Carlton North homes benefit from bicycle lanes: Secret Agent
GUEST OBSERVER
Over 10,000 cyclists commute into Melbourne’s inner city every morning.
Many popular routes are located along residential streets. Secret Agent wanted to find out if the presence of a bicycle lane had any impact on house sale prices within a suburb.
Our sample consisted of 103 period house sales in Carlton North, 83 houses in Clifton Hill and 121 houses in Fitzroy North from 25 May 2015 to 8 June 2017. At least a third of the sample from each suburb consisted of houses facing bike paths.
A bicycle lane was defined as a pathway for cyclists clearly distinguished on both sides (left and right) from street parking and the main motorist thoroughfare. Lanes with a bicycle symbol on the road, but without clear delineation on either side, were excluded.
A hedonic linear regression model was used to study the effect of having a bicycle lane on the sale price of the property in each suburb. Other factors taken into account included the sale date, land area, number of bedrooms, bathrooms and car spaces.
We found that the presence of a bicycle lane had a strong positive effect on the sale price of a house in Carlton North, adding up to $250,000 in value. With
a median sale price of $1,371,000, this implies a premium of nearly 20%.
However, it had little to no effect on houses in Clifton Hill and Fitzroy North.
This result isn’t to be read merely on face value. The price premium in Carlton North could very well be a result of many positive characteristics combined - one of which is a bicycle lane. A street with a bike path in this suburb tends to have wider roads, more vegetation and even a median strip. These greener, wider streets boost social appeal and safety, adding up to a rather attractive streetscape for prospective buyers, as evident by the prominence of Drummond, Rathdowne and Canning streets.
A three bedroom house on 288 Richardson Street, Carlton North, recently sold for $1,550,000.
A two bedroom house with two bathrooms, 384 Canning Street Carlton North, is up for auction with expectations between $1.5 and $1.6 million.
For more information, click here.