However, is it possible to assess whether that premium is valid relative to the amenity a location offers? Conversely, are there locations that provide better value relative to the amenity offered?
The Walk Score provides an objective measure of a location by rating (out of 100) how close, in terms of walkability, it is to services such as shops, recreation, public transport, etc. In theory, people will pay a premium for having this level of amenity close by. The Walk Score web site offers an overall Walk Score for total suburbs as well as individual locations.
The chart below plots the Walk Score for each of Melbourne’s suburbs against its median house price in 2013. As would be expected, the median house price tends to increase with a higher Walk Score and the trend is upwards. The median Walk Score of Melbourne’s 346 suburbs is 57.
Most of the data is bunched around the trend line. However, the outliers show those suburbs where the price is high relative to its Walk Score (overpriced) or the price is low relative to its Walk Score (underpriced).
Median House Price Versus Walk Score, Melbourne Suburbs
So which suburbs in Melbourne offer the most (and least) “bangs per buck” on this basis?
The chart suggests that the two most expensive suburbs, Toorak (Walk Score of 74 and median house price of $2,800,000 in 2013) and East Melbourne (92 and $2,505,000), are overpriced relative to the amenity that they offer. Nevertheless, they are still in a bracket of suburbs with a high Walk Score.
In comparison, suburbs such as Park Orchards, Lysterfield South, and Narre Warren North also appear overpriced relative to a Walk Score below the median of Melbourne’s suburbs. However, these locations offer acreages and the high price reflects the larger lot sizes (which in turn also diminish walkability). Outside of the acreages, the most expensive of the suburbs with a Walk Score below the median of Melbourne suburbs is Templestowe, which has a median house price of $862,500 and a Walk Score of 46.
The best value suburbs are those that have the highest Walk Scores for the lowest prices. In terms of the “highly walkable” suburbs with a Walk Score over 90, Collingwood offers the best value, with a Walk Score of 92 and a median house price in 2013 or $750,000.
Amongst the suburbs that offer a good level of walkability, the best value suburbs are Footscray (Walk Score of 78 and median house price of $595,000 in 2013), Sunshine (71 and $433,000), Watsonia (69 and $505,000), Tullamarine (68 and $395,000) and Heidelberg West (68 and $424,500). All of these suburbs have a Walk Score well above the median Walk Score of 57.
Rating Melbourne’s suburbs on a “dollar per Walk Score basis”, the top 10 Melbourne suburbs can be seen below. All are established suburbs which are located a few suburbs inside outer Melbourne’s growth corridors to the west, north and south east.
Dallas is the most affordable in terms of the value offered per Walk Score point, and its low median house price is a reflection of its relatively low Walk Score. The most walkable of the top 10 is Sunshine which has a Walk Score of 71, while still having a relatively affordable median house of $433,000.
Top 10 Most Affordable suburbs On A $ Per Walk Score Basis
By Angie Zigomanis, senior manager – residential property, BIS Shrapnel. Angie holds a Bachelor of Business (Property) from the University of the Royal Melbourne Institute of Technology and heads BIS Shrapnel’s Residential Research Unit. He previously worked as a research officer in the property consultancy of CB Richard Ellis (Victoria), before beginning his tenure at BIS Shrapnel in 1996 on assignment to Urban Land Corporation (now Places Victoria), providing an in-house consultancy role.
Angie has worked across both BIS Shrapnel’s Sydney and Melbourne offices, with his role having expanded to cover residential property nationally over this time. Now based in the Melbourne office, Angie is responsible for BIS Shrapnel’s range of regular residential market studies including Residential Property Prospects, Inner City Apartments, Apartments in Sydney Suburbs, The Outlook for Residential Land, and Emerging Trends in Residential Market Demand. http://www.bis.com.au/bis_shrapnel_blog.html
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