A big, lush garden or a grassy median strip separating one side of the street from the other will inevitably add value to a property… right? Well, mostly, but new research shows the price impact depends on the suburb.
It’s all about the green! That was the declaration of an urban researcher I interviewed a few months back for a story I was writing about the impact of the natural environment on property prices.
In his view, easy access to open green spaces such as parks or even a pocket of trees can add tens of thousands of dollars to the value of a home. Even a view of a park that’s some way away can have a benefit.
Researchers say it’s all about amenity. Humans might be increasingly urbanised, with city slickers keen to live as much in the thick of it as possible, but we like pleasant scenery too. We desire to be near, walk amongst and look at tree-lined streets, bushy medians, a nice garden and a big sprawling park or even a ‘pocket green space’.
It made sense. However new research by Melbourne buyers’ advocacy Secret Agent indicates it’s not universal. The value of vegetation instead depends on what suburb you’re talking about.
Secret Agent researcher Jodie Walker says her team analysed 2,100 house sales over 2012 to see what impact green features had on the value of a property. They assumed, as would I, that median strips, front gardens and general neighbourhood vegetation would add money to the bottom line.
“Median strips, for example, make the road visually appealing,” Walker says. “We don’t really have control over whether they’re there or not but potential property buyers should consider how they affect house prices in the suburb of interest because it can make a huge difference.”
They can improve pedestrian safety, lift the outlook from homes and even reduce noise and congestion. In some areas, the presence of a median strip in front of a home can have a big impact on price. For example, Walker’s research shows a house in Clifton Hill can cost on average $695,000 more if exposed to a median strip.
No, that’s not a typo. But that whopping figure is almost dwarfed by the $1 million-plus extra you’re likely to fork out for a property in Parkville that has a grassy median in front of it.
“However in some suburbs, the absence of a median strip was more valuable than the presence. Again, at the extreme end of the spectrum, a house in East Melbourne without a median was about $750,000 more valuable than one with a median.”
In some suburbs, the difference in value on average between having a median and not was about $50,000. It depends on buyer tastes, the presence of other green facilities and “other contextual factors” that may make the addition of a median strip a pro or a con.
When it came to the benefit of a front garden, almost all homes would see a value increase regardless of where they are, Walker says. Take East Melbourne, where on average you can expect to pay up to $980,000 more for a home with a nice front garden.
“In inner city suburbs such as East Melbourne, having a house with a large setback from the street was considered a valuable aspect when these properties were originally built and that value has carried through to this day.”
According to Walker’s analysis, Cremorne and West Melbourne were the only suburbs in which having a front garden didn’t add any value to the property. In fact, having a garden in these areas is likely to result in a loss of around $20,000 at least.
Why? It seems when a suburb is highly industrialised and dominated by warehouse-style housing, an older home with a front garden won’t sell for nearly as much as a newly renovated, ultra modern property that’s built to the boundary.
The only universal finding from Secret Agent’s analysis was the benefit of street vegetation on a house’s sale price. Whether walking or driving, there’s something special about turning into a tree-lined street. As well as being easy on the eye, vegetation improves air quality, provides shade to buildings and, research shows, is likely to decrease criminal behaviour such as vandalism.
Walker’s research labelled local vegetation as non-existent, sparse or dense. Even houses surrounded by sparse vegetation yielded an extra $135,000 on average. Better still, those with an abundance of street vegetation enjoyed an extra $340,000 in value on average.
“The more trees in the street, the higher the sale price of the adjacent property. When categorised into pricing brackets, it was found that houses priced above $900,000 are more likely to have dense street vegetation, whereas houses between $400,000 and $700,000 have no or sparse vegetation.
Of course, the value of green can generally be significant. But what these results prove is that it’s important to consider what works for the individual property on a particular street in a single suburb, rather than rely on blanket rules.
Shannon Molloy is the deputy editor of Australian Property Investor magazine, www.apimagazne.com.au