The importance of infrastructure projects for capital growth
Transport infrastructure is an important factor for property investors to consider. But what type of projects typically influence property prices?
Infrastructure developments typically generate demand for housing and can cause price rises in adjacent suburbs. Sometimes the benefit to an area is obvious, other times only the truly astute investors will realise the flow-on effects.
The value of a locality is based on many things: its proximity to employment centres and amenities is an important factor, as is the beauty and safety of the area. If new transport infrastructure is set to improve upon these factors, it is possible the area will receive a boost in value.
New infrastructure can include public transport as well as major connecting roads. By interconnecting suburbs people’s perception of distance changes. For instance, if a new road cuts travel time to the city, this might make the suburb much more attractive for commuters.
The infrastructure projects with the biggest impact are typically projects involving the rail network, new major roads, or significant improvements to existing roads. All these projects have the potential to impact on property values.
If an existing rail line is extended, this can certainly improve the value of outlying suburbs that then no longer have to solely rely on buses and roads.
While new roads can make an area more accessible, the widening of roads can impact areas by reducing congestion and reducing travel times. Reconfiguring of roads and new bridges can also make a significant change.
For property investors, it is key to research and keep track of upcoming projects, because the best time to buy in an area is right before they receive the full benefit of the projects, when prices haven’t had a chance to move upwards yet.
Luckily, the Government plans most of these projects well in advance and the planning documents are typically available to the public. But investors should also keep an ear out for new announcements particularly around election time.
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