It is important that property buyers are aware of any infrastructure projects or any other type of change of use planned in the vicinity of their proposed purchase. Construction of tunnels, bridges, car parks and the like can have a detrimental impact on property prices.
These types of works invariably result in undesirable outcomes such as excess noise, parking problems, pollution and overshadowing, as well as being visually unappealing.
It is not surprising that properties for sale in the vicinity of such projects result in a significant reduction in the pool of buyers and therefore a substantial loss in capital value.
A recent example in Sydney shows that even the well-educated can fall victim to a change of use scenario.1
Powerful lawyers and real estate executives allege they were duped by local and state governments over their purchase of multi-million-dollar terraces in exclusive Millers Point.
The properties in question were housing commission and therefore the vendor was the NSW state government.
The buyers allege that they were not warned of plans to increase the size of nearby The Rocks Markets on weekends and public holidays until after their sales were complete.
As one buyer lamented: “You can forget about enjoying the peace and quiet of your home and its surrounds on the weekends … it takes out our view of the harbour and the Opera House.”
This type of situation has occurred several times recently. Melburnians need to be particularly careful as at the moment there are a number of major transport projects either just starting or in the planning stages.
An example is the sky rail project on the Cranbourne-Pakenham railway line.
Homes affected will be overshadowed by concrete pylons that will be built approximately nine metres above ground level. Residents along this corridor are currently taking legal action against the state government.
Another project that may have an adverse effect on property values is the Western Distributor by-pass. This road infrastructure project is being carried out in partnership by Transurban and the Victorian state government.
Included in this project are both an elevated roadway and a tunnel leading from the West Gate Freeway to Footscray Road.
Traffic tunnels will be constructed approximately 35 metres below prime inner-Melbourne residential real estate. This certainly would not be on the wish list of most property owners; a multi-lane freeway directly below their lounge room.
Another by-product of this project will be chimney stacks exuding fumes from the underground road tunnels.
Despite being well into the planning process, Transurban is not yet able to give an exact position of these chimney stacks apart from saying they will be near the tunnels’ portals.
The chimney that will be situated near the Williamstown Road portal is likely to be close to a residential area in Yarraville.
Last year Transurban held information sessions which included pop –up booths in the affected communities. These booths included detailed maps and designs of the proposed project.
In my opinion Transurban have put the cart before the horse.The position of chimney stacks is one of the most contentious aspects of the project yet residents were not able to assess and provide feedback on this important matter.
It is important that property buyers investigate any proposed major projects or any other alteration to existing use in the immediate area before making a purchase.
Some pockets of housing have greater protection from inappropriate development.This protection can be via existing zoning or restrictive overlays.
In order to protect the value of their investment, residential property buyers should always endeavour to select a property that is positioned in an area where there is little opportunity for non-residential or change of use projects to be undertaken.
1 Source: The Australian newspaper; 27th December, 2016