How Do New Developments Affect Property Values?
Australia’s real estate market has seen a boom in recent months, and Queensland is no exception to this. However, when it comes to property values, there are plenty of factors to keep stock of – and one of them has to be the adage of ‘Location, Location, Location’. With this in mind, it’s important to know if and how estates, highways, and other recent or upcoming projects can help, or hinder, your home’s place in such a competitive market.
Highways
Being near a highway might sound like a positive to some, especially for those with a daily commute, but it does pose a challenge – the noise alone can make prices plummet, and the congestion could undo any benefits. There are plenty of ongoing road projects across the whole country, but investors are quick to speculate on the prices, even while these endeavours spend years in the planning stage. Only when the highway is completed can you make a clear conclusion, and by then the price might have already declined.
Public transport
Other transport projects may fare differently, however. In 2019, a study by academics from the University of New South Wales, and the University of Technology Sydney, found that house prices tended to decrease when new rail projects (in their case, the Sydney Northwest Metro) were first announced. They would then increase as the development progressed – in fact, prices actually ended up getting higher the closer a property was to the Metro, so public transport links tend to be more helpful than busy roads.
Location
A nice location can be a double-edged sword, as a higher-density housing development could emerge. In some ways, this could be good for growth as other companies might also move there and bring convenience to the area. That being said, not everyone has years to wait for the shops and businesses to arrive and boost their prices, and if this doesn’t materialise, you might end up seeing a loss. It has been suggested that these new developments move in tandem with the market and stay relatively stable – as with many of these instances, it’s down to the specifics.
Resumption
Another factor to bear in mind is compulsory land acquisition, or resumption, where the government acquires a section of land for public purposes, usually to help build any of the aforementioned projects. They negotiate this with the land-owner and can provide compensation, but as with any financial negotiation, there is always a risk of not getting a good deal. Compounding this, they might only get part of your land – such as your garage, or your driveway – which can drive prices down for the property, and leave you unable to do any renovations that could help raise them.
The world of real estate might be a tricky one to navigate, and the rate at which new projects are constantly arising and impacting the market can be disorienting; this might only increase in the coming years given the recent economic boom. However, at Peterson Property Valuations, you can be sure you’re getting an accurate assessment and a good deal, whether you’re contending with a nearby highway, a planned housing estate, an impending resumption, or anything you believe might hurt your place on the market.
