Homebuyers are willing to pay more for a home located near a local shopping village, according to a new survey, revealing the role small businesses play in driving Australia’s median house price upward.
According to the Economy of Shopping Small
report, commission by American Express, almost half (47%) of Australians in the market for a new home are willing to pay a premium to purchase a property located near a local village or cluster of small businesses.
In fact, homebuyers are willing to pay, on average, an additional 4.4% or $30,486 for a home located near a local shopping village. According to the report, this delivers an average increase of $164 to the median house price, holding other factors constant.
Byron Rose, CEO of Sydney buyers agency Rose and Jones said many people overlook the relationship between local businesses and house prices.
“Many factors contribute to the price of the average home, but probably unknown to many, is exactly the extent small businesses play in boosting property prices,” he said.
“Despite auction clearance rates slowing and interest rates at record lows, if you compared house prices from a community with the average number of small businesses (375) with one which had twice this amount, the estimated median house price in the latter would be 10% higher.”
Further findings from the Economy of Shopping Small
report reveal that almost two thirds (62%) of Australians agree small businesses improve the aesthetics of the surrounding area and 60% say they boost the standard of living.