It’s simplistic to assume that big-ticket infrastructure developments will lead to higher house values, as smaller community projects can prove to be more beneficial for property investors.

When deciding on an investment location, it makes sense to consider areas that will benefit from new infrastructure projects, whether it be new roads, public transport, health or activity centres.

Such developments can lead to enhanced amenity and higher demand, which can boost local house prices.

However bigger isn’t necessarily better when it comes to infrastructure and property price growth, as outlined in a new report from Momentum Wealth’s research division.

Take the $1 billion Perth Stadium for example. The research report explains that the construction of large-scale football stadiums typically delivers negligible price growth for nearby residential properties.

Alternatively, smaller community infrastructure projects, such as the $24 million HBF Arena Upgrade in Joondalup, can deliver better price growth to local property markets because they’re more likely to deliver tangible benefits to the area, such as additional amenity (i.e. fitness or family centres) and upgraded streetscapes.

The research report also explains that investors also need to consider the less-obvious locations that are likely to benefit from new infrastructure, as these may make better investment locations.

The $49 million Ellenbrook Rapid Bus Transit System, for example, will benefit residents on Perth’s north-east urban fringe, specifically Ellenbrook and Aveley, through improved accessibility. However the Momentum Wealth research report reveals that the infrastructure will also help to support Morley, in Perth’s inner-metropolitan ring.

Morley represents a much smarter investment location because it’s significantly closer to the Perth CBD, the supply-side fundamentals are more favourable and it has been identified by the state government has a key suburban activity centre.

The Momentum Wealth research report, Perth Public Infrastructure Update ¬– Impacts on local property markets, has identified the city’s top government-funded infrastructure projects and provides unique insights and analysis as to how these developments may impact local property markets.

Perth is currently undergoing a once-in-a-generational transformation as the WA state government executes a massive infrastructure investment program that aims to enhance Perth’s useability and liveability as the city’s population grows to 3.5 million residents.

While new public infrastructure projects can be a good indicator for future residential property price growth, investors need to be aware of the different dynamics that are associated from project to project.

It’s also important that investors take a broader view when making investment decisions, and consider other factors other than new infrastructure projects.

Other property price drivers, such as housing demand and supply, demographic shifts and changing structure plans, for example, also need to be taken into account.

See also:

How important is local transport to property values?

Improved road infrastructure benefits homeowners long-term

Housing affordability & infrastructure growth set up Adelaide for strong financial year