Melbourne’s walkable neighbourhoods attract price premium: report
Homes in highly walkable neighbourhoods are more likely to hold their value than those in less pedestrian-friendly areas, a new report has found.
The effect holds during a rising market and also during the current slowdown, a paper from Melbourne buyers’ advocacy Secret Agent found.
Sought-after inner suburbs such as Carlton, Fitzroy, Collingwood and Brunswick were among the most walkable in Melbourne, even allowing residents to walk to the CBD, Secret Agent researcher and report author Jodie Walker said.
“Some [buyers] want to be close to work, they’re sick of driving on congested roads so they want to be able to walk to work,” Ms Walker told Domain.
“If they’ve got kids, maybe they want to be walking distance to their school.”
The report compared prices per square metre for select Melbourne suburbs, dividing locations into walkable and less walkable regions.
On average, price growth increased by 0.9 per cent in walkable zones compared to less walkable zones, over the 12 months to February this year, the paper found.
It follows an earlier study by the agency that found a significant price premium for homes in walkable neighbourhoods during a rising market.
Vendors could expect to gain an extra $298 per square metre for their home for every five point increase in its Walk Score, the 2013 study found.
The group plans to repeat the study in future to better assess the effect of walkability in a falling market.
“We can hypothesise that walkability will likely have a protective effect on property value, in a similar way to what has been seen in America,” Ms Walker wrote.
A recent study in Dallas found homes in walkable neighbourhoods held their value by about 2 per cent more than less walkable counterparts during the GFC, while another in Los Angeles found the price premium for walkable homes increased as the economy recovered from the crisis.
Jellis Craig Fitzroy director Rob Elsom sees buyers willing to pay a premium to live in amenity-rich, city-fringe neighbourhoods.
“Generally speaking any suburb that’s close to the CBD does hold its value quite well,” Mr Elsom said.
“The closer you are into the CBD, the less boxes a property has to tick for a buyer to purchase them. When you’re further out of Melbourne CBD, people are a lot more discerning on what they want.”
Buyers were often willing to forgo a second car space or a large block so they could live in a “destination suburb” such as Fitzroy or Collingwood, where they could walk to work in the CBD and to local restaurants and cafes on the weekend, he said.
Woodards Carlton North partner Glenn Bartlett said inner-city buyers were looking to be close to cafes, transport, parkland and schools, and were willing to make compromises such as having smaller backyards.
“A lot of people will buy as close to the CBD as they can possibly afford if their broad criteria are met,” Mr Bartlett said.
“We hear from a lot of buyers that they’d much prefer to extend themselves and buy something closer to their places of work, rather than have to battle an extended commute time.”
An earlier study conducted for Domain named Fitzroy and Carlton as among the most walkable suburbs, and found the 16 most walkable suburbs were all within eight kilometres of the CBD.
The middle and outer suburbs are more varied in terms of walkability, said Lukar Thornton, senior lecturer at the Institute for Physical Activity and Nutrition at Deakin University.
Outer suburbs might start as a small area with a central shopping centre and school, then grow outwards, he said.
“If you’re there early, you might be near the resources that are there,” Dr Thornton said.
“If you’re coming to the town later, on that sprawl away from these town centres, it means you’re very disconnected from anything that would be considered accessible by foot.”
Even so, living in a walkable neighbourhood didn’t stop some residents from driving everywhere.
“The environment of the neighbourhood provides the opportunity. But it’s then up to the individual to take advantage [of it],” he said.