Major transport projects in Australia’s largest cities have reshaped urban landscapes and connectivity patterns in recent years. Sydney’s WestConnex, Melbourne’s Level Crossing Removal Program, Brisbane’s Cross River Rail, and Perth’s Metronet represent significant investments in infrastructure that promise to transform how people move through these metropolitan areas. But beyond mobility improvements, these projects have profound implications for residential property values in surrounding neighbourhoods.
Transport infrastructure’s impact on property values follows a distinct proximity principle – areas close enough to benefit from connectivity but far enough to avoid negative externalities like noise pollution. Recent research across Victoria has demonstrated that while proximity to transport infrastructure generally enhances property values through improved accessibility, the relationship isn’t linear.
Properties within walking distance of new metro stations, for example, might see significant price premiums, but those immediately adjacent to noisy transport corridors often experience value depreciation. This pattern creates a nuanced geography of property values around major infrastructure.
Different infrastructure leads to different impacts
The type of transport infrastructure significantly influences its effect on property values. Ferry services and rail-based infrastructure (metro, light rail, and commuter rail) typically deliver the most substantial and reliable value uplift to surrounding properties.
Rail and Metro: University of Sydney research found homes within 800m of Sydney Metro Northwest stations experienced up to 15 per cent higher price growth than the broader market. Similarly, RMIT University documented an 8.7 per cent premium for properties near Melbourne’s Mernda Rail Extension.
Road Infrastructure: While improved road access can boost values by 5-10 per cent, properties directly facing major highways often suffer from noise pollution and other negative externalities.
Light Rail: Griffith University’s study of Gold Coast Light Rail revealed a 7.1 per cent premium for apartments within 400m of stations, demonstrating light rail’s particularly positive impact on medium-density housing.
Airports: Research on airports shows particularly pronounced effects on property values. A 2020 Sunshine Coast University study found properties under the Cairns Airport flight path experienced approximately 17 per cent lower values compared to similar properties outside flight paths.
Conversely, a 2013 Queensland University of Technology study commissioned by Brisbane Airport Corporation found that while properties under flight paths had lower absolute values than those in quieter areas, the long-term rate of appreciation wasn’t significantly affected.
Ferries: Ferry services present a unique case in waterfront cities like Sydney, Brisbane, and Perth. Research by the University of New South Wales (2018) found properties within 400m of Sydney ferry wharves commanded premiums of 10-15 per cent over comparable properties further inland.
Unlike rail or road infrastructure, ferry terminals typically add value without significant noise pollution drawbacks. The Australian Housing and Urban Research Institute noted that ferry access is often associated with more desirable water views and amenities, making it difficult to isolate the pure transportation value from the aesthetic benefits of waterfront living.
While ferry services lead to significant uplift, it is difficult to remove the impact of living so close to water and the development of luxury properties as a result.
In comparison, rail infrastructure, particularly metro and light rail services, consistently delivers strong value uplift when properly implemented.
The permanent nature of rail infrastructure provides certainty to developers and homebuyers, encouraging long-term investment in transit-oriented development. Unlike road expansions, which can quickly become congested, rail capacity can be increased by adding more frequent services or longer trains without significant environmental penalties.
The pedestrian-friendly environments that typically develop around stations further contribute to value creation, with retail, dining, and community services clustering to serve the commuter population.
Timing is everything
The value impact of transport infrastructure follows a predictable pattern through project phases:
Announcement Phase: Property values often rise immediately after project announcements as speculative buying begins.
Construction Phase: Temporary disruptions from construction can create localised value dips as residents contend with noise, dust, and access restrictions.
Completion: The most significant and sustained price increases typically emerge once the infrastructure is operational and its benefits become tangible.
The Victorian Planning Authority’s analysis of Melbourne’s Level Crossing Removals showed property values rose 4-7 per cent in affected suburbs, with the strongest gains occurring after project completion when noise reduction and aesthetic improvements were fully realised.
Societal preferences are also a driver
The relationship between transport infrastructure and property values has transformed significantly over recent decades. In the post-war era through the 1980s, highways and road infrastructure drove value growth in outer suburbs as car-centric lifestyles dominated Australian urban development.
By the 1990s and early 2000s, rail infrastructure began showing stronger correlations with value growth as traffic congestion increased. Properties within walking distance of established rail networks started outperforming comparable properties in car-dependent areas.
The 2010s marked a shift toward walkability and urban amenity. Inner and middle-ring suburbs with established infrastructure experienced significant appreciation as preferences shifted toward walkable neighbourhoods with diverse transport options.
The COVID-19 pandemic temporarily disrupted these patterns with a surge in demand for regional properties as work-from-home policies reduced commuting needs.
Since 2022, this trend has largely reversed with return-to-office policies reigniting demand for properties with efficient transport connections to employment centres, reinforcing the enduring importance of transport infrastructure in determining property values.
The future of transport and property values
The future relationship between transport infrastructure and property values remains uncertain, as technological innovations and changing preferences will intersect in ways we cannot fully predict. Electric vehicles will likely diminish the negative noise and pollution impacts on properties adjacent to major roads, potentially increasing values in previously disadvantaged locations.
Autonomous vehicles could fundamentally alter commuting patterns, making travel time less burdensome as passengers can work or relax while being transported, potentially extending desirability to areas previously considered too distant from employment centres.
In a far more futuristic scenario, electric air taxis could connect various landing pads across cities. This way of travelling might completely change which properties are valuable. Areas near these vertiports could become hot real estate spots because people could quickly fly between places instead of dealing with traffic.
This could make some previously far-apart neighbourhoods feel much closer together, potentially evening out property values in some areas while creating new premium locations near the launch pads.