New Perth infrastructure not always silver bullet for instant property price growth: report

New Perth infrastructure not always silver bullet for instant property price growth: report

PERTH’S big-ticket, government-funded infrastructure projects won’t necessarily bolster local house values, a leading property investment consultancy’s new report warns investors.

Examining how 14 major developments might impact local property markets, Momentum Wealth’s Public Infrastructure Update researchers said public spending could lead to pressure on property prices through increased amenity, higher economic activity and greater demand.

However, it was too simplistic to assume projects would significantly boost prices when the capital growth might only be at market rate.

Focussing on sports projects, Momentum Wealth managing director Damian Collins said the construction of large-scale football stadiums, such as the $1.2 billion Perth Stadium, typically delivered negligible price growth for nearby residential properties.

Smaller projects, including the $24 million Arena upgrade in Joondalup and $20 million Lathlain Park redevelopment, could prove more beneficial for property investors.

“These types of community projects can deliver better capital growth prospects because they’re more likely to bring tangible benefits to the area, such as additional amenity and upgraded streetscapes,” Mr Collins said.

The report also highlighted less-obvious locations likely to gain from new infrastructure.

While the $49 million Ellenbrook Rapid Bus Transit System would benefit residents on Perth’s north-east urban fringe through improved accessibility, the 9km continuous connection for buses between Ellenbrook Town Centre and Marshall Road would also help support Morley in Perth’s inner-metropolitan ring.

“The research report explains that Morley represents a much smarter investment location because it’s significantly closer to the Perth CBD, the supply-side fundamentals are more favourable and it has been identified by the state government as a key suburban activity centre,” Mr Collins said.

It was imperative to take a broader view when making investment decisions.

“While new public infrastructure projects can be a good indicator for future residential property price growth, investors need to be aware that they’re not necessarily a silver bullet for instant price growth.” Mr Collins said.

“Other property price drivers, such as housing demand and supply, demographic shifts, private investment and changing structure plans, for example, also need to be taken into account when buying an investment property.”

$261.4m Mitchell Freeway north extension

Expected completion: Mid 2017

Report researchers said the extension from Burns Beach Road in Joondalup to Hester Avenue in Clarkson would help support businesses and residents in Perth’s far north suburbs, as well as ease congestion on local roads, particularly in Kinross and Currambine.

“Residential demand is likely to increase off the back of reduced congestion on local roads and improved commuting times.”

$24m Arena upgrade

Expected completion: Late 2017

Properties in the immediate vicinity of the project might receive enhanced streetscapes and additional amenities, which could create more demand for housing in these pockets, researchers said.

But it won’t necessarily deliver an immediate uplift in property values because markets were generally rerated over time as other improvements or upgrades in the area took place.