Small Businesses Drive Local House Prices Upward
By Peter Sarmas on 7 Nov 2015
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Photo Source: heraldsun.com.au
Research Shows Small Business Clusters Improve The Value of Surrounding Homes in Australia
New research reveals the financial benefit small businesses deliver to local communities and their ability to drive the value of Australia’s median house price upward.
New research has shown almost half (47%) of Australians in the market for a new home are willing to pay a premium to purchase a property located near a local village or cluster of small businesses. This is according to the Economy of Shopping Small Report– commissioned by American Express, which has uncovered the emotional and physical benefits Australian small businesses deliver to the community.
The latest findings show Australians looking to buy a home would invest – on average – an additional 4.4 per cent or $30,486 for a home located near a local shopping village. This positive finding is derived from analysis confirming that each small business in close proximity to homes, delivers an average increase of $164 to the median house price, holding other factors constant.
“Many factors contribute to the price of the average home, but probably unknown to many, is exactly the extent small businesses play in boosting property prices. 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 (375) with one which had twice this amount, the estimated median house price in the latter would be 10 per cent higher,” said Byron Rose, from real estate firm Rose and Jones.
American Express’ research report, The Economy of Shopping Small, reveals that the physical benefits delivered by Australia’s small businesses, extend far beyond house prices. Almost two thirds (62 per cent) of Australians agree small businesses improve the aesthetics of the surrounding area, 60 per cent say they boost the standard of living, and 58 per cent state they provide community support in the form of donations.
The notion that Australia’s small business owners do not solely measure themselves on financial success, is again evident with four-fifths of respondents judging business performance on the social and financial impact they have in the local community.
“It’s the human side of small businesses which sets them apart from their large counterparts, and it’s for this exact reason we need to fuel consumers’ passion for our country’s small business owners,” said, Melanie Cochrane, Senior Vice President American Express Global Merchant Services.
“Small business owners are willing to go above and beyond to meet our needs unlike any other business can and the benefits they deliver are far reaching. Whether it’s simply greeting us with a smile, or adding significant value to our house price, they are at the heart of our communities. Their success is ultimately our success, and it’s our responsibility to ensure they have the support they need to deliver it.
“The research highlights the benefits small businesses deliver to our communities that go beyond just the service they provide, by contributing to the community and home-owners back pocket. As consumers, it’s in our best interests to Shop Small, ensuring the future success of the communities we live in and the business owners responsible for shaping them,” added Ms. Cochrane.
