One of the most essential factors that can make or break a deal with potential buyers and renters is access to public transport, according to a survey by Realestate.com.au.
While the accessibility of a suburb to public transport contributes significantly to the price of a home, its relationship with price growth is actually more complicated than it seems, said REA Group chief economist Nerida Conisbee in a think piece.
"For example, a major public transport announcement may be made at the same time access to finance is loosened. Prices going up may have more to do with easy finance than a new train station," she said.
Conisbee cited Parramatta as an example. In 2015, the city rose as one of the most in-demand regions, and this could be due to two reasons.
During this time, Sydney is undergoing a healthy recovery. At the same time, the demand in Parramatta could have gotten more robust due to the announced rail project.
"It is hard to untangle which would have the biggest impact. Nevertheless, most in-depth academic studies suggest that public transport projects generally lead to better price growth. This would make sense given our own research into the importance placed on public transport," Conisbee said.
Conisbee believes that new transport projects in the pipeline for the next few years will dictate the demand for homes in particular suburbs.
"With economic growth currently low, there has been a lot of focus on how to get it moving again. While a lot of discussion has centred around monetary policy, spending more on major transport projects is another way to grow the economy," she said.
For instance, Melbourne's Metro Rail project, which will extend the line with five new stations to inner-city, will make it easier to access suburbs like Parkville, North Melbourne, and St Kilda Road.
Furthermore, the provision of dedicated bus lanes by Brisbane Metro will allow for faster transport services around the city. And while Sydney's light rail construction will likely cause inconvenience for a time, residents from Surry hills, Kensington, and Randwick will find it quicker to go places when it becomes operational.
"For those suburbs that are key beneficiaries, better price growth may not be necessarily assured, but for most buyers and renters, a new train station, bus route or tram stop will make that suburb much more attractive," Conisbee said.
