Record-low interest rates and government incentives are enticing increasing numbers of Australians to return to the property market.
In August, new home loans experienced their largest monthly increase since records began in 2002.
And CoreLogic data shows the number of properties taken to auction last week was up 12.3 per cent on the same time last year.
Consequently, The New Daily has compiled a guide on some of the external factors that affect the value of our homes – to make sure buyers and sellers get the right price for their property.
1. Everyone wants a ‘20-minute neighbourhood’
The pandemic has forced millions of Australians to work from home and spend more time in their local neighbourhood.
So it’s perhaps unsurprising the value of that neighbourhood now has an even greater impact on the value of our homes.
Neighbourlytics co-founder Lucinda Hartley said buyers used to seek out homes that offered most amenities within a 30-minute drive.
But many buyers are now paying a premium for properties that offer their required amenities within a 20-minute walk.
Ms Hartley said the process got underway early in the pandemic, with activity in Sydney’s CBD down 90 per cent between February and April, compared to a sixfold increase in inner-city suburb Surry Hills.
“The focus we’re seeing in our behavioural and lifestyle data now is that the focus really is on living hyperlocally,” Ms Hartley said.
“So that means having basic services like schools and libraries, parks and ovals and opportunities to support mental health – so chances to connect socially at bars and cafes or even volunteering – within close range, and that’s motivating buyers to spend a premium.”
2. Fun in the sun
Outdoor spaces were a hot commodity over the winter months, with Victorians at one stage only allowed outside for an hour a day for exercise.
This even resulted in residents claiming a public golf course for recreational use in the Melbourne suburb of Northcote.
Suburbanite principal Anna Porter said the experience had triggered a new buying trend.
Ms Porter told The New Daily homes on tree-lined streets or with easy access to nature reserves were selling faster – and for more money – than suburbs with few green spaces.
“People are moving that extra 20 minutes away than they might have [previously] considered to get more lifestyle options, because they’re not going to work in the city as frequently as previously,” Ms Porter said.
“The amount of housing stock in some of these beachside and bushside suburbs has declined and they are selling quite quickly, and they’re getting that buyer attention more than in the past.”
3. A room with a view
Undulating streets in our capital cities can be a common sight.
And the price difference between comparable homes on a hilly street can be immense, according to Belle Property Albert Park director David Wood.
Mr Wood told The New Daily the difference between the price of a home with uninterrupted views of a city skyline and one at the bottom of the same street could be as much as 10 to 20 per cent.
And a home’s orientation can play a major role, too.
“If a home’s orientation to the rear is north on one side of the street and one is south, you could see a significant price difference,” Mr Wood said.
“That’s because in the winter months – in Melbourne especially – you get the lovely northern sun that would come into the rear of a home if it faces north, whereas those facing south can be cold and bleak.”
4. Electrical towers (and other unsightly sights)
Mr Wood said buyers could snap up a bargain if they were happy to put up with an “eyesore”.
He cited the recent furore among residents during the construction of the Victorian government’s Skyrail project, which saw elevated train lines built through portions of Melbourne’s south-east and north.
“When they purchased their home, they knew the train line was there but at street level, and now they have this monstrosity that’s rearing above them, which has affected the value of their property,” Mr Wood said.
Ms Porter also noted the “significant stigma” attached to electricity infrastructure over supposed health risks such as cancer – claims the Cancer Council has debunked.
She’s seen cases where homes in direct proximity to power lines were valued 30 per cent lower than the average price of that suburb.
“But it can impact the liveability of the house if you’re closer to the power lines, as you get a constant background buzzing sound, so people should pay a price according to those detriments,” Ms Porter said.
5. It’s all about good character
One of the more intangible facets of home prices is a suburb’s character.
Ms Hartley from Neighbourlytics said suburbs with a distinctive personality – which tend to be inner suburbs that have a strong history, a robust creative arts scene, or a rich sense of multiculturalism – tend to fetch higher prices.
“Character is always driven by people, and it’s built over time,” she said.
“So usually we may see outer or newer suburbs having multiple identities to start with, but as they get more established, they get known for particular things and may attract buyers who are into those things, which in itself then helps to form a suburb’s singular identity.
“And a lot of that can play out online.”
6. What’s in a name?
It may sound odd, but street names can also sway prices.
A recent study on Sydney’s housing market found longer names offered a 0.6 per cent price premium, while unique names encouraged buyers to pay 1.6 per cent – or $10,835 – more than the city’s average.
But Mr Wood was sceptical.
He believes a street name would have few real-world ramifications, bar one or two exceptions.
“I don’t know if there is a Corona Street, but I would argue names of that nature may now be less desirable among buyers.”