Why proximity to green space in cities drives up property prices

The CBD’s transformation into one of Sydney’s most desirable residential locations is gaining pace, prompting developers and buyers alike to place bets on which residential developments will become the most prestigious and valuable in the years ahead.

Downtown Sydney is full of enclaves with exceptional growth potential, from bustling Circular Quay in the north to colourful Haymarket and Chinatown in the south. But the areas currently exciting developers the most are the Town Hall precinct and, sitting alongside it, the CBD’s crown jewel: Hyde Park.

A quick glance at major cities around the world shows a clear correlation between proximity to green space and above-average property values. In New York City, iconic Central Park continues to push values skyward, particularly along Fifth Avenue on the park’s eastern border and along Central Park West on the other side.

Apartment buildings overlooking the park, such as The Dakota, have taken on almost mythical status for New Yorkers. And the city’s most talked-about new buildings – such as One57, which rises a staggering 90 storeys – all offer views of the park. Several apartments at the recently completed One57 have fetched in excess of US$50 million.

Experts say green space will be a driver of high prices in the Sydney CBD, too. “As Sydney moves inexorably towards becoming a high-density city, being close to green space is becoming more important – and more valuable,” says Dr Andrew Wilson, chief economist for the Domain group.

“Proximity to substantial green space has always commanded a premium and that effect will only increase as we transition to higher-density living,” he adds.

That transition is already well under way. According to the latest census figures, the CBD added almost 5000 residents between 2011 and 2016 and now houses more than 27,000 people. New services and infrastructure such as the light rail and Sydney Metro are taking shape, making CBD living more convenient and appealing than ever.

As the CBD welcomes more residents, Hyde Park will become increasingly important, say academics. “Research has shown that green space in urban areas helps to improve air quality and reduces heat build-up,” says Bronwyn Cumbo, who is part of the Institute for Sustainable Futures at the University of Technology, Sydney.

“And, of course, proximate, safe and engaging ‘natural’ areas provide valuable play places for children.”

Cumbo and her colleagues expect Hyde Park to become the default meeting place for many Sydneysiders, not only because of the health benefits the green space will offer but also because of the park’s proximity to Town Hall, where the light rail, Sydney Metro and current Sydney Rail network will all eventually meet.

And for those who live in the blocks surrounding the park, it will be a significant boost to quality of life, according to experts. “Many studies have shown that living in close proximity to green space entices people to get out and do exercise,” says Tonia Gray, an associate professor at the University of Western Sydney who is also part of the 202020 Vision green-space campaign. “The benefits for health and wellbeing, and also stress reduction, are huge.”

Overlooking a park and being able to access it offers benefits that even the most well-appointed gym can’t replicate, says Gray, who cites the “biophilia” concept. “The theory is that we’re all attuned to nature,” she explains, “so if you hear birdsong, or see green vegetation, that helps you come back to a natural rhythm. Nature has a cathartic and soothing effect on us.”

Developers are wise to Hyde Park’s potential and are currently eyeing nearby locations for future residential developments. But, as Dr Wilson explains, “The buildings around Hyde Park are very tightly held.” That means demand is likely to outstrip supply for the foreseeable future.

One notable development taking shape is 203 Castlereagh Street, which will comprise an MGallery five-star hotel and, above it, a residential tower being marketed by CBRE called Castle Residences. The building, designed by Candalepas Architects and interior-decorated by Studio Aria, offers sweeping views across Hyde Park.

“You walk out your front door and within 100 metres you’re in the park,” says David Milton, managing director of CBRE. “The convenience really cannot be overstated.”

Milton says strong interest in Castle Residences from local and overseas buyers is being driven by its proximity to the park. “One of the reasons Sydney is so popular with overseas investors is because it’s such a beautiful city with the parks and the harbour,” he says.

“Investors recognise the value in purchasing near one of those locations.”

The Castle Residences apartments have top-of-the-line fixtures and fittings by Miele, Gaggenau and others plus an abundance of white oak and bronze. Residents will also have access to all the services of the MGallery hotel below, including housekeeping, concierge and in-apartment dining.

Each apartment features scalloped windows with unimpeded views of the park and lushly landscaped balconies to create a sense of connection with the green space beyond.

“Right now, Hyde Park really comes alive on weekends or during festivals,” says Milton. “But within a few years, it will be the soul of the city seven days a week.”