How much would you pay to live next to a piece of history?
Recent research by Auckland Council has revealed Aucklanders are prepared to pay more for a house close to a scheduled heritage place and within a special character area.
'Scheduled historic heritage places' are those protected for their heritage values – for example, if they have historical associations or particular architectural and social worth.
'Special character areas' are groups of properties protected for their collective and cohesive values.
To ensure the investigation exclusively analysed the impact of heritage and special character, the researchers from the Heritage and Research & Investigation Units accounted for over 300 other non-heritage factors including types of house, zoning, distance to other amenities, the suburb, neighbourhood and the month or year of sale.
Breaking down the statistics, people are willing to pay approximately 5.3 per cent more to live in a Special Character Area (SCA) – a price premium of $50,000 more than Auckland’s average house price.
The research, which analysed residential property transactions between 2006 and 2016, revealed this price premium held firm from 2006 to 2014, even during the financial crisis of the late 2000s. However the number dropped post-2014; it is speculated this could be related to the negative publicity and up-zoning of Auckland’s Unitary Plan, however, further research is needed to confirm this point.
David Bade, a Senior Specialist in Historic Heritage at Auckland Council says he’s intrigued by the interest and excitement people have around Auckland’s heritage.
“One of the most interesting discoveries we made is there’s a heritage ‘aura effect’ around scheduled historic heritage places,” he says. “Property prices rise the closer you get to heritage places – it illustrates how much Aucklanders value their heritage.”
Properties located within 50m of a scheduled heritage place have a price premium of 2.3 per cent – around $21,000 more than the average Auckland house price. When you move to 100m of a heritage place, properties have a 1.6 per cent premium – $15,000 more than the average house price.
The research also disproved the common perception that people are willing to pay less for a heritage house because of restrictions that may be imposed on additions and alterations of the building.
Although the data revealed there was no price premium for individual heritage houses, there was also no relationship indicating a lower market value for heritage houses – demonstrating that scheduling does not lower the market value of a house in Auckland.
Further research and statistics on the economic and social benefits of heritage will be released during the Auckland Heritage Festival in October this year.