Trains, trams and property prices
When looking for somewhere to live, realestate.com.au’s most recent Property Seeker Survey shows that public transport is one of the most important factors.
For buyers, it comes after “all round good neighbourhood” and “access to supermarket/shops”. For renters, given that they are generally younger and less likely to own a car, it is perhaps not surprising that it comes in second after “access to supermarket/shops”.
Being well connected via public transport is very important to Australians. Picture: David Crosling
For most people looking to buy or rent, being near public transport is seen as either critical or important.
While buyers and renters see public transport as important, working out the impact on pricing is more complicated. At a high level, it is difficult to separate what the main driver of price growth is.
For example, a major public transport announcement may be made at the same time access to finance is loosened. Prices going up may have more to do with easy finance than a new train station.
In Parramatta right now, we are seeing the highest level of views on realestate.com.au since 2015 – this would be partly due to the fact that the Sydney market is recovering, but also because there has been a new rail project announced that will shorten travel times to the Sydney CBD to 20 minutes. It is hard to untangle which would have the biggest impact.
Construction on Sydney’s light rail project. Picture: Getty
Nevertheless, most in-depth academic studies suggest that public transport projects generally lead to better price growth. This would make sense given our own research into the importance placed on public transport.
Right now, Australia is awash with new transport projects. In Melbourne, the Metro Rail project will add five new train stations to inner Melbourne. It will become a lot easier to access Parkville, North Melbourne and St Kilda Road.
Sydney’s light rail construction may have caused havoc for commuters, but for places like Surry Hills, Kensington and Randwick, it will make it quicker to move around.
Brisbane Metro will provide dedicated bus lanes, allowing for high frequency, faster bus services around the city.
Beyond capital cities, fast rail also has the potential to significantly open up regional cities. Funding for a fast rail project from the Melbourne CBD to Geelong was announced in the 2019 Federal Budget, which would reduce travel times to half an hour.
For most people looking to buy or rent, being near public transport is seen as either critical or important. Picture: Getty
Business cases were also announced for routes such as Sydney to Newcastle and Brisbane to the Gold Coast. These fast trains would make for shorter commutes to many regional cities and make living in them far easier.
With economic growth currently low, there has been a lot of focus on how to get it moving again. While a lot of discussion has centred around monetary policy, spending more on major transport projects is another way to grow the economy.
For those suburbs that are key beneficiaries, better price growth may not be necessarily assured, but for most buyers and renters, a new train station, bus route or tram stop will make that suburb much more attractive.
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