Melbourne crime rates have no impact on property prices in the capital city’s suburbs, the latest report of Infrastructure Victoria has revealed. The study of 300,000 Victorian properties between 2013 and 2016 saw that violent crime rates in Melbourne's suburbs had no statistically major impact on house prices.
However, data also revealed that houses in the rest of Victoria can expect as much as a 5% hit to their values from a higher crime rate.
In June, the Crime Statistics Agency found out that the number of criminal incidents in the year to March 2018 dropped nearly 9% compared to the same period in 2017.
The results were in stark contrast with the decade of academic readings on property markets in Sydney, the United States, and England, which have consistently found a noteworthy negative effect on home values, according to The Sydney Morning Herald.
Looking at the figures from both CoreLogic and the Victorian Crime Statistics Agency, researchers Melek Cigdem-Bayram and David Prentice saw that a proportional surge in mostly violent crimes would be more likely to hit regional parts.
"Because there is less variation in crime rates across metropolitan Melbourne, buyers do not respond to difference that are not there," the report stated. "It is likely that Melburnians expect a certain level of exposure to crime irrespective of where they live."
Additionally, the research did not find any striking occurrences for crimes against property such as burglary or theft, regardless if the property was in a regional or city area.
"Put directly, there will be more property crime in areas with higher house prices as there is more valuable property to steal," the report said, but this had no direct impact on house prices.
In general, psychological harm to homebuyers caused by crimes targeted at people was more noticeable than the impact of property-related crimes like burglary.
"One possible explanation for why this may be the case is that some measures of self-protection can be taken to reduce the likelihood of property-related crimes while this is less the case for crimes targeted at individuals," the report found.
The Infrastructure Victoria authors said that the insights could be useful for targeting investment in justice service in areas where crime had a hold on other sector of economy, including home prices.
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