After years of under-investment in key infrastructure, Australia's federal and local governments are announcing significant infrastructure projects to support economic growth. But how will this affect property investors?
Infrastructure and Property Prices
Property prices are influenced by a range of factors, including the features of the property itself, government regulations, investor sentiment and - most importantly - location. It is this last factor where infrastructure becomes important. But what do we mean by infrastructure? The term infrastructure can relate to a range of things: roads, bridges, train lines, hospitals etc. A good suburb will have the right mix of infrastructure to make it an attractive place to live. While there's no perfect mix, we recommend suburbs that are set to benefit most from current or planned infrastructure projects as this can be a key driver of price growth.
What is the government doing?
The 2018-19 South Australian State Budget outlined $395 million of funding towards key projects, including an overpass on the North-South Corridor. Her are two examples of significant projects and the reasons that investors should be aware of them:
What is it?
The Darlington Upgrade Project is another important stage in the delivery of Adelaide's North-South Corridor. The aim of this corridor is to create a non-stop motorway from the Southern Expressway to Gawler.
How you can take advantage of it:
The Darlington Upgrade Project will reduce the travel time to Adelaide's CBD from a number of southern suburbs. The suburbs we have calculated to benefit the most from
this project are highlighted in blue in this map.
To reach Adelaide's CBD from these suburbs, commuters have to pass via the bottleneck that currently exists at the intersection of the Southern Expressway, Main South Road and Marion Road. The Darlington Upgrade Project will fix this problem and make the suburbs highlighted - for example, Morphett Vale, Woodcroft and Reynella - more attractive to investors. Investors should consider these areas if they are looking at suburbs further south, such as Noarlunga or Seaford.
What is it?
The Northern Connector will be a six-lane, 15.5 kilometre motorway providing a vital freight and commuter link between the Northern Expressway, South Road Superway and Port River Expressway.
How you can take advantage of it:
The Northern Connector Project will increase the appeal of some of Adelaide's northern suburbs by reducing traffic congestion and diverting freight vehicles from the north's
quieter suburban roads. By reducing congestion and the travel time to Adelaide's CBD and western suburbs, properties in the city's far north, such as Gawler, will be great investment locations.
Those suburbs shaded in blue are located near the intersections of the Northern Expressway, Port Wakefield Road and Waterloo Corner, and as a result of the Northern Connector Project will see less freight vehicles travelling through suburban areas. This will have a positive impact on the liveability of suburbs, including Paralowie, Salisbury and Parafield Gardens. Adelaide's northern suburbs offer bargains for wise investors. The introduction of key infrastructure projects like the Northern Connector Project mean that time is running out before these bargains are snapped up!
Additionally, the Federal Budget has flagged $1.8 billion to infrastructure projects for the state. Exciting times are ahead for South Australia as these projects are set to deliver long-term productivity benefits.
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