"The word on everyone's lips recently has been 'Metro'," says Adrian Tsavalas, with homeowners and buyers alike wondering how the value of properties around the new lines will be affected.
With 15.5km of new lines and five new stations, the Sydney Metro aims to ease congestion in the city centre and increase connectivity to the inner west and outer suburbs, but what does this mean for property prices?
Data from CBRE and PropTrack show that suburbs along the existing metro lines have experienced a 49% increase in capital value over the past decade, outperforming neighbouring suburbs by an average of 5%. However, REA Group Property Economist Anne Flaherty says this premium can reach up to 20% in less connected areas, as seen in suburbs like Castle Hill when the northwest line opened in 2019.
Neighbouring suburbs, which offer very similar lifestyle amenities, haven’t experienced the same rate of capital growth, showing that “-the addition of a train station makes a suburb much more desirable to live in, and people are willing to pay a lot more,” according to Anne Flaherty in an interview with CBRE.
This is particularly pertinent to areas like Campsie, which will have a train to the city centre every 4 minutes at peak hours, easing congestion and reducing the commute time. The addition of this new line, along with the fact that it’s currently the cheapest suburb to buy property within 10km of the CBD, according to Domain, makes it a particularly appealing investment opportunity for inner-west buyers.
This isn’t a new phenomenon or metro-specific; Adrian Tsavalas explains, “In recent years, there was immediate growth in Dulwich Hill when the light rail was rolled out.” The 2014 Sydney Transit and Urban Renewal Value Creation Report by LUTI Consulting noted an average 6.7% uplift in the value of properties within 400m of the Dulwich Hill Light Rail extension.
For those with properties close to the new metro lines, depending on the proximity to a station and the CBD, a similar uplift is likely in coming years. It also presents the opportunity to invest in suburbs along the Sydenham to Bankstown line, which is set to be completed this year.
For buyers, the increased connectivity of the inner west presents an attractive opportunity, especially for those priced out of the inner city and the eastern suburbs. Areas with lots of infrastructure are typically either growing or primed for growth, and we expect to see an increase in demand in these suburbs, especially from younger buyers, who are typically the primary demographic for the kinds of high-density developments that tend to pop up near stations.
As Adrian Tsavalas says, “With Sydenham and other stations to follow, there’s a greater focus on securing quality homes near public transport,” so we also expect to see an increase in the number of growing families and downsizers buying up freestanding and terrace homes in these suburbs.
With four metro lines, 46 stations, and 113km of new rail slated for development by 2030, we expect to see a flurry of activity from sellers and buyers alike in the inner west and southwestern suburbs. This presents a fantastic opportunity for everyone, from first-homebuyers to investors, to purchase in suburbs that are expected to appreciate at a higher rate than neighbouring towns.
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