9 July 2013 – Property investors are starting to get nervous about the risk of investing in waterfront and even river front property.
According to one of Australia’s most experienced property investment observers, Terry Ryder, buying too close to the water is no longer the dream run investment it might have been in the past.
Ryder says that increasingly around Australia, “water frontage is becoming a curse, rather than an asset.
“There will come a time, not too far distant, when water frontage will render property near worthless – in some locations, at least,” Ryder, founder of hotspotting.com.au says in online publication Property Observer.
“We have witnessed multiple instances of millionaire homes losing their front yards to seaside erosion – on the Gold Coast, at Byron Bay and elsewhere. It’s only a matter of time before homes topple into the surf.”
Asking who foots the bill for coastal erosion, Ryder says, “we are seeing rising numbers of local authorities banning development in at-risk coastal locations, including a significant stretch of Ninety Mile Beach in Victoria.
“Home owners fronting Lake Macquarie near Newcastle are currently digesting the suggestion they may have to demolish their homes, because water levels are rising in the tidal lake system.”
- See our article last year NSW coastal planning in storm of confusion
Along some coastlines, local councils pay to protect beaches and property, and the problem extends to riverfront property as well, Ryder points out. And along with increasingly frequent storms, “This is rendering some locations un-insurable.
“The insurance companies are refusing to cover some of the most at-risk places.”
At Port Fairy in Victoria, a study by the University of New South Wales found that 270 buildings were under threat of inundation at present, with the number expected to rise above 400 if sea levels rise 0.8 metres, as predicted.
“Most at risk is Port Fairy’s East Beach, where prestige homes are threatened by erosion and flooding – now, not at some vague point in the future.
“Property owners in these and many other areas face considerable loss of value. Increasingly, water frontage will be more a detriment than a bonus, and one of real estate’s most dominant paradigms will be turned on its head.”