Does a Heritage Overlay Devalue Property in Melbourne?

If you’ve been searching for a home in Melbourne, or you already own one, you may have come across a property with a heritage overlay. And like many homeowners, you might be wondering:

“Will a heritage overlay reduce my property’s value?”

It’s a fair question. Heritage controls can sound restrictive, but the reality is far more nuanced. In fact, for many properties, a heritage overlay can protect and even boost value, if you know how to work with it.

In this article, we’ll break down exactly what a heritage overlay is, how it affects property prices in Melbourne, and what you need to know before buying or renovating a heritage home.

What Is a Heritage Overlay in Melbourne?

A heritage overlay is a planning control applied by local councils to protect buildings, streetscapes, or areas with historical and cultural significance.

It doesn’t mean you can’t renovate your home. It simply means that certain works, especially external changes, will require a planning permit to ensure they respect the heritage character of the building or area.

Do Heritage Overlays Reduce Property Value?

The common assumption is that a heritage overlay will deter buyers or make renovations too difficult. While there are some additional steps to navigate, heritage controls do not automatically devalue property.

In fact, research in Melbourne’s property market shows heritage-listed homes often hold or exceed market value, particularly in high-demand suburbs where historic architecture is part of the area’s appeal.

Why a Heritage Overlay Can Maintain or Increase Value

1. Architectural character - Many buyers actively seek out period homes with original features such as ornate plasterwork, fireplaces, leadlight windows, and timber floors.

2. Desirable streetscapes - Heritage precincts often feature consistent, beautiful streetscapes that appeal to buyers and add to neighbourhood charm.

3. Limited supply drives demand - You can’t build another 1880s terrace from scratch. Their scarcity protects long-term value.

4. The best of both worlds - Modernising the interior for comfort while retaining period details can make a heritage property both functional and deeply appealing.

   
   

Considerations for Homeowners

While the benefits are clear, there are practical factors to keep in mind if your Melbourne property is in a heritage overlay:

• Renovations require more detailed planning and design.

• Most external works need a planning permit.

• Approval processes can take extra time.

• Some buyers prefer properties without restrictions.

Working with an architect experienced in heritage homes, can help you navigate these challenges while making the most of your property’s potential.

Heritage Overlay Property Values: The Data

Multiple studies and sales data show that homes in heritage overlays in Melbourne, consistently achieve strong results.

Buyers often see heritage protections as an assurance that the neighbourhood’s charm won’t be compromised by unsympathetic developments.

Final Word:

A heritage overlay is less about restriction and more about preserving what makes Melbourne’s suburbs unique. With the right approach, it can be a selling point, not a setback.

If you’re considering buying, selling, or renovating a heritage property in Melbourne, engaging a professional who understands heritage overlay requirements will save you time, stress, and potentially money in the long run.

Need expert help with your heritage renovation?

I’m an architect specialising in heritage restorations and renovations across Melbourne. I help homeowners preserve the beauty of their period homes while making them work for modern life.

Get in touch to discuss your heritage project.