A new study indicates that the presence of public transit systems and infrastructure has a highly beneficial impact on the property prices of adjacent areas.
A new report released by real estate company Knight Frank indicates that the presence of transportation infrastructure and public transportation systems generally has a highly salutary effect upon property values in surrounding areas.
According to the report, entitled Transport Infrastructure and Residential Hotspots, the introduction of mass transit systems in countries throughout the Asia Pacific more often than not results in a rise in adjacent property prices, as well as the creation of popular new residential markets.
“Changes in infrastructure – new transport corridors and metro systems – can stimulate and open up parts of a city, attract investment, extra demand for housing and bring new energy to areas,” said the report’s authors.
The report points out that although the introduction of mass transit systems to an area can have adverse impacts in the form of increased noise pollution and traffic, these drawbacks are generally outweighed by reductions in travel times and heightened access to other areas.
“While new transport infrastructure does not have a universally positive impact on residential pricing (indeed there are some negative externalities associated with infrastructure such as noise), we commonly witness outperformance and new residential hotspots emerge, as access improves and travel times around the city are reduced,” said the report.
In China, the introduction of new metro lines provides a stunning boost to surrounding property prices. The construction of Beijing’s Line 7, which runs along an east-west axis through the centre of the city, is expected to lift housing prices by more than 20 per cent in the area around Wufang Bridge and Huagong Bridge along the 5th ring road.
Patterns throughout the Asia-Pacific region in general are replicated within the Australian property market, as proved by the impact on surrounding home prices of the introduction of a new extension to Sydney’s light rail network.
Apartment prices in the suburbs of Leichhardt, Haberfield, Summer Hill and Dulwich Hill enjoyed rates of capital growth of 3.6 per cent on average in the three months prior to the opening of the light rail extension – a figure significantly ahead of the city-wide average of 2.3 per cent during the same period.