Remember, not all established properties are the same!
Long established communities where the most prestigious established property are located have great influence in maintaining the architectural style, look and feel of the area.
Heritage is something that local councils want to protect and includes the implementation of heritage listings and overlays and this reduces supply of the commodity, which is housing!
We all know what reduced supply does to value, especially when combined with high demand;
Less new properties in a suburb = less supply = less population = greater scarcity = increase in land value therefore, low population growth on a micro or suburb level is a positive for property values.
The older, more established property generally has architectural appeal and features that Australians love and, the ‘most’ established houses are located close to the CBD in the better locations.
Simply put, the first residents (and they were the well-off ones) built properties on the best land within a short distance of the main location for trade and commerce; what is now colloquially known as the CBD.
This is still the central location for professional and social congregation and the highest land value per square metre.
Established properties are more likely to have an optimal land to asset ratio and an established property will have completed some, if not all of its depreciation; this means the majority of the value is invested in the appreciating component of the asset - the land!
Fringe ‘greenfield’ new estates may offer large blocks of land, but...that doesn’t equate to a higher land to asset ratio. They certainly also do not provide a scarcity factor of land or dwelling.
In fact, the abundance (and lack of scarcity) of land in these new estates means that not only do they start with a lower value per square metre ( think about what happens when people have a decision between buying one of the hundreds or thousands of new properties nearby or your 5 or 10 year old property)
You don’t pay a ‘brand new premium’ for established property since paying for a brand-new property means that you also pay for the developer’s profits, the builder’s cost and skilled labour salaries.
This is all intangible.
For established property, you pay only ‘market value’.