Material on property investing frequenly shows that capital growth, and thus land prices, decline with distance from the CBD (refer Wakelin et al).
We are also aware that beachfront properties with views command high prices. If it's across the road from the beach but there no views, the price is lower, but still high.
Walking distance from the beach is pretty good also (especially if there is no highway or railway in between), so you can expect better than average prices in these areas as well.
Assuming they have no special features, the inland suburbs are cheaper still.
Note though that 3km from the beach would be an inland suburb for a regional city, whereas for a large capital, it is closer than most suburbs to it, and agents can still reasonably advertise 'handy to beach'.
Has anyone actually done an analysis of the extent to which land values fall away as you get further from the beach? Do such patterns tend to be linear, logarithmic or inverse-logarithmic progression?
For instance, a beachfront house with views might be $X, one across the road from a beach is 0.7 $X, one a few streets back is 0.5 $X and one inland may sell for 0.3 $X. Note though that the houses may be different, so there is a need to calculate on land values only.
Put distance across the x axis and price for the y axis.
I haven't done this exercise myself, so I don't know if the shape and steepness of the gradient varies between regional and metropolitan coastal areas.
Obviously more people want waterfront views in Brighton than Carnarvon (to pick a random example), so the houses with waterfront view will be dearer in the former.
However a house 3km inland from Brighton Beach would still attract a 'coastal' premium, so it would also be expensive. In contrast, a house 3km inland from somewhere like Carnarvon would attract no coast premium at all as almost all houses in town are no further than this inland. So the price ratio between coast views and non-coast houses (or more precisely their land component) might not necessarily be that different, even though the locations couldn't be more different.
It could be another story again with an outer suburb not considered as desirable as Brighton; Frankston for instance. Waterfront houses there are dear, but inland are much cheaper. Therefore the gradient could be quite steep.
Such graphs could be made every few kilometres along the coast, (eg Mentone, Mordialloc, Chelsea, Carrum, Seaford, Frankston, Frankston South etc), so you get results in two, not just one, 'dimensions'.
Taking into account future developments, projected demand and local amenity, could such Beach-Price gradient graphing be a useful tool in identifying potentially underpriced areas, much as people now do this with distance from the CBD maps?
For instance, if a graph is particularly steep or has a flat spot (eg no price difference between 0.5 and 3 km back from the beach), then wouldn't the area at 0.5km distance be worth investigating further as an 'up and coming' locality?
Rgds, Peter
We are also aware that beachfront properties with views command high prices. If it's across the road from the beach but there no views, the price is lower, but still high.
Walking distance from the beach is pretty good also (especially if there is no highway or railway in between), so you can expect better than average prices in these areas as well.
Assuming they have no special features, the inland suburbs are cheaper still.
Note though that 3km from the beach would be an inland suburb for a regional city, whereas for a large capital, it is closer than most suburbs to it, and agents can still reasonably advertise 'handy to beach'.
Has anyone actually done an analysis of the extent to which land values fall away as you get further from the beach? Do such patterns tend to be linear, logarithmic or inverse-logarithmic progression?
For instance, a beachfront house with views might be $X, one across the road from a beach is 0.7 $X, one a few streets back is 0.5 $X and one inland may sell for 0.3 $X. Note though that the houses may be different, so there is a need to calculate on land values only.
Put distance across the x axis and price for the y axis.
I haven't done this exercise myself, so I don't know if the shape and steepness of the gradient varies between regional and metropolitan coastal areas.
Obviously more people want waterfront views in Brighton than Carnarvon (to pick a random example), so the houses with waterfront view will be dearer in the former.
However a house 3km inland from Brighton Beach would still attract a 'coastal' premium, so it would also be expensive. In contrast, a house 3km inland from somewhere like Carnarvon would attract no coast premium at all as almost all houses in town are no further than this inland. So the price ratio between coast views and non-coast houses (or more precisely their land component) might not necessarily be that different, even though the locations couldn't be more different.
It could be another story again with an outer suburb not considered as desirable as Brighton; Frankston for instance. Waterfront houses there are dear, but inland are much cheaper. Therefore the gradient could be quite steep.
Such graphs could be made every few kilometres along the coast, (eg Mentone, Mordialloc, Chelsea, Carrum, Seaford, Frankston, Frankston South etc), so you get results in two, not just one, 'dimensions'.
Taking into account future developments, projected demand and local amenity, could such Beach-Price gradient graphing be a useful tool in identifying potentially underpriced areas, much as people now do this with distance from the CBD maps?
For instance, if a graph is particularly steep or has a flat spot (eg no price difference between 0.5 and 3 km back from the beach), then wouldn't the area at 0.5km distance be worth investigating further as an 'up and coming' locality?
Rgds, Peter
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