Among the secrets to effective long-term property investment is recognising the elements that produce demand in the Australian residential property market, and then utilizing this information to produce greater levels of capital growth. Specifically, valuing the effect that have on housing demand, and their impact on long-term investment opportunities, should as a result play a role in any investment strategies you go after.
So – what is infrastructure?
Buying houses for Investment purposes provides the possibility of capital growth to boost your wealth in addition to the rental returns. Land increases in worth, whereas properties depreciate, so generally residential properties with more land are well positioned for this capital growth.
Here are the main three categories of infrastructure:
- Utilities: electricity, gas, communications and water
- Transport: train stations, freeways, roads, airports etc.
- Social: schools, hospitals, shopping centres, dining opportunities
Why are infrastructure projects essential to capital growth?
Infrastructure projects (both underway and in progress) are crucial indicators regarding where increased residential property demand can be anticipated.
New transportation links, an expanding choice of educational facilities, or the introduction of health services all add to the demand for housing, as this is the sort of social infrastructure that attracts families to come and live in any location.
The growth of infrastructure can be seen to increase employment and stimulate economic growth in a range of ways. In simple terms, people are increasingly attracted to areas where community facilities are being developed, and this generally results in higher house prices and increased potential for long-term capital growth, as demand is likely to remain consistent in the future.
When creating a plan for property investment, it makes good sense to discover current and planned infrastructure in locations where you are considering purchasing an investment property. In this way, you can be relatively positive that you will be able to find tenants, and then when the time comes to sell, the value of the property will have increased nicely over time.
What infrastructure can help drive capital growth and increase your overall wealth.
You’ll observe that properties generally get more expensive as you move closer to a CBD or city. A key reason for this is cities are large employment hubs.
There is a demand to live near to work, if an area has easy and quick access to employment this can have a big impact on residential property prices.
Don’t just think about CBDs, there are also other employment hubs such as hospitals, universities, large shopping centres and airports. In our area the Prince Charles Hospital, and the westfield Shopping centre are major employment hubs.
Good roads reduce travel time and improve traffic conditions. Freeways and highways can help you get from A to B in a shorter period of time.
The Stafford Rd – South Pine Rd intersection improvements is an example of this. As is the new proposed improvements to the Bruce highway.
As traffic gets worse and worse, public transport has become the preferred mode of transport for many. Trains make it easy to get around and reduce the need for a car. This can have a positive impact on property prices.
There are 6 new train Stations around the City being built right now, the tunnel that leads to the Clem 7, and the new City Metro are all examples of public transport improvements.
Also the North west corridor (if it is built) will have a massive impact on our local suburbs.
Parks, Sporting Venues & Outdoor Spaces
Parks, sporting venues, gyms and outdoor spaces help boost the liveability of a suburb and creates a sense of community. Nearby access to these can have a positive impact on a property.
We are fortunate to be so close to so much parkland and also the local bike paths.
Hospitals average thousands of visitors a year and are huge employment hubs. The Healthcare Sector contributes over 10% of Australia’s GDP. Hospitals are a positive driver for capital growth as they generate demand for residential property.
The North West Hospital is constantly undergoing upgrades and the Prince Charles Hospital, and Royal Brisbane Hospitals are all close by.
Universities are also large employers with a big population.
It’s desirable for students & teachers to live close by. This demand for property in close proximity can help property prices and also lower rental vacancy rates.
The new campus at Petrie has had a massive impact on the property market in neighbouring suburbs
School zones are important. Good quality schools are in high demand these days and families will do what they can to live in a school zone of their choice. Parents also don’t want to travel far to drop off their children, so the demand to live close by can play a part in the desirability of certain properties.
The McDowall State School is a highly desire school and people are always wanting to purchase in this school zone.
Entertainment & Shopping
Who doesn’t like a good coffee? We all want to live close to the shops and restaurants.
It’s an advantage to be near local shops and this is something renters and homeowners generally enjoy.
Prior to buying an investment property based on the above. You need to factor in a whole range of other drivers for property growth. Being close to a good school, shops or the beach alone won’t automatically lock your investment property in for outstanding long term growth. However if you acquire a property that is in close proximity to most of this infrastructure, you are setting yourself up for success. Remember it’s not just about the investment property, it’s likewise about the suburb as well as the infrastructure around the property.
Infrastructure is a key ingredient for your property investing success. That is why location is SO important., and understanding what new infrastructure is coming.