When looking for future property price growth I often look to infrastructure as one of the ultimate drivers of values in residential property.
The common denominators of most good growth areas are affordability, good infrastructure (with a bonus of spending on new infrastructure) and proximity to major jobs centers.
New suburbs and upcoming residential areas may fit into this basic formula when looking into property investing in Melbourne:
Affordability + Infrastructure + Jobs = Price Growth
Nothing in real estate is really that simple, but this basic formula is a pretty good starting point for most Mum & Dad property investors. It at least gives you a much better indicator of potential capital growth areas. Capital growth should be one of if not the main reason you contemplate researching property investing in Melbourne in the first place.
The key elements are transport infrastructure, education-medical infrastructure, private investment infrastructure, shopping centers.
So major developments such as new rail lines and train stations, new hospitals, universities and university expansions, new freeways and major roads, new suburbs with new schools, major shopping centers & employment precincts etc.
Transport infrastructure helps improve the accessibility of areas. These things revolutionise the appeal of a location with the creation of better infrastructure and transport services.
These types of infrastructure projects and hubs can create tremendous economic activity and jobs (leading to real estate demand) while under construction and they improve the amenity and appeal of locations once completed.
In 2019 those looking for property investing in Melbourne there are some areas you will find hospitals and universities together because often they are clustered in the same location in major capital cities (Box Hill & Foots-cray are two examples in Melbourne).
With this type of infrastructure three things usually happen.
1. It creates employment while under construction.
2. It can create even more jobs once completed.
3. It attracts workers and families creating more housing demand.
Any suburb or precinct with a cluster of major medical and education facilities in its midst has an extraordinary source of accommodation demand. So much activity including real estate demand, is generated for property investing in Melbourne around these types of facilities.
From 2018 and beyond Melbourne’s west is undergoing massive infrastructure changes with development. The area already has a major hospital and two university campuses, but new spending will take this area to a new level.
Another $1.4B hospital is planned and an $800 million transport hub is being built as part of the $5.5 billion Western Distributor Tunnel and another $2.5B in private commercial projects for the area.
These types of events are game changers for property markets and any thinking about property investing in Melbourne.
Big ticket infrastructure has a huge influence on population growth, demographics and supply and demand. For example, a major new hospital gets built, other developments tend to spring up around it..
From 2018 and beyond the Melbourne markets are generating enormous infrastructure activity totalling Tens of $Billions of dollars. This means, massive construction work, new jobs (not just on the construction site but right across the industry to suppliers, manufacturers, transport etc and when completed even more jobs are created).So, before you look into property investing in Melbourne do some homework based on the above formula to give yourself a much better chance of success.
Above all take some form of action today, not tomorrow, TODAY, right NOW.
Ready to take the next step?