For Earth Day 2021, CoreLogic has conducted a new study into Sydney’s housing market and greenspace, finding a ‘positive but weak’ relationship between greenspace and housing prices.
The study reviews overseas literature on the known value greenspace provides to improve mental and physical health and wellbeing. It then investigates if these positive physiological effects translate to a price premium for residential property in proximity to public, or with the presence of private, greenspace in Sydney as it does in certain overseas markets.
CoreLogic Research Director, Tim Lawless, says “Previous research, much of it international, has highlighted the health benefits of living close to greenspace, be it private or public, as well as the housing value premium associated with having access to greenspace. There is also the all-important environmental benefits greenspace provides to our communities, country and climate.
“Our case study revealed a positive correlation between housing values and greenspace, however the correlation across the broad Sydney region was not strong, implying a lot of other factors are involved in determining the value of a residential property.”
The connection between Australians and property is unique, and little research exists today into how greenspace impacts property values locally. Attributing a value to greenspace proximity implies that the market as well as individual home buyers value and appreciate the presence of green areas in the urban environment. Further, the study suggests the low correlation between greenspace and housing prices may be due to Sydney’s larger volume of greenspace than many European cities cited in the international research. For example, Sydney has 46% public greenspace whilst Amsterdam has 13% and London 33%., indicating residents and authorities may place more value on greenspace where it’s less accessible.
Mr Lawless says “Inherently, areas with higher population densities, such as the inner city precincts and significant working nodes show lower amounts of private greenspace due to a predominance of multi-unit dwellings, as well as smaller lot sizes for detached homes where the dwelling often comprises a larger portion of the land. Unsurprisingly, we can see a clearer relationship between private greenspace and housing price premiums.”
Mr Lawless says “In these higher density precincts, efficient access to public greenspace becomes all the more important, with a statistically significant positive relationship between unit prices and proximity to green areas such as parks and reserves.
“In areas where greenspace was scarce, such as the Eastern Suburbs and Inner City, private greenspace has a far stronger relationship with price. This finding is unsurprising given the high price of land and inherent scarcity of private greenspace areas in these precincts.”
Mr Lawless says “As Australia’s climate change strategies and domestic policy evolve over the years ahead, the market’s readiness to value ‘greenness’ as a tangible property feature may strengthen. Leaning on the findings from international studies, there are also the mental and physical health benefits that make a ‘greener’ location more desirable. For this reason alone, it’s important for town planning regimes to ensure existing greenspaces are preserved and newly developed areas include appropriate allowances for greenspace.
“Looking forward, as our cities grow and densify, it’s likely the relationship between greenspace and housing values will become clearer and more widespread. For detached housing, as lot sizes progressively reduce, ‘smart’ designs that incorporate yard space are likely to become increasingly important and popular with buyers.
“For higher density areas, the inclusion of public greenspace areas in the planning and design is also important, with projects that offer green amenity likely to stimulate greater demand and price premiums over those that have less of a connection with green areas,” says Mr Lawless.