There is a significant correlation between infrastructure development and growing property prices. This is due to the multiple benefits that arise out of infrastructure development. An improvement to an area’s train line, roads or bus services can increase property values due to the ease of travelling in the area. A large infrastructure project can create thousands of jobs, increasing competition and investment into the local property market. Infrastructure development can also revitalise an area previously seen as uncultured or undesirable. Below are some things to look out for, and examples of infrastructure projects that are growing NSW property prices.
What to look out for with Infrastructure Projects and Growing Property Prices:
Ensure that the infrastructure can grow property prices sustainably
Infrastructure projects need to create lasting value for property prices to follow. Whilst a new motorway may be helpful for transportation to an area, it will not create lasting employment following the completion of the project. Comparatively, the construction of an airport or a hospital will create sustained job creation and investment into the local area. This is an important point to keep in mind if you are looking to invest in an undesirable area that requires local investment and development to increase property prices.
Ensure that the project is more than a proposal
Local property prices tend to jump when new infrastructure projects are announced. It is important to not make any rash property investment decisions at this stage, as proposals are often subject to change. Areas affected by this proposal may change, and funding may be increased or reduced.
Look at changes to zoning
Changes to zoning may have positive or adverse effects on property prices in an area. If an area becomes rezoned for commercial purposes, such as the construction of a shopping centre, houses in the immediate proximity may have their value significantly reduced due to noise and disruption. Conversely, properties on the fringe of this new commercial zoning may increase in value due to the added convenience of it being in close proximity to the shops, but not so close that it disrupts the living situation.
Look at whether the local area is subject to overdevelopment
Overdevelopment of infrastructure in certain areas can adversely affect property values. It can create an oversupply of property options and can also create traffic congestion, both diminishing property prices. When looking getting the best return on property investing, suburbs that are up and coming, and have not yet hit a critical point of overdevelopment will most likely give the best results.
Infrastructure Projects growing Property Prices in Sydney
Western Sydney Airport
The Western Sydney Airport is currently under construction in Badgery’s Creek, and is planned to receive $5.3 billion to be constructed. It is also expected to create 28,000 local jobs in the economy by 2031. This project will likely increase surrounding property prices due to workers looking to live closer to the airport, and investors looking to capitalise on this.
Parramatta Light Rail
The $2.4 billion Parramatta Light Rail Project is aimed at connecting the Parramatta CBD to various key locations in the Parramatta area. It is estimated that 128,000 people will live within walking distance of these light rail stops, and that 28,000 people will use this light rail everyday. This will not only increase investment into the local property market, but it will also increase spending in the Parramatta CBD for both work and recreational purposes. This will likely bring more culture and uniqueness into the area, adding to property prices.
Infrastructure Projects growing Property Prices in Newcastle
Honeysuckle University Campus
Being funded by both the University of Newcastle and the NSW Government, this new city campus is planned to inject $23 million into the local economy and create upwards of 700 new jobs. This project will act as a Creative Hub, and will facilitate digital research and investment. This boost to the local area will likely cause investment into surrounding suburbs to increase, especially those in proximity to light rail and train and bus stops.
The New Maitland hospital is a $450 million project aimed at addressing health problems in the region now and into the future. It is set to open its doors by 2022. Its construction alone has seen 1250 construction jobs be created, with thousands of ongoing roles expected to b available following its completion. This hospital will inject money into Maitland’s local economy by improving access to health services for those who live locally, with property prices likely to follow.
Looking to Start Investing?
You can find a list of these infrastructure projects at www.infrastructure.nsw.gov.au/projects-nsw/
Vision Property and Finance is available for a free consultation on how to best utilise these development projects for your financial benefit. You can get in contact with us here. Alternatively, you can check out more of Vision’s articles on property investment here.
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