17 July 2013 The value of vegetation in inner city Melbourne

Location, style and condition. These are often the first things prospective buyers consider when purchasing a house.

In a competitive market it is the less obvious features that may be even more important to take notice of. This report takes an in depth look into how median strips, front gardens and vegetation affect property prices based on 2100 housing sales in 2012.

It would be thought that these features would automatically add value to the property, however, this was not the case in all suburbs.

Median Strips

They make the road visually appealing. Most of us, as pedestrians, have used them to safely cross to the other side of the road.

We don’t really have control over whether they are there or not but potential property buyers should consider how a median strip affects house prices in the suburb of interest because it can make a huge difference.

Based on their visual and safety benefits you would think that houses built on streets with median strips would be more valuable than those that are not. This was generally the case for the 28 inner city suburbs surveyed.

For example, if you wanted to purchase a house in Clifton Hill, on average you would pay $695,000 more if the house was exposed to a median strip. In the most extreme case, a house in Parkville on a street with a median strip could cost you over 1 million dollars more than a house on a street with no median strip.

However, in some suburbs, the absence of median strips was more valuable than the presence.

Again, at the extreme end of the spectrum, a house in East Melbourne without a median strip was approximately $750,000 more valuable than one with a median strip. Similarly, Hawthorn houses without a median strip were $370,000 more expensive.

Overall, based on 2100 housing sales in 2012, a house with exposure to a median strip was on average $90,000 more valuable.

The difference between having a median strip or not was less than $50,000 for Brunswick East, Carlton North, Flemington, Kensington, North Melbourne and Port Melbourne.

The extreme differences observed are most likely a result of a lack of sales in the low turnover suburbs such as East Melbourne. In other words data was not sufficient enough to produce generalizable results. Also, properties included in the data may have been those that face a median strip and a park.

Thus these properties would have had value added primarily from the park view rather than being on a street with a median strip. In other words, it is necessary to consider the other contextual factors that may play a part in the sale in addition to the presence or absence of median strip.

Front gardens

When present, front gardens can be an attractive first impression of a house. However, if not maintained, they may become untidy and cause the house to lose visual appeal and value. The setback of buildings from the street is a predetermined characteristic of the neighbourhood and must be strictly adhered to.

This means that after purchasing a property, changing whether or not you have a front garden may not always be possible.

According to the analysis of 2100 housing sales in 2012, Cremorne and West Melbourne were the only suburbs in which having a front garden did not add value to the property. In fact, having a front garden in these suburbs caused a loss of $23,000 and $91,000 in value for Cremorne and West Melbourne respectively.

Houses in the other 26 suburbs surveyed all sold for an average of $230,000 more with a front garden than those without. The biggest difference was in East Melbourne where you can expect to pay up to $980,000 more if you want a house with a front garden.

To gain meaning from this result it is necessary to think about the style of houses that were sold. In the highly industrialized suburbs of Cremorne and West Melbourne, converted warehouses contribute to the sales. Hence an old run down house with a front garden probably will not sell for as much as a newly renovated, modern warehouse which is built on the boundary and for that reason is without a front garden.

In the other inner city suburbs such as East Melbourne, having a house with a large setback from the street was considered a valuable aspect when these properties were built and this value has carried through to this day


Whether walking or driving, there is something special about turning into a tree lined street.

Other than being aesthetically pleasing, vegetation increases surrounding air quality, decreases criminal behaviour such as vandalism and provides shade to a building thereby reducing the demand for air conditioning. Hence it is not surprising that there is a positive correlation between density of trees in the area and property value.

This study analysed 2100 property sales and categorised these based on vegetation levels. Vegetation was labelled as either non-existent, sparse, or dense.

It was found that those houses in the midst of dense vegetation sold for approximately $340,000 more than those with no vegetation.

Even houses with sparse vegetation yielded an extra $135,000 on average. In other words, the more trees in the street, the higher the sale price of the adjacent property.

Looking at the data from a pricing angle showed this even more dramatically. When categorised into pricing brackets it was found that houses above $900,000 are more likely to have dense street vegetation, whereas houses in between $400,000 and $700,000 have sparse or no vegetation.

Approximately 75% of the market with sparse or no vegetation were those houses selling for between $400,000 and $500,000 and 75% of the market with characteristically dense vegetation were those houses in the $2,000,000+ bracket.

There could be a few reasons for the above findings.

If we take a step back in time to when these inner city properties were first built, it is easy to imagine that the wealthy families of the time chose to build there majestic homes in the greener areas of the city. Or on the other hand, it could be that builders in the past spent just as much time creating a lush environment around a property and thus the wealthier owners not only built better houses but also more vegetation around their home.

From a current perspective, this may come down simply to human nature. Evolution has shaped our desire for green and lush areas and thus we are willing to pay more for property surrounded by dense nature.

Reproduced in full with permission:
Property Observer
The value of vegetation in inner city Melbourne
9 July 2013

Attention: This article is intended to provide general information only. Every attempt has been made to ensure the accuracy of this information at the date of publication. The opinions expressed in this article do not reflect those of DHA, its staff or agents. Property prices are subject to fluctuation. Prospective investors should seek independent advice. DHA will not be liable for any loss, damage, cost or expenses incurred or arising by reason of any person relying on information in this article.