One of the keys to successful long-term investment is understanding the factors that produce demand in the Australian property market, and then using this knowledge to produce capital growth. In particular, appreciating the effect that have on housing demand, and their impact on long-term investment opportunities, should therefore play a role in any investment strategies you pursue.
Why are infrastructure projects important to capital growth?
Infrastructure projects (both planned and in progress) are key indicators as to where increased housing demand can be expected.
New transport links, a growing choice of educational facilities, improved utilities or the introduction of health services all contribute to demand for housing, as this is the sort of social infrastructure that attracts families to come and live in an area.
The development of infrastructure can thus be seen to drive up employment and economic growth in a variety 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.
Therefore, when devising a property investment strategy, it makes sense to explore current and planned infrastructure in regions where you are considering buying an investment property. In this way, you can be relatively confident that you will be able to find tenants, and then when the time comes to sell, the value of the property will have appreciated over time.
It’s not only social infrastructure that impacts on housing demand
In addition to the sort of local infrastructure detailed above, other forms of development can also have a major effect on the housing demand in a region. In particular, infrastructure projects that bring with them employment opportunities can prompt people to move to an area for work, driving up the demand for quality housing as a result.
Major infrastructure projects in Australia, in particular road and rail works, are often many years in the making. This means that workers on these projects who come from interstate need to rent property in the vicinity of the job site, and so housing in such localities is likely to remain in demand in both the short and long term.
The same principle applies to major projects in the resources industry. When a mining development expands or increases production, this will generally be accompanied by a growing workforce, most of whom will require accommodation within reach of the worksite.
Therefore, areas where the construction and mining industries are entering the market or expanding their operations, and which subsequently attract jobs and workers to the region, can provide promising opportunities for long-term Investment and capital growth.
Once complete. will enable freight to be moved from Melbourne to Brisbane, via regional Victoria, New South Wales and Queensland, in less than 24 hours. Running for 1,700 km and comprising 13 separate projects. Inland Rail is the largest freight rail infrastructure project in Australia and is set to significantly improve logistics along the east coast. The project will require the construction of 600 km of new tracks, plus upgrades to around 1,100 km, and is expected to be completed in 2025.
During the peak construction period, Inland Rail will create around 16.000 direct and indirect jobs. It is also expected that around 700 ongoing jobs will result.
If you are new to property investment in Australia, or even if you have some experience in real estate investing, it can be difficult to get access to the right market information to enable you to identify high growth areas with significant infrastructure developments planned, or to be able to interpret that data in such a way that you are fully informed.
That’s where High Income Property comes in. Our expert team of property advisors uses the latest industry information to help you choose areas where the planned infrastructure can mean there is significant potential both for over time.
Get in touch with us via email at email@example.com or call us on(02) 8007 4001, and we will be only too happy to arrange a meeting to help you find areas that look set for high growth, and show you how to achieve prosperity through property investment.