Many people think a heritage listing dooms a property to low economic returns. It may be pretty, but, for a good investment, look elsewhere. However, studies have shown that heritage listings can often provide a real economic benefit to the owner.
An Australian paper that collated international research showed that heritage listing alone does not affect property prices one way or another.
A survey of real estate agents active in historic residential areas was also undertaken as part of this paper. The results supported the view that heritage listing generally has little impact on residential property values. The agents also pointed out that the qualities of historic residential properties (eg charm, character) are generally emphasised as a positive attribute in marketing campaigns.
A Victorian study focussing on Maldon and other towns in the Victorian goldfields area, over the period 1970 to 1990 showed that the value of heritage listed residential buildings in Maldon appreciated 1844% over the 20 year period, compared with a lesser appreciation of 1432% for other residential buildings. The demand for heritage houses was also greater than for other residential property, with shorter sale periods and greater buyer interest.
In England, a study by Royal Institute of Chartered Surveyors and English Heritage examined the performance of office buildings in the UK over the period 1980-1996. The report concluded that "the total annualised returns on the heritage listed buildings over the period were slightly higher for listed buildings [than for non-listed buildings]. A second result was that listed buildings attracted just as much occupier demand as other categories, and achieved rates of rental value growth which were as good as, or better than, those of other categories.
In general, however, property values for both heritage and non-heritage buildings, are determined by a range of factors including zoning, other planning requirements, lot sizes, types of surrounding properties, the level of amenities and services in the surrounding area, tenancy opportunities, prevailing trends in the 'market cycle', the social profile of areas, and the quality and maintenance of individual buildings.
The Tasmanian Heritage Council completed a study of changes in the property values of heritage-listed properties in Tasmania's major population centres to understand the effect of heritage-listing in Tasmania. Similar to other studies, the findings were inconclusive, highlighting that a range of factors affect property prices.
For more detailed information on the above research, click here.