The effects of criminal behaviour do not only affect the victims but there are some indirect effects that society will feel. Some of the secondary effects might be challenging to verify, but they are still felt. This article will look at how high crime rates will affect property value.
Since purchasing property is a significant financial investment, people want to make a good decision. However, people avoid dangerous areas, preferring to move to neighbourhoods with less criminal activity. There is also the idea that when you buy a property, it will always accumulate in value and that when you want to sell it, you will be able to do that at a higher price compared to the price you paid for it.
However, some issues will play a role in supply and demand in the real estate market that will affect the price growth and property value. The first factor that influences property value includes aspects such as the house being well taken care of as homes that are neglected and show poor maintenance will be less appealing to buyers.
The second factor that affects property value is crime, as high crime rates negatively impact property value. A strong correlation has been noted with areas with neighbourhoods with high crime rates and their property value. In areas where there were higher crime rates, there were high inflation rates. This indicates that high crime can lead to lower property value, which can be due to the ‘bad reputation effect’. Some findings indicated that certain types of crime would lead to lower property value, which are all violent, such as aggravated assault cases. However, the impact of crime rates is not that significant. In one area that experienced a 10% decrease in murder rates, there was only a 0.83% increase in the property value for the area the following year.
Urban areas tend to experience higher levels of non-violent crimes such as car theft and theft of goods. These types of crime, however, do not negatively affect the value of the properties. Properties that show that they aim to reduce crime through investing in top-end security features tend to have higher value, such as estates, as they have shown to have a more significant return on investment long term.
Crime will play an essential factor in a property’s value, and homebuyers should keep this in mind when shopping for their dream home. There are some ways that indicate whether the area has high crime levels, and this includes:
- You can speak to the present homeowners in the area as they will give you an idea about whether they are happy in their neighbourhood. Neighbours are usually the first line of defence when there is any property-related crime. The neighbours will be able to provide you with honest information regarding the area and what you can expect if you are considering living in the area.
- You can also choose to consult with a security company in the area as they spend their time operating in the area. The security company will be able to provide you with valuable information about the neighbourhood, such as the crime statistics and the security plans that they offer in the area.
- Another thing that will indicate the crime rates in the areas is the multiple-use areas that you find in the area. Look out for parks and check that they are correctly maintained and that the residents in the neighbourhood visit these areas. Check to see whether any residents are walking around the area as the higher the foot traffic, the safer the neighbourhood is.
- Try to visit the area during different times of the day as you will be able to see a variety of elements such as traffic and how noisy the area is at other times.
- Lastly, look out for home security systems, the more security features that homes in the area have, the better. Look out for electric fencing, automated security gates, intercoms and CCTV cameras.
When buying a home, safety is something that everyone will consider as you would not want your family to live in a home where there is the constant threat of danger. Therefore, it is crucial to look at the crime rates of an area before choosing to invest. Areas with lower crime rates tend to be more attractive for property buyers allowing property owners to ask for more money.