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Following a Sydney double murder house going under the hammer last month, new research shows that murders can adversely affect the values of neighbouring properties.
Two researchers at UTS have spent months trawling through property records and concluded that a stigma is often attached to the area where the murder takes place, although it does disappear over time.
Under the material fact law, real estate agents are legally obligated to disclose such information to prospective buyers, even if it affects the price of the property.
The researchers, Adrian Lee and Anastasia Klimova, found that not only do murder houses get the cold shoulder from buyers, nearby properties also fall in value.
"We know that a murder will affect the house in which it occurs but no one had done any research on how it affects property prices within the local vicinity," Dr Lee, a postdoctoral research fellow at the UTS Business School, told UTS magazine Brink, which appears in the Sydney Morning Herald.
The researchers said they spent months reviewing court reports about murders and revisiting media accounts of some of the more notorious killings in Sydney.
The research showed that house prices fall by 3.9 per cent for homes within 320 metres of a murder, with less of a drop in the second year after a murder. Rents, however, are not affected at all.
Within 160 metres it doesn't seem to matter how close a property is to a house where a murder has been committed: prices fall by the same amount, while intense and prolonged media coverage does not seem to matter either, the researchers said.
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