‘Sunny’, ‘sun-drenched’, ‘light-filled’, sunshine is always considered a selling point for property. But how much value does an hour's sunshine really add to your final sale price? New research suggests 2.4%.
The study sampled some 5000 recent property sales from Wellington’s metropolitan area, cross-referencing sales data from the Real Estate Institute of New Zealand (REINZ) with information relating to elevation, view span and direct sunlight exposure using topographical models from the Wellington City Council (WCC).
Interestingly, Wellington was chosen for its relatively small size, buoyant local economy and seemingly stable housing market. However, the city is also characterised by a number of hills and valleys, which ensure a large variability of sunlight exposure between homes in the same neighbourhood.
The research found that the average home surveyed had a value of $632,000 for 3.3 bedrooms and received 8.7 hours of direct sunlight every day across the year.
While some homes received just 3.7 hours of sunlight, others gained more than 11 - and the research concluded that home buyers were prepared to pay 2.4% of the home’s value for every hour of sunlight.
While most understand the value of warm, natural sunlight when selling a home, the study presents an interesting formula for developers increasingly coming under scrutiny amidst the plethora of new development sweeping Auckland City.
“Developers themselves could also make use of this new information, in deciding how much to bid for land on which to develop, a developer must estimate the sale price of the ultimate property,” the study says.
“Consider a new multi-storey development that will block three hours of direct sunlight exposure per day (on average across the year) for two houses each valued at $1 million. According to the research, the resulting loss in value to the home owners is in the order of $144,000.
“Instead of regulating building heights, the developer could reimburse each home-owner $72,000.
In return the developer would be otherwise unrestricted (for sunlight purposes) in the nature of development."
As the first study of its type, the research shows that almost everything is quantifiable, and while local councils have regulatory measures (height restrictions/requirements) in place to preserve a property’s right to sunshine and views, the shift to a price-based approach could have some merit amidst the city’s growing intensification.
The authors of the study ‘Valuing Sunshine’ are David Fleming, Arthur Grimes, Laurent LeBreton, David Mare and Peter Nunns from Motu. Thanks for reading. (KAREN SPIRES)