Golf Communities Tee-Off in Australia's Latest Property Trend

What do Australians do upon retirement? They play golf.

A host of new residential “golf communities” are under construction In Australia, with famous golfing names such as Greg Norman, Karrie Webb and Adam Scott assisting to design courses for the estates, so retirees can just walk out their front gate for an international standard golf game.

And new research is showing that passionate golfers are spending on average an extra 200 per cent in some areas of Australia to have a view of the green!

A nation of golfers

The most recent government study into Australians’ participation in sport and physical recreation, conducted by the Australian Bureau of Statistics found that there were 875,500, or 6%, of Australians who participated in golf in the 12 months prior to the survey, two thirds of whom play more than once a week.

New South Wales and Victoria recorded the highest number of golfers. Those aged 55-64 years had the highest participation rate, running at nearly 10%, and with a rapidly ageing population, the demand for golf courses is sure to increase.

Growing demand for property in ‘lifestyle’ estates

Golfing estates are a new phenomenon in Australia, which has lagged behind the US and Japan in the trend of golf-themed residential property. But local developers are now more than making up for it.

Australian property researcher Michael Matusik conducted an analysis that showed that golfers in Queensland are spending an extra 92% on land on or close to fairways, while property in “branded” projects backed by alliances with international golfers, can prove even more sought after.

And they appear to be holding their value!

Matusik told the Australian Financial Review that owners of property close to the fairways in Queensland are seeing an annual growth in land value of 13.4%, compared to properties further away from the course growing in value by just 7.6%.

A 2006 report conducted by Ernst and Young and commissioned by the Australian PGA found that between 2000 and 2006, 33 new courses have opened across Australia, two-thirds of these as part of residential and/or resort property developments. Properties on estates with golfing facilities tend to sell for an average 25% more than property without this luxury, and property in developments with a course designed by golfing royalty can attract a premium of up to 200%.

The report found that since 1999, 24,300 golf-related residential blocks have been built, or are in the process of being built, as part of existing residential master plans to satisfy the growing interest in golf-themed living. This makes up about 3% of new property construction in Australia.

The buzz around the 19^th hole

The golfing world is full of endorsements, but endorsements are not all that it’s about. Many of the new golfing estates have internationally successful Australian golfers heading up the course design teams to bring the latest trends and technologies from the pro-circuit.

World Golf Hall of Fame member Greg Norman, who had 91 career victories, including 20 on the PGA tour, has a joint venture with Macquarie Group to develop golf-themed residential estates. Under the Medallist brand, a range of projects are under construction in the US, South Africa and Australia.

Norman’s current projects include Settlers Run, located just outside Melbourne, which was opened late last year, with land still available under a gradual release program. Sydney will get its first Greg Norman golf course with the opening of Stonecutter’s Ridge, an 820 lot master-planned development which began construction late last year.

LinksLiving, which is in a joint venture with professional golfing body the PGA, is one of the premier golf property developers in Australia. Currently, a massive purpose built estate 40 minutes south of Melbourne, the Sandhurst Club is under construction and will host almost 2000 residential homes, priced from $149,000 to $580,000. One quarter of these properties have been sold to date.

The development features 36 holes of golf, designed by golfing champion Peter Thomson and Ross Perrett, and includes a proposed 200 bed hotel and serviced apartment complex.

LinksLiving has also proposed developments in the Whitsundays, off the Queensland coastline, and others in NSW and Victoria.

Former world number one female golfer Karrie Webb has headed up the design team for Laguna Investment’s Jagabara course in Queensland, to make up part of an already developed estate containing another course.

Nearby, Adam Scott, the 27-year-old Australian golfer who made it to number three on the PGA money list in 2006, has designed the course for the Whitsunday Shores property development, near Bowen.

With so much to choose from, investors should primarily weigh up the position of their property in relation to the course, and convenience of access, but also keep in mind that a celebrity-designed course is going to yield better returns in the long run.