The importance of neighbourhood in a COVID world

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In our COVID-based world, selecting a great property location is more important than ever if you want your property to outperform the market.

Property MarketIn fact, this will be more important than ever considering the way we’re likely to be working in the future.

With the global pandemic expected to linger for months, if not forever, in our community since even with vaccinations, viruses rarely completely disappear, it will be critical to understanding both your property’s neighbourhood surroundings as well as the adjusted ideals of the perfect property in the new world we’re living in.

Remote worker statistics affects property ideals

As we approach 18 months of living with COVID-19, remote workers’ priorities and expectations are rapidly revising, which in turn is affecting property types and designs.

JLL’s Worker Preferences Barometer 2021, conducted in March and released in June, reveals a clear indication of this shift with 90% of the Asia Pacific workforce stating it strongly misses a working environment.

Just 23% of employees surveyed felt connected to their colleagues with the top three most missed aspects of office lifestyles being human interaction (52%); professional environments which supported access to work needs (52%); and clear boundaries between personal and professional lives (46%).

“Homeworking fatigue is growing with employees feeling stuck in an ‘endless day’ and craving social interaction,” the survey states.

“Long-lasting homeworking is hiding a heavy social and mental toll with 54% of office workers feeling feel overwhelmed by a huge mental load.

“Quality of life is not fulfilling without a rich social life and change of scenery.”

Chart1

Other key points revealed in the survey were remote office workers’ keen desire for an improved work-life balance, with 90% of employees eager for more flexible working hours and more balanced working patterns in the post-COVID-19 world.

Chart2

Working in the office at least one day a week suited eight out of 10 office employees with the ideal being three days in the office and two days working remotely.

Fig3

The rising popularity of 20-minute neighbourhoods

Housing Market CrashThis data alone converts into the clear fact that properties close to essential services are crucial for weary, locked-down remote workers missing office life.

Think supermarkets, post offices, medical health centres and cafes as well as schools, parklands and public transport.

Yet even before COVID arrived on our doorstep, people were keen to live in “20-minute neighbourhoods”, or areas where such services are within a 20-minute walk, drive or cycle.

As a result, property values in 20-minute neighbourhoods are growing and should therefore be the first place that buyers explore for almost guaranteed, excellent performance in the long term.

If social distancing and the COVID-19 environment has taught us anything, it has taught us the importance of the neighbourhood we live in

Small DisctrictIf you can leave your home and be within walking distance of, or a short trip to, a great shopping strip, your favourite coffee shop, amenities, the beach, a great park, the recently implemented coronavirus restrictions might seem a little more palatable than if you had none of that on your doorstep.”

Property buyers should ensure their potential purchase is in a “lifestyle and destination suburb”, particularly areas that are currently enjoying gentrification.

These will be suburbs where incomes are growing, which therefore increase people’s ability to afford, and pay higher prices for property.

The key criteria for a ‘good’ neighbourhood

The neighbourhood has always been a key factor to consider when buying an investment property, and now it’s even more important.

Here is a list of 7 primary neighbourhood factors which have the potential to drive up property prices:

1. Close proximity to public transport

Neighbourhoods with properties that are within walking distance to public transport, such as the train, bus, ferry or light rail, are popular with buyers and therefore are likely to add value over the longer term.

School Zone2. Close proximity to schools

 Some buyers will pay a premium to be in the catchment area for particular schools and as such, high demand generally means higher property price points.

3. Accessible amenities

 As we have previously discussed, a neighbourhood with all the local amenities you could want – parks, shops, restaurants, cafes, gyms, the beach etc. – would fetch a premium price for its local properties.

4. A low crime rate

 It goes without saying that a property in a neighbourhood with a low crime rate will be more valuable than one with a high crime rate.

5. It’s well maintained

Neighbourhoods and homes which are well maintained and clean indicate a level of community care that can help add value to properties in the local area.

Builders6. Planned upgrades that are beneficial

Neighbourhoods with planned upgrades could be beneficial or detrimental to property prices in the area.

For example, improved public transport and any plans to make the neighbourhood more visually attractive (improvement to the appearance of buildings or footpaths for example) could increase property prices.

7. Any historic charm

Historic charm brings unique character to a neighbourhood that is often in demand by buyers and in the long term buyer demand for this type of area has the potential to translate to higher property prices going forward.

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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au


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