Does Proximity to Railway Stations Increase Property Values?
Eliza Owen writes an incisive piece for the website Property Update, wherein she asks if infrastructure is the bedrock which supports property values and raises them. Sydney is all set to be flooded with railway tracks spread across its length and breath. Come 2019, light rail will run through Chatswood and Eastern Suburbs.
Suburbs with railway station/suburbs without them
The first significant statistic that Owen shares is that suburbs with railway stations do better than those without them. Because of their ability to provide easy and cheap transport, they are the more favoured mode of transport for commuters and it is no surprise that railways work wonders for the capital growth of the regions they stretch through. Owen gives the example of Blacktown Council where those suburbs with access to railway transport have 3.7% higher median prices.
Distance from the station
The second inference that Owen draws is that the price of properties are not shaken by distance from the railway stations. In other words, a property lying a kilometre from the station does not necessarily mean it will register better capital growth than another lying five kilometres away. The line of reasoning is pretty simple: One kilometre or five, your location will be considered fairly adept in terms of railway transport.
Of course, too much proximity to railway stations, contests Owen, can also be a nuisance. One, it can breed crime, with trains being an easy getaway for criminals and two, the noise element can be nauseating at times.
Demographics determining prices irrespective of distance
The dynamics of distance and the way it determines capital growth rates change when demographics come into the picture. Take for instance a place like Lidcombe with a teeming population of youth. These are people readily attracted by the café culture of the CBD area of Sydney, hence, Sydney-like transport gets top billing for them. After all, the percentage of young professionals is way too high in Lidcombe and thus the areas closest in proximity to train stations are registering highest growth.
You can read the original article here.
Gentrification trend is a reliable barometer, too
In my view, demographics and the trend towards gentrification has a lot of bearing on how transport (infrastructure) drives price of properties in a given suburb. In this respect, I echo Owen’s opinion. It is not “distance from the closest railway station” which happens to be a factor, but the kind of people inhabiting those areas.
For a middle-aged couple, lazing around townspeople or merchants then ‘1 kilometre’ or ‘5 kilometre’ may not make much of a difference, but when we talk about young professionals looking to make their mark on life and commuting to the CBD area everyday, each kilometre counts. It really does.