- Location, location, location remains the most important
- Nearby amenities such a parks and shops not as important as you think, data suggests
- Being near water helps
What makes a suburb desirable?
Is it the cost alone? Easy access to major roads? Good public transport? Local restaurants? Dog parks?
Well, in Australia, it remains the old fashioned mantra of “location, location, location” according to PropertyPricer’s CEO and founder Ross McLelland.
According to data from PropertyPricer, an Australian property valuation site that mathematically analyses over 1,000 different features to predict house prices, a property’s distance to various hospitality venues and shopping has little to no impact on property prices.
Additionally, data shows that while proximity close to local amenities, such as public transport or schools often influence peoples decision to buy or reject a property, this rarely affects the selling price. The only notable exception is proximity to a train station.
“In fact, access to amenities only adds around 5% to the value of a property,” said Mr McLelland.
“For example, a $1m property may be worth an additional $50,000 maximum if it is close to shops, schools, and cafes.
“Most people will buy the house they want, even if it is further away from facilities, with price and liking the home itself being the most important factors in their decision-making process.”
So, if proximity to places such as restaurants and shops aren’t driving where Australians want to buy, what is?
Closeness to the water is one factor
PropertyPricer’s analysis shows properties such as $1.5 million house in outer Sydney would be worth as much as $5.4 million if the house was “cut and paste” to a harbourside or beachside location.
Of course, many homebuyers, especially first-home, are priced out of such markets.
However, such buyers, including price-savvy investors, are taking advantage of remote working by venturing to beachside suburbs further away from the main cities.
“No longer confined by the distance of a daily commute, professionals and investors are able to cast their nets even wider,” explained Mr McCelland.
“For those looking to relocate to less popular cities and states, there are still some bargains to be found.
“So if you’re a buyer in the current market, remember the selling price of a property doesn’t always reflect its true value, especially in our current artificially inflated market.
“There are many desirable suburbs but ultimately price will always dictate what people can afford and in the current market areas that were previously seen as unavailable are now becoming options for first-home buyers who have been priced out of everywhere else.”
This article first appeared in The Property Tribune 17th January 2022.