High-speed rail and regional property prices

The construction of a high-speed railway network with stations in key regional cities on the eastern seaboard could see the value of existing properties there rise by as much as 14 per cent, according to a new report.

House prices in Shepparton, Albury-Wodonga, Newcastle and Wagga Wagga would all rise if a station connected to a high-speed railway were constructed according to analysis by the University of New South Wales’ City Futures Research Centre.

The route is based on the construction of two HSR lines running from Melbourne to Sydney, and Sydney to Brisbane with spur lines to Canberra and the Gold Coast – proposed in a report to the Australian Department of Infrastructure and Transport in 2013.

Price rises were calculated using two sources: the value boost to existing properties from the addition of new infrastructure and the boost to land values near stations based on an expected rezoning.

The report authors calculated achievable sales prices for new detached dwellings around each station by examining the sale prices of dwellings located a comparable travel time from the CBD of each major city by existing rail.

“We expect the values to be a conservative approach to estimation and that the total value uplift could actually be higher,” report co-author Professor Christopher Pettit said.

“This is while still factoring in a profit for the developers after all the external costs, including stamp duty, legal fees and building costs.”

Under a variety of different population growth scenarios, land value for areas surrounding future stations could increase by between $48 billion and $140 billion, according to the report.

“We’ve put together this report for policymakers and decision-makers to explore these growth scenarios and make informed decisions based on big data and analytics,” Professor Pettit said.

Value capture policies could help the HSR project pay for itself, he added.

“If you were to capture a substantial proportion of this value uplift, it could pay for a huge amount of the HSR,” he said.

“You would be looking at tens of billions of dollars just from the residential value uplift alone, without even factoring in commercial, industrial and other beneficiaries.”

– BY REALESTATEVIEW.COM.AU