NEW MERNDA RAIL LINE BOOSTS LAND PRICES IN OUTER NORTH
- Posted By Prince Lakshman
With the new Mernda line completed, real estate in Mernda can go through the roof. Experts say promises of new rail lines can send property prices to skyrocket.
This month, first passengers have boarded at the new $600 million Mernda Station, one of the three new rail stations being constructed as part of the South Morang line extension.
Since work began on the line in April last year, land prices have increased. There are parcels of land that have been flipped for more than double their purchase price.
There was also an uptick in house prices in the suburbs, with recent Domain Group data showing 25 per cent growth in the median house price in the past year, making it to $575,000.
Mr. Warwick Thomas, a senior valuer in Herron Todd White, revealed that land prices had increased across the neighbouring areas, but not to the scale they had in Mernda.
Although the rail line was the biggest contributor of confidence among buyers, Mr. Thomas said that infrastructures, including road upgrades, retail centres and schools helped increase property prices.
“I think that both sides of the political spectrum are now focused on the importance of rail infrastructure, it’s certainly a hot topic with the upcoming state election and that can only be a good thing,” he said.
According to University of Melbourne planning expert Matthew Palm, in most areas, just the announcement of a rail line can cause property prices to rise, most especially the land prices in outer suburbs.
“The rule of thumb is a proper rail system will increase property values on average between 8 and 15 per cent,” he said.
Mr Thomas said property prices in Mernda did not start to pick up until the first sleepers were laid, partly because people were sceptical about whether the project would go ahead.
“Battle-weary investors and landowners have heard it all before and it’s not until they see something material that it seems to have an effect on the market,” he said. “The announcements are one thing, but the actual turning of soil is an important factor.”
He said more recent announcements of rail projects, including the government’s plans for an airport rail link, the new Metro Tunnel and the coalition’s plan for an extension of the Frankston line, could be met with more optimism, as people saw the need for more transport infrastructure as inevitable.