What’s Driving Property Values?

Source: Gilbert Parker via Flickr

The social values and habits of Australian home buyers are changing. Struggling to manage the ever difficult balance between work and social life, Australians are recognising the importance of a home’s proximity and accessibility to work, schools and transport.

Buying habits are evolving and over the next year or two individual property performances will largely depend on relative affordability and access to transport infrastructure and amenities. Although transport access has always been one of the key factors underlying high demand locations, its importance is increasing due to the rapid expansion of car-dependent suburban estates and a growing infrastructure deficit.

For 40 years, Victorian governments have managed population growth primarily by expanding outer suburbs, however they have under-invested in public transport and arterial roads. In the last five years, this strategy means new suburbs and road systems have been forced to cope with an additional 400,000 people in Melbourne alone. The result is a poorly integrated transport system and fast increasing traffic loads on major road systems.

Transport’s importance as a key determinant of location demand is likely to emerge as the pre-eminent driver of property location in the future. This factor will be accelerated by urban fringe development and any rise in Australian retail petrol prices. For the shrewd investor or homebuyer who understands the current market and is skilled in selecting property, the coming years should prove to be a time of great opportunity. Unfortunately they are also likely to prove risky for the uninformed purchaser.