Is there still value in the humble backyard?
When you think of a typical suburban home, what do you see from its window?
There may be kids playing cricket or adults gathered around a BBQ. Perhaps you see a swimming pool, a trampoline, a veggie patch or a deck?
Whatever you see, the enabling factor is almost certainly the home’s underlying land.
And yet population studies confirm our cities are becoming denser, and standard housing block sizes are getting smaller, ranging from 200 sq m to 350sq m on average (or roughly half what they were 30 years ago).
So what impact is this having on the value of the traditional backyard?
Developer Ashley Lewis of Five Squared has helped create 1000s of suburban backyards in new estate communities across middle and outer suburbs of Melbourne this past decade.
Lewis acknowledges some homebuyers are foregoing land to buy apartment homes closer to Australia’s CBDs.
But his firm view is a backyard does “get more valuable over time,” delivering more value because of its land.
A backyard delivers more value over time because of its land.
Lewis says backyards have intrinsic value because they offer:
- Room for expansion if you later decide to add a rumpus room or a pool;
- Room for children (or future children) to run around;
- Greater prospect of capital gain over apartments in saturated inner/middle suburbs;
- A desirable lifestyle with more private entertaining options;
- If located in a planned community, proximity to amenities and services.
“They (backyards) may be a bit smaller than they used to be but the fundamentals of what has always made backyards appealing are still there,” Lewis says.
“Average block sizes are getting smaller so there is a little less grass to mow on the weekends, but that isn’t necessarily a bad thing.”
A little land, a lot of value
Hocking Stuart Mentone Sales Manager Simon Wendt believes many buyers are turning to apartment homes because of affordability and a low-maintenance lifestyle.
The southern bay-side Melbourne agent adds that “given a choice” most people would prefer a home on their own land, citing latest median sale price statistics from the Real Estate Institute of Victoria, which show house prices in Mentone rising by 1.23%in the September quarter compared to 1.19% for apartments.
“The divide between apartments and houses (values) will continue to become more pronounced because there is a high value attached to it (a yard),” Wendt says.
“As long as people can afford to, if they look just outside the inner radius of suburbs they’ll still find older houses with backyards for the same prices as new townhouses and it is these middle-ring properties with land that stand to most benefit long-term.”
Read more: Investing in property – apartment or house?
In the green corner
Josh Byrne is an independent advocate for the 202020 Vision, a not-for-profit initiative to see 20% more green space in dense urban areas by 2020.
Byrne says it will come as no surprise that the size of the average Aussie backyard is shrinking and the number of people moving to apartments is increasing. But he also notes growing interest in gardening and outdoor living, especially from young families who are recognising the benefits of getting kids outside.
The Aussie backyard is shrinking and the number of people moving to apartments is increasing.
“Bigger blocks and expanding suburbs are not the answer, but perhaps smaller houses with better designed blocks and shared green spaces are,” Byrne says.
“For those who are lucky enough to have some decent existing garden space around them, maybe think twice before building over it, you might be surprised how much value it adds.”
Read more: 6 simple ways to enhance your garden
The last word on backyard values
“Land, they just don’t make it any more,” quips Managing Director of Herron Todd White in Melbourne, Tony Kelly.
“As we learnt in high school, markets react to supply and demand forces and as we are not able to add supply to the freehold market, we can to the vertical or strata market, which drives up capital appreciation faster for freehold property (the backyard) versus apartments.”
Governments and people reflect the value of the backyard when they relax planning to allow medium density development, Kelly says.
“The free market does the rest as home owners sell to developers (and) in the valuation profession we seek to understand the ‘the highest and best use’ of the land, which in many cases, particularly inner suburbs, means the backyard is no longer a nice thing to have but a development opportunity.”
“Some will say that we, as Australians, have been slow to give up the humble backyard compared to some countries.
“But this is changing as affordability pressure pushes backyards further from the CBD and people face the trade-off of reduced travel times and convenience versus spaces to live in.”
swanvalleyrealtyblog.wordpress.com 