Can location make a 1,500% difference to a property’s price?
Experts have always touted the value of location, with new research that compares the price of a typical four-bedroom house across 12 Australian suburbs confirming just how much a property’s value can be swayed.
PropertyPricer, a real estate valuation site, has chosen a four-bedroom, two-bathroom home on a 665-square metre lot with a swimming pool and a double-vehicle garage for the study.
The researchers identified suburbs in the same state then compared the value of the same house. The results revealed a huge disparity in prices.
In Sydney, the house was appraised at $800,000 in the outer western district of Penrith, compared to $5.5 million in the elite harbourside suburb of Darling Point, showing a massive difference of 588 per cent.
In regional NSW, researchers looked at the property’s value in Byron Bay, which has had the sharpest price growth of all suburbs in Australia over the year, and in Orange. The property was valued at $2.3 million in the former and $550,000 in the latter, indicating a 409 per cent value difference.
Moving up to the Sunshine State, the house was worth $332,000 in Logan, Brisbane, but was estimated to be worth $2.1 million in New Farm, representing a 533 per cent difference.
Zooming into Noosa in regional Queensland, which also saw sharp price growth in the past 12 months just like Byron Bay, the house was assessed at $1.8 million. It was just $1.3 million in the Gold Coast suburb of Southport, resulting in a 38 per cent difference.
Heading south to Victoria, the house was valued at $3.4 million in the Melbourne bayside suburb of Brighton. In comparison, it was priced at $1.6 million in Box Hill, representing a 113 per cent difference.
In regional Victoria, the house was worth $1.1 million on the Great Ocean Road in Torquay and $735,000 in Kyneton, indicating a 49 per cent disparity between the two locations.
While the number one rule “location, location, location” has been often repeated in real estate, PropertyPricer chief executive and founder Ross McLelland claimed, “these results really drive that message home in a tangible, measured way”.
The CEO thought it was remarkable to consider how the same home may have such a vastly different value depending on its location.
In conclusion, Mr McLelland pointed out “the importance of understanding your home’s true value, based on a wide variety of factors – location being just one of them”.
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