What affects real estate values and property values in the eyes of a home purchaser
By Terry Ryder for API Magazine January 2007. The second part of this two part article.
Matusik has investigated house values several times in the past five years to determine the importance of being next to public transport nodes. The evidence suggests home buyers are paying 10 per cent more to be within 500 metres of railway stations and 19 per cent more to be near major busway stations.
Over the past five years, real estate values near a railway station have increased 12.6 per cent a year – compared to the Brisbane average of 10.3 per cent.
“Higher prices are being paid to live near the major busway stations of Woolloongabba, Greenslopes, and Holland Park. Five years ago houses close to these stations weren’t much more than the Brisbane average but the median house price near these transport hubs this year was 19 per cent higher than the Brisbane average,” Matusik says.
Real estate values for these properties rose almost 12 per cent in the 2006 financial year, compared to the Brisbane average rise of 3.5 per cent. Bright says Sydney homes need access to some mode of public transport to be desireable – either train, bus or ferry.
“The more the merrier – it’s mandatory to have at least one ofthose modes of transport available, preferably two,” Bright says. “If you don’t have train or bus or ferry, you’re making it hard.”
Brisbane house values within 500 metres of noted lifestyle precincts – suburban high street or café strips – have risen 13.5 per cent a year over the past five years, compared with the Brisbane average of 10.3 per cent.
The median house price in these precincts is $584,000 – compared with the Brisbane average of $354,000. House values and real estate properties rose 9.2 per cent in these precincts in the 2006 financial year, while prices rose only 2.5 per cent across Brisbane.
“Home buyers in these higher-priced inner-city locations were paying 61 per cent more than the average in 2002,” Matusik says. “This premium has lifted to 81 per cent when compared to today’s median price. When comparing the results against the inner-city median house price, we find that the premium paid to live near a high street was 10 per cent in 2002 and 16 per cent today.”
The research showed there was a premium paid to live close to major shopping centres as well. This wasn’t the case in 2002 but today Brisbane, Gold Coast and Sunshine Coast real estate home buyers will pay 18 per cent above the area’s average to be close to regional shopping centres.
There was a similar result for homes close to major public open spaces. There was no premium in 2002 but now home buyers pay a premium of 18 per cent. “Annual price growth has been similarly impressive, with the results being 15.1 per cent a year over the past five years,” Matusik says.
Bright says lifestyle precincts are becoming more and more important in Sydney, because Generation X and Y want it and baby boomers are moving towards them as they edge closer to retirement.
Home and apartment buyers are finding themselves victims of noise rage. Archicentre, the building advisory service of the Royal Australian Institute of Architects, says pre-purchase inspections of real estate show this is a growing issue.
“Often it’s only when people move in that they find their new home is subject to noise which can lead to stress, poor relationships with neighbours and in some cases physical confrontations,” says Ron Tanton of Archicentre.
Noise problems arise from poor real estate building practices with inappropriate acoustic separation between apartments, the tendency for people to invest thousands in home entertainment systems, noise-producing polished floors in units and balconies built like clusters on high-rise condo buildings.
“Noise is an issue everyone needs to assess before signing on the dotted line for a real estate property,” Tanton says. He suggest home buyers speak to neighbours and see how they feel about living in the apartments – as they’ll soon tell you if they’re suffering sound rage.
Bright says he visits residents living in apartments above the one he’s examining for a client and asks them to walk about so he can assess noise transfer. It’s important for home buyers to check whether the walls have noise-dampening insulation and concrete floors which lessen noise transfer. Kelaher says noisy apartments will sell for 20 to 25 per cent less than quiet ones.
Water-wise features will attract a premium and may, in the future, be a major contributor to achieving a sale. As the drought and global warming become top-of-mind for many Australians, this factor will gain increasing importance in the real estate market.
A recent website poll by Matusik Property Insights examined whether rain tanks added value to a home. Two-thirds of respondents thought they did. Of the ‘yes’ voters, 30 per cent thought they added between 2 and 5 per cent to the property’s overall value, while 20 per cent thought a rainwater tank would add 5 per cent of more. Matusik notes, however, that a 2 per cent premium would add $6500 to the average Brisbane home – twice the current cost to install a typical water tank. As the consequence of drought and water restrictions become more apparent, the value of having a water tank in a real estate property grows. Archicentre says one of the outcomes of water shortages will be more cracks appearing in Australian homes and real estate. It predicts cracking in homes will rise 10 per cent.
Archicentre’s latest survey of 75,000 homes across Australia found South Australia suffered the worst cracking problems in the country, with almost half of homes affected. The next highest was Tasmania, with 45 per cent of real estate affected.
Archicentre’s manager in SA, Jim Jovanovic, says that as water restrictions are implemented throughout Australia, the moisture in the ground is ‘changing quite dramatically.’
“When the soils dry out, strain is put on the real estate property structure and cracks can appear overnight,” Jovanovic says, “In many cases, cracks up to 10 millimetres in brickwork could close up once the soil regained moisture content. More serious cracking might need some form of structural repair.”
Terry Ryder is author of four books and creator of hotspotting.com.au.
For more information about Australia pre-construction condominium residences.
