Sydney’s Light Rail a Major Boon for Nearby Property 1

By
Tuesday, February 9th, 2016
liked this article
Embed
advertisement
construction
FavoriteLoadingsave article

The development of the long-awaited light rail project in Sydney is already reaping dividends for the property sector, with developers reporting heightened interest in projects situated within close proximity of the new transit line.

David Butt, executive director of Sydney-based developer and real estate firm Greencliff, said clients have made explicit their heightened interest in projects that are affected by the new light rail line – in particular those situated in the CBD and the inner west.

“We’re experiencing strong sales in Lumiere – a high-rise high-end development at Town Hall, in specific relation to changes that are taking place on George Street involving the light rail,” he said. “We’re experiencing similar strong interest in a development of ours in Dulwich Hill called Dulwich Green. And again, people are referencing the light rail as one of the draw cards for that development that gives them other transport options.”

According to Butt, the new line will enhance development options in Sydney’s inner western suburbs.

“It will have an especially strong impact on those inner ring, inner west suburbs that have always been ripe (but) might have in the past suffered from a transport shortage,” he said. “It gives residents other transport options and makes it more convenient to access the city.

“Interestingly, our development in the city is starting to experience some new interest because there’s going to be a pedestrianized street through George St, but this again is linked to the light rail project.”

The impact of the light rail line upon adjacent real estate developments serves to highlight the importance of transportation infrastructure for the property market.

“We see transport infrastructure as being integral to investment decisions,” said Butt. “It’s perhaps as important to a purchasing decision as things like being nearby schools or parkland.

“Transportation infrastructure has typically underpinned bursts of value growth of between ten to twenty per cent in just a couple of years for certain suburbs in Sydney.”

Embed
FavoriteLoadingsave article

Comments

 characters available
*Please refer to our comment policy before submitting
Discussions
1
  1. Rick Rybeck

    Infrastructure, like transit, is very important to cities. When infrastructure is well-designed and well-executed, well-served sites go up in value. This publicly-created land value often ends up as a windfall to a few who are lucky enough to own the best-served land. Opportunities for such windfalls provide the fuel for land speculation. People buy land for the purpose of selling it later at a higher price. This can become a self-fulfilling prophecy. The more people who buy land for future sale, the less land is available for immediate development. This artificial scarcity causes land prices to rise and encourages even more speculation. Eventually, speculators raise prices so high that residents and businesses cannot afford it. At that point, a real estate bubble is created. Speculators buy and sell from one another until the bubble collapses, dragging the rest of the economy along with it.

    Taxpayers, who pay for transit stations through their taxes, must pay for it again in higher rent if they want to locate their homes or shops nearby. The land near the station is more valuable. But that rent premium should go to the transit authority, not to land speculators. Value capture techniques that return publicly-created land values to the public authorities that create them can make infrastructure self-financing while discouraging parasitic speculation.