When real estate agents make their opening address on why a property is deserving of your hard earned dollars, they don’t just address the king-size kitchen, Olympic length pool and movie theatre, they mention the nearby coffee shops.
According to Hockingstuart agent Daniel Atsis, café hot spots are driving property prices up and real estate agents aren’t afraid to use it as an attractive selling tool.
“Buyers are looking for established suburbs that sell ‘lifestyle’ with all the trimmings, and sellers are using those lifestyle attractions such as cafés to add value to their properties,” Daniel says.
He names the Melbourne suburb of Richmond “king of Melbourne’s café scene” and one such café melting pot that has redeveloped its image and created a lifestyle culture residents can’t get enough of.
“Ten years ago the area was consider a low budget demographic largely inhabited by the younger generation,” Daniel says. “As time has gone by, those young residents have got married, started sending their kids to nearby schools and with the vibrant café scene, they’re there to stay.”
Daniel says new residents are happy to squeeze themselves into tiny houses or renovate their medium-priced $1.4 million house for the sake of what’s on their doorstep.
“Richmond is close to the city and has a demographic of double-income earners. After the death of retail shops on Bridge Road, Richmond’s housing prices took off and the designer shops were replaced with cool restaurants and cafés. Those that live there go for the lifestyle, and its café scene is a great part of that,” he says.
Daniel adds that the City of Yarra is very proactive in building new residential multi-density developments and will generally open the lease for a café to be included in the complex because of the community role it plays. He says given the interest in the area, people are prepared to sacrifice things that were once deal-breakers such as large houses, car parks, and spacious kitchens and embrace lifestyle factors such as bike tracks and surrounding restaurants and cafés instead.
“It’s hard to put a number on the actual value a café adds to a suburb but it will continue to contribute to prices over the next 10 years. The commonality is that café hubs makes people stay in an area, not leave,” Daniel says.
According to the Reserve Bank, Australian weekly household incomes have grown by less than the price of a coffee a year since 2008, with house prices in Sydney and Melbourne rising by 100 per cent to reach medians of up to $1 million. Last year, millennials were asked to forgo their luxury $21 smashed avocado and specialty coffee should they ever wish to achieve the Australian dream of home ownership. However, Nerida Conisbee of Rea Group encourages Australians to keep on drinking.
“The more people drink coffee, the more highly desirable it is to live near a bustling café, which adds value to a property’s social offering,” Nerida says.
“There’s three key things buyers look for in today’s market: access to retail, public transport, and schools.”
Nerida says despite most modern households installing high-end coffee machines at home, people still love the interaction of going to a café.
“People value a daily chat, and it’s that connection that makes a barista so valuable in your neighbourhood,” Nerdia says. “No longer do residents have to travel to the city to enjoy good coffee, good coffee shops are found throughout the suburbs and can significantly change the dynamic of a retail precinct. A good coffee shop can transform a suburban area and encourage other retailers in because of the traffic it generates.”
In the past six months Nerida says property prices have really started to “settle down” with demand for properties across Sydney slowing dramatically due to sky high prices. In Melbourne, the market is proving to be more resilient, with premium inner dwellings such as Albert Park, Hawthorn and outer northern east suburbs such as Warrandyte, Dandenong, and Footscray still in high demand thanks to each suburb offering those three key buying tools.
Nicole Jacobs of Nicole Jacobs Property has observed the changing property landscape for the past 18 years. She says consumer preference for convenience and accessibility is driving a generation of homeowners and renters who know what they want.
“With the median price of properties up to $1 million plus, buyers are very particular with what they buy, and they should be. Buyers need to do their due diligence,” Nicole says. “I wouldn’t be spending that sort of money unless it was exactly what I wanted.”
Some of Nicole’s customers will only live on a certain side of the street, some will only purchase a property within 100 metres of a school they want, and more and more, her clientele wants close access to cafés they can walk to without jumping into a car.
“Walkability is an attractive feature to a buyer. People will pay for convenience. Infrastructure can add 10 to 15 per cent to a property,” she says. “We are a society where people want things instantly and at our fingertips. ”
Nicole says the desire to live near vibrant café hubs opposed to supermarket centres with ‘the lot’ is a growing generational trend. She says younger, professional couples are the most demanding for properties in trending café hot spots, however with property prices still a challenge for first home owners, Nicole suggests it might be worth foregoing luxury items.
“‘If you’re going to try and get into the property market you should look at your discretionary spend and that includes coffee and meals out,” Nicole says. “I know the younger generation don’t want to hear it, but it will help you afford something that’s further out with more bang for your buck, and potentially in a growing area. You might just need to invest in a good coffee machine at home instead.”
Nicole suggests to first home buyers that they look at older style shopping strips that may not be as ‘trendy’ yet, but over time could be.
“Once a good café comes in it’ll take off. Look at where big chain supermarkets have opened up, or new train stations have been installed. The research on captured markets and growth areas has already been done for you. It’s just a matter of time before it takes off. This means agents will use it as a selling tool, and if you’re buying you’ll know it will increase in value with time,” she says.
Some things don’t change though. Nicole says property owners still want to be within a 10-kilometre radius of the CBD, and salaries have not risen in relation to home prices. What has changed is how much Australian consumers value their coffee.
“‘Australians value their coffee as much as they value their property. I would choose to live near a café too,” Nicole says. “If I’m a struggling first time home owner however, I wouldn’t go as far as drinking instant coffee to save money. We do have standards.”