Public Transport Nodes and Real Estate Values
Matusik has investigated house values several times in the past five years to determine the importance of being next to public transport nodes. The evidence suggests home buyers are paying 10 per cent more to be within 500 metres of railway stations and 19 per cent more to be near major busway stations.
Over the past five years, real estate values near a railway station have increased 12.6 per cent a year – compared to the Brisbane average of 10.3 per cent.
“Higher prices are being paid to live near the major busway stations of Woolloongabba, Greenslopes, and Holland Park. Five years ago houses close to these stations weren’t much more than the Brisbane average but the median house price near these transport hubs this year was 19 per cent higher than the Brisbane average,” Matusik says.
Real estate values for these properties rose almost 12 per cent in the 2006 financial year, compared to the Brisbane average rise of 3.5 per cent. Bright says Sydney homes need access to some mode of public transport to be desireable – either train, bus or ferry.
“The more the merrier – it’s mandatory to have at least one ofthose modes of transport available, preferably two,” Bright says. “If you don’t have train or bus or ferry, you’re making it hard.”
Lifestyle Precincts, shops, parks are important for real estate buyers
Brisbane house values within 500 metres of noted lifestyle precincts – suburban high street or café strips – have risen 13.5 per cent a year over the past five years, compared with the Brisbane average of 10.3 per cent.
The median house price in these precincts is $584,000 – compared with the Brisbane average of $354,000. House values and real estate properties rose 9.2 per cent in these precincts in the 2006 financial year, while prices rose only 2.5 per cent across Brisbane.
“Home buyers in these higher-priced inner-city locations were paying 61 per cent more than the average in 2002,” Matusik says. “This premium has lifted to 81 per cent when compared to today’s median price. When comparing the results against the inner-city median house price, we find that the premium paid to live near a high street was 10 per cent in 2002 and 16 per cent today.”
The research showed there was a premium paid to live close to major shopping centres as well. This wasn’t the case in 2002 but today Brisbane, Gold Coast and Sunshine Coast real estate home buyers will pay 18 per cent above the area’s average to be close to regional shopping centres.
There was a similar result for homes close to major public open spaces. There was no premium in 2002 but now home buyers pay a premium of 18 per cent. “Annual price growth has been similarly impressive, with the results being 15.1 per cent a year over the past five years,” Matusik says.
Bright says lifestyle precincts are becoming more and more important in Sydney, because Generation X and Y want it and baby boomers are moving towards them as they edge closer to retirement.
Noise a No-No and will decrease property real estate values significantly
Home and apartment buyers are finding themselves victims of noise rage. Archicentre, the building advisory service of the Royal Australian Institute of Architects, says pre-purchase inspections of real estate show this is a growing issue.
“Often it’s only when people move in that they find their new home is subject to noise which can lead to stress, poor relationships with neighbours and in some cases physical confrontations,” says Ron Tanton of Archicentre.
Noise problems arise from poor real estate building practices with inappropriate acoustic separation between apartments, the tendency for people to invest thousands in home entertainment systems, noise-producing polished floors in units and balconies built like clusters on high-rise condo buildings.
“Noise is an issue everyone needs to assess before signing on the dotted line for a real estate property,” Tanton says. He suggest home buyers speak to neighbours and see how they feel about living in the apartments – as they’ll soon tell you if they’re suffering sound rage.
Bright says he visits residents living in apartments above the one he’s examining for a client and asks them to walk about so he can assess noise transfer. It’s important for home buyers to check whether the walls have noise-dampening insulation and concrete floors which lessen noise transfer. Kelaher says noisy apartments will sell for 20 to 25 per cent less than quiet ones.
Water tanks worth watching ... most so in Australia
Water-wise features will attract a premium and may, in the future, be a major contributor to achieving a sale. As the drought and global warming become top-of-mind for many Australians, this factor will gain increasing importance in the real estate market.
A recent website poll by Matusik Property Insights examined whether rain tanks added value to a home. Two-thirds of respondents thought they did. Of the ‘yes’ voters, 30 per cent thought they added between 2 and 5 per cent to the property’s overall value, while 20 per cent thought a rainwater tank would add 5 per cent of more. Matusik notes, however, that a 2 per cent premium would add $6500 to the average Brisbane home – twice the current cost to install a typical water tank. As the consequence of drought and water restrictions become more apparent, the value of having a water tank in a real estate property grows. Archicentre says one of the outcomes of water shortages will be more cracks appearing in Australian homes and real estate. It predicts cracking in homes will rise 10 per cent.
Archicentre’s latest survey of 75,000 homes across Australia found South Australia suffered the worst cracking problems in the country, with almost half of homes affected. The next highest was Tasmania, with 45 per cent of real estate affected.
Archicentre’s manager in SA, Jim Jovanovic, says that as water restrictions are implemented throughout Australia, the moisture in the ground is ‘changing quite dramatically.’
“When the soils dry out, strain is put on the real estate property structure and cracks can appear overnight,” Jovanovic says, “In many cases, cracks up to 10 millimetres in brickwork could close up once the soil regained moisture content. More serious cracking might need some form of structural repair.”
Terry Ryder is author of four books and creator of hotspotting.com.au.
For more information about Australia pre-construction condominium residences.
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