One of the more interesting parts of my job is to keep up with real estate trends, not just locally or nationally, but globally. Sometimes these trends reach ‘down under’ sometimes they are not appropriate for our climate or culture but it is always worthwhile to see what is happening in the world of real estate.
Recently I came across the Bilbao effect, which is the term used to describe the way in which suburbs and neighbourhoods have been revitalised when a museum or art gallery has been opened in the area. The effect is named after Bilbao, Spain, where the Guggenheim museum was built in 1997. The opening of this museum became a catalyst for a revitalization of the northern Spanish city, which among other awards, received the 2018 Best European City.
The Bilbao effect can lead to improved real estate values for a number of reasons. If the museum building itself is distinctive enough, it can attract home buyers for the view. It can also attract those interested in the exhibits, which in modern museums tend to be rotated with regularity and can also include guest lecturers or other activities that complement the exhibit.
More than this, however, a museum can also attract tourists, which in turn leads to the development of cafés, restaurants and hotels. With these types of facilities often comes development of transport routes to ensure quick access to stations or airports. Generally, retail will also develop as more people are coming into the area. All this leads to the area becoming more attractive for buyers.
While the article didn’t include any information specific to Australia (the focus was American and Canadian), I couldn’t help thinking of the way in which MONA in Hobart has created a very distinctive ‘flavour’ to Tasmanian tourism and certainly property prices around Hobart have seen growth in the last ten years.