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Small businesses causing rocketing house prices

Samantha Menzies
Small businesses causing rocketing house prices

Small businesses are driving up the median value of surrounding house prices in Australia.

Almost half of Australians looking for a new home are willing to pay a premium for a property located near a village or cluster of small businesses.

Also read: Blocks to gettting on the property ladder

Australians looking to buy a new home would invest, on average, an additional 4.4 per cent or $30,486 for a house located near a local shopping village, a new report commissioned by American Express, reveals.

The analysis confirms that each small business in close proximity to houses, delivers an average increase of $164 to the median house price, holding other factors constant.

“Despite auction clearance rates slowing and interest rates at record lows, if you compared house prices from a community with the average number of small businesses with one which had twice this amount, the estimated median house price in the latter would be 10 per cent higher,” said Byron Rose, CEO of real estate firm Rose and Jones.

In terms of the type of small business, 68 per cent of Australians say access to healthcare services is very important, while 64 per cent want specialised convenience stores such as a deli, butcher, fruit shop and fishmonger.

Also read: Aussies view the housing market as "vulnerable"

Similarly, 59 per cent would look to be located near libraries and newsagents.

Lowest on the priority list was professional services firms, such as accountants and lawyers.

Also, 38 per cent of males agreed it is a priority to live near a bottle shop, compared to 31 per cent of females.