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A hot topic that has gotten people talking lately centres on the proposition that high Internet speed or more specifically Fibre Internet, increases property value.
When Google launched its gigabit Fibre service in July 2012, Google Access General Manager announced that a direct Fibre Optic connection to a home will improve the home value by between USD2,000-USD5,000. A recent study by Wichita State University noted that “Kansas City housing market is clearly on the rebound” and that home values were expected to rise 2.7 percent in 2014, roughly a year after Google Fibre came to the city.
Verizon (USA) on its website cited a 2008 study conducted by Park Associates: Multi-Dwelling Units (MDUs) residents estimated the rental value of standard (2-bedroom, 2-bath, 1,000 square foot) apartment offering Verizon Fios Fibre Internet to be an average of 5 per cent more per month than one offering DSL/satellite/cable services.
his study supports academic researcher Gabor Molnar from University of Colorado, whose 2013 study found that “…The presence of fibre-based broadband was associated with a positive effect on property values in the neighbourhood… Fibre availability may drive real estate prices upwards…”
There has been an explosion of demand for Fibre Internet in recent years. For instance over 1100 cities in the US are in line with requests that Google introduce Google Fibre in their municipalities. Cities that fail to get picked for Google Fibre are looking for ways to either build it themselves or partner with someone who will do it for them. “It’s getting to the point where, if my neighbouring community has a gig and we’re still doing satellite, the property value in that town is going to go up,” – Deb Socia, director of Next Century Cities a coalition of cities working to provide Gigabit Internet services to their residents.
In the UK, broadband speed is now regarded as the “fourth utility” after gas, water and electricity, said BBC property expert Henry Pryor. “I was involved with a survey that looked at the impact of broadband speed on people looking to buy or rent and the potential impact on prices and we found a home without at least a standard broadband connection could be worth up to 20 per cent less than a comparable property,” Mr Pryor said. “A property needs 21st century connectivity. More people are making decisions to work from home full time or even part of the time. More demanding buyers now want Fibre-Optic superfast speeds for things like streaming entertainment and managing a host of equipment that relies on this.”
According to a study of British homebuyers, a good broadband connection now tops off street parking and access to local amenities as one of the vital deciding factors for people buying a new house. The study also found that one in ten buyers have walked away from properties with poor internet connection and that broadband is connected even before gas. Home owners in London are also willing to pay up to 8 per cent above the market price for properties in areas offering very fast internet speeds. Statistics compiled over a 15-year period, from 1995-2010, show that property prices across the UK increase on average by about 3 per cent when internet speed doubles.