Here we investigate the walkability and public transport options available in Greater Melbourne, and find out how these factors influence property pricing. This is part one of our Lifestyle Reporting, with part two covering our coffee habits and the part they play in the property market.
Imagine your life without cars, trains, trams and buses. How would you get to work, to the shops, or visit your friends?
Melbourne grew rapidly in the late 1800’s thanks to Victoria’s gold rush. The inner city grid is a relic from this era, where foot mobility and horse and cart were the norm. People built homes close to the city centre so that they could easily access work and amenities. With the mass production of the motor car post World War II, people ventured out to the suburbs to build their homes; freestanding, detached, and best of all, on a quarter acre block!
A trip to the city was relatively easy in the past with fewer cars on the roads, and more suburban jobs in manufacturing and farming.
Now with the ever increasing amounts of traffic on our roads, the constantly growing cafe culture, increasing concerns for the environment, increasing cost of car ownership, crowded public transport and the ageing population – walking is becoming the preferred form of transportation.
Part one of our Lifestyle Report examines walkability, proximity to public transport and the influence they have on house pricing in Melbourne. Part two will delve further into lifestyle, this time looking at Melbourne’s unique cafe culture and food scene.
WHAT IS ‘WALKABILITY’?
A walkable neighborhood generally has a centre such as a main street, with a mix of housing and businesses, schools, workplaces, and streets that are designed for use by pedestrians, cyclists and cars. The importance of this neighbourhood structure was highlighted in the recent submission to the Metropolitan Planning Strategy. (Victoria Walks, 2013) This paper promotes a polycentric model of Melbourne whereby walking is the preferred form of transportation to all important everyday destinations such as work, public transport, shops, schools and cafes.
Walking has proven health benefits and is one of the best forms of physical activity. A study in Adelaide found that people who rely solely on their car for transportation have more weight issues than those that use public transport or walk. (Sugiyama et al, 2013)
Furthermore, there are obvious economic and environmental benefits to walking, that are helping to keep it top of mind. It is also predicted that as the elderly population grows, so will the demand for walkability to services. (Myers and Gearin, 2001)
It is reasonable to expect properties in more walkable areas will attract higher sales prices. This correlation is seen in the U.S.A. This report aims to see how it translates to the Melbourne property market.
2,100 inner-city Melbourne property sales from 2012 were analyised alongside walkability data from walkscore.com. Walkscore measures the number of lifestyle destinations that are within walking distance of a house (Walkscore, 2013). Scores range from 0, indicating car dependency, to 100, the most walkable. Other international studies using the Walkscore measure have found a positive correlation between property value and walkability, as well as increased health and economic benefits for neighbourhoods with high walkability. In the U.S. a study found that within Washington D.C. alone, there is a walkability premium in the form of increased residential, office and retail rents, retail revenue and residential value (Becker et al, 2013).
WALKABILITY vs PRICE PER SQUARE METER
In order to isolate all other variables that may affect sale price (property type, land size, bedrooms, car spaces etc.), Walkability was measured against price per square metre. For a detailed description of this methodology refer to CEO’s for Cities (2009). Based on 2,100 sales in 2012 in inner city Melbourne, it was found that there is a correlation between a suburb’s walkability and price per square metre. On average, every 5 point increase in Walkscore value between 60 and 100 is worth approximately $298 per square metre for houses. Walk scores below 60 were not considered as these did not occur within the inner city.
Being able to get around easily and comfortably contributes to a great lifestyle suburb. For most people who live in the suburbs, walking to work is not an option. With parking limited in the CBD, driving may be impracticable. Many people from all over Melbourne rely on trains, trams and buses to get them into the CBD for work or shopping purposes. This map illustrates the density of public transport options in greater metropolitan Melbourne based on the location of 26,000 transport stops. To combine the densities of different transport options into a single figure, Secret Agent created a ‘transport score’ for each suburb. The transport score is derived from a weighted value based on the number of train stations, tram stops and bus stops in each suburb. Train stations had a value of 5, tram stops had a value of 1 and bus stops had a value of 0.0625.
The suburbs that performed the best according to transport score were of course those that had major train stations including Melbourne CBD, Camberwell, Richmond and South Yarra. These suburbs also boast a great combination of transport services (train, tram and bus) further helping to increase their ranking. Suburbs such as Essendon and Reservoir also performed well under this score due to the number of tram routes than run through these suburbs.
Proximity to the CBD does not necessarily mean that an area is well serviced by transport. Carlton for example was ranked 52, after Shepparton and Werribee. Although well serviced by trams and buses, the lack of a train station in Carlton and surrounding suburbs meant it did not rank as highly as expected. Being the most walkable suburb in Melbourne, this probably isn’t a big problem for people living in Carlton. They can just walk!
Accessibility around one’s home not only affects the individual, it affects their family, their friends and surrounding local businesses and thus plays an important part in the way people place value on property.
Overall, Walkscore cannot be used exclusively to value a property due to a number of other confounding variables (not accounted for in the methodology) influencing the property market. Some of these such as median strips, vegetation and front gardens were discussed in our July report. Other factors include the quality of the housing on offer, available schooling, crime rate and special property features such as views and elevation.
The results of this report can be used as another accessible method to gauge the potential value of a property. It gives a good indication of the positive value of living in an area with a mix of local walkable amenities.