A city’s infrastructure is closely related to the property market that surrounds it. After all, while a custom luxury home is valuable in its own right, the potential for capital gains really rests on the region’s public services. Facilities such as telecommunications, transport systems and so on are always highly sought after, and projects that build on these frameworks can drive up house values in the adjacent areas.
Therefore, investors who keep one eye on the future may be able to achieve a good return on their investment later down the track. For example, land prices on the outskirts of a major metropolitan area may be relatively inexpensive as developers might consider it too remote to be profitable. However, if it’s later connected by a major arterial route, it’s safe to assume that its value would shoot up in line with its newfound accessibility.
So, what infrastructure projects are in store for Perth?
Perth’s population forecasted to hit 2.35 million by 2021.
The Metro Area Express (MAX) Light Rail project
You’ve probably heard whisperings of the MAX Light Rail project for quite some time now. The proposed $2.4 billion rail network will run for 22 kilometres, linking Mirrabooka with Perth’s central business district (CBD) and diverging into two separate routes. One will connect to the QEII Medical Centre, while the other will extend to the Causeway.
With the population of Perth forecasted to hit 2.35 million by 2021, according to analysts id, the MAX rail system may assist in alleviating traffic congestion, streamlining transport and ultimately help people get from A to B that much more efficiently.
The route will follow much of Fitzgerald Street and Alexander Drive, and it’s easy to imagine that those who have built custom boutique homes in these neighbourhoods will see their property values increase in the years to come – that is, if the project actually goes ahead.
Doubts emerge over the MAX project
Despite the advantages the rail network would provide, it looks like the people of Perth may have to wait a little longer to enjoy a modern public transport system. Earlier this year, details emerged that Dean Nalder, transport minister for Western Australia, was deferring the MAX project due to cost concerns, and was investigating possible alternatives.
“We will still deliver MAX, we will deliver something that is exactly the same experience, albeit the vehicle we use will be powered by something else, other than overhead wires,” said Mr Nalder, as quoted by WA Today.
This tweet from Perth Now offers a glimpse into the type of transport system we might see in place of MAX:
— PerthNow (@perthnow) March 6, 2015
Mr Nalder went on to explain that the cost savings could be allocated into other projects to help the wider Perth community.
“What I’m saying is, I want to deliver something exactly the same… but if I can deliver it and it gives the exact same run times and the same customer experience, at less than 50 per cent of the cost, then that frees up $1.25 billion dollars that I can direct towards other projects that can benefit everyone in the community,” he said.
It still remains to be seen how the government will proceed with the venture, though the official MAX website claims the project will be completed in 2022. While this particular infrastructure plan may not see the light of day, those who keep themselves informed of similar projects may be able to unlock strong gains on their custom luxury homes in Perth.