When it comes to real estate, size isn’t everything. Obviously. Just look at the majority of inner city accommodation. The housing is generally smaller, but relatively more expensive than most outlying suburbs.
As far as city living goes, many people are prepared to sacrifice square feet for the convenience of an easy commute to work and a plethora of leisure activities to keep you entertained in your downtime.
It’s true…sometimes less is more. Here are 5 reasons why the ‘less’ that comes with inner city living will always cost you more as a homebuyer, property investor and tenant…
- Amenity & infrastructure
Our major population centres were all built around large ports, which makes sense given we’re girt by sea and heavily reliant on global trade and accessibility.
Further, with vast expanses of our country so arid you’d be hard pressed to sustain a humpy with a man and his dog, we’ve become a very city-centric nation.
In fact we’re one of the most urbanized nations in the developed world, with 89 per cent of us nestled in and around the bosom of our largest cities.
Sure, we’ve mushroomed out a bit over the years as our population has grown, along somewhat pre-planned ‘urban growth corridors’, but we largely live huddled together.
Like moths to a flame, we’re drawn to hubs of infrastructure and amenity, heavily reliant on public transport and major road arterials, as well as healthcare, education and other industry.
We will always pay a premium for the things we place most value on in life. Including the abundant lifestyle amenity on offer throughout our major cities, such as restaurants and cafes, upscale retail precincts and natural features like our much-loved bays.
Logically, with a larger concentration of infrastructure and amenity comes a more extensive jobs pool. And Australia’s big cities are no exception to this rule.
Much of the infrastructure support required by an array of industries can be found in our urban centres, where you also have the necessary foundations to support a growing number of workers.
While other areas might experience ‘flash-in-the-pan’ moments of greatness when a particular sector hits a home run – such as occurred with some regional towns during the resources boom – our cities offer consistency due to a diversity and relative abundance of employment opportunities.
Of course a home is about more than just a base camp for when you’re off duty from your day job. So it’s a good thing our major city centres also have an abundance of emotional appeal.
We love a good lifestyle here in Australia, and are globally recognised as the most chilled out, fun loving bunch of people you could meet.
Not surprising then that the areas we increasingly call home in order to be closer to work have developed into bustling, multi-cultural hubs bursting with 24/7 activity.
Buzzwords like ‘walkability’, ‘commutability’ and ‘café culture’ have become synonymous with city living. And areas once considered the domain of poorer, newly arrived immigrants have become nucleuses synonymous with upwardly mobile lifestyles.
Again, as more lower income earners are priced out of inner city areas, it’s likely we’ll see this trend continue. More disposable income attracts more businesses offering an outlet for your cash.
In turn, we see a further increase in lifestyle amenity, which leads to a flow on rise in the location’s…
How much do people want to live there? Often we hear about Australia’s ‘chronic housing shortage’, but rarely is this topic presented in perspective…that is, in consideration of demand relevant to supply.
Sometimes you see people spruiking outer suburban OTP dwellings and quoting alarmist data regarding forecast accommodation shortages to support their contention that property values are set to soar.
What they don’t tell you is that all those extra people are not necessarily clamouring to live on the outskirts of town.
Most of us want to be real close to the action. Hence, many inner urban neighbourhoods have morphed into our most sought after areas to live.
With extra amenity, comes extra desirability, comes extra people looking for a home, comes more business investment and amenity…and the cycle continues.
This goes hand in hand with the above and is perhaps the most fundamental reason the future of our inner city property markets is something you can virtually bank on.
We’re quickly running out of developable land, with our urban corridors hemmed in by zoning restrictions and natural impediments, such as mountains or harbours.
A piece of dirt in Sydney or Melbourne is as scarce as hen’s teeth now. And I’m sure people would pay a pretty penny for something as rare as hen’s teeth on EBay.
As demand continues to escalate, supply continues to dwindle across our inner urban areas. One and one make two. It’s simple cause and effect.