Shoreline Adds, on Average, 63% to the Cost of a Luxury Home
Sanette Tanaka | Wall Street Journal | August 1, 2013 | link
Water is plentiful, but it will cost you.
Luxury vacation homes built on the water cost 63% more, on average, than similar properties that are landlocked, according to an analysis by global property consultancy Knight Frank.
To find out where preferences for water run the deepest, London-based Knight Frank looked at 10 popular second-home destinations around the world, drawing from estimates of agents in local markets.
Waterfront properties on Italy’s Lake Como, about 30 miles north of Milan, and in Barbados have the highest price premium, followed by Phuket in Thailand and central Algarve along Portugal’s southern coast.
Waterfront properties are in high demand because they are exclusive and private. “It’s the cachet of being on the water. No one is in front of you, you’re not looking over anyone’s shoulder—that does command a premium,” says Edward de Mallet Morgan, an associate with Knight Frank who worked on the report.
At Lake Como, true waterfront homes are hard to come by. A road wraps around the perimeter of the Y-shape lake, blocking many of the properties’ direct access to the water. Only about 10% of waterfront villas have both direct access and views, says Rupert Fawcett, head of the Italian desk and a real-estate agent at Knight Frank. These properties start at roughly €4 million, or $5.3 million, and can sell for more than €60 million, or $79.6 million.
“It’s the first question I ask people, ‘Do you want waterfront or lake views?’ Generally speaking, if you can’t see the water, people are not interested,” Mr. Fawcett says. “I’ve had people who have been looking for three, four, five years, but they’re all happy to bide their time. These people appreciate that it’s a rare commodity to get a true waterfront property.”