There’s one group in the community that doesn’t get the thanks it deserves when it comes to vibrancy of Australia’s housing sector: small business owners.
According to research published this week, without realising it small businesses are adding to the median house prices in Australia.
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The Economy of Shopping Small Report, released by American Express to coincide with the Shop Small campaign, found almost 47% of potential home owners are willing to pay a premium to purchase a property located near a cluster of small businesses.
The study found Australians will invest, on average, an extra 4.4% of $30,486, to purchase a home that is located close by to a local shopping village and each nearby small business delivers on average an extra $164 to the median house price, all other factors being the same.
The same study found 60% of Australians believe small businesses boost the standard of living in their local community and 62% say small businesses improve a community’s aesthetics.
“Many factors contribute to the price of the average home, but probably unknown to many, is exactly the extent small businesses play in boosting property prices,” Byron Rose, from real estate firm Rose and Jones, said in a statement accompanying the report.
“Despite auction clearance rates slowing and interest rates at record lows, if you compared house prices from a community with the average number of small businesses (375) with one which had twice this amount, the estimated median house price in the latter would be 10% higher.”
But while this impact is rarely quantified, it’s something that we in the small business community already know.
Labelling small business as the “engine room of the economy” has become something of a cliche, but it’s a cliche because it is true.
Australian small businesses create jobs for millions of Australians. They make buying a house in a particular location more attractive. They drive innovation and creativity.
And they sustain and give life to our local communities.