Q. I recently read an article in Smart Property Investment about how following infrastructure projects can assist you in finding the next hotspot or growth location (June, 2014, p14) and I’m looking to get a second opinion as it seems like a hotly contested issue. Can infrastructure actually drive longer-term capital growth?
A.There are a few market drivers for capital growth and infrastructure is certainly one of them.
New infrastructure can do wonders for an area. In fact, it can drive rental returns up or even provide a sense of capital growth in the area. On top of that, once the infrastructure is built, more people can live in the area and there’s going to be a change in housing demand which will in turn affect the supply of housing.
Transport and infrastructure are huge drivers in the property market. A new medical precinct, university precinct or school are probably the biggest influencers. In fact, the middle class love living near schools. Family-orientated couples and young families are always trying to live near good education facilities and get their kids into good schools. So if you’re looking for infrastructure, make sure schools are on your radar – people really do fight for it, and that drives demand and house price value.
Sam Saggers, CEO, Positive Real Estate