How Infrastructure Will Impact Your Ability To Create Capital Growth

When investing in real estate, smart investors know that buying well comes down to more than just the quality of a building or property.
This is because one of the key factors to affect the capital growth and rent rate potential of property is infrastructure. Therefore, it is crucial to look at what is going on within the location that you’re planning to buy in.
Infrastructure includes things like transport, schools, roads and hospitals. All of these factors create jobs and income, which in turn puts money in a property investor’s pocket through good rent returns and steady capital growth.
Currently, in Australia, we’re seeing some huge economic moves and changes that will drive infrastructure growth and benefit smart investors who know what to look for.
WHAT IS HAPPENING RIGHT NOW IN AUSTRALIA?
To understand how changes and developments in infrastructure benefits you as a property investor we need to pay attention to what’s happening right now.
In Victoria, the government has pledged $1 billion towards building the southern hemisphere’s largest flu vaccine manufacturing plant near Melbourne Airport, and the 20/21 budget has earmarked $2.2 billion to the Suburban Rail Loop, creating new tunnels and stops that will improve rail travel in the metro areas and beyond.
NSW is investing in infrastructure too, committing $72.2 billion over the next three years to road and rail projects.
Currently, there is a huge amount of government stimulus and investment in infrastructure. While interest rates are at a record low for us as investors, state and federal governments are also taking advantage and borrowing cash to plough back into the economy.
WHY IS INFRASTRUCTURE IMPORTANT TO PROPERTY INVESTORS?
New or improved infrastructure creates jobs, quality housing, and areas of good liveability where people will pay higher rents to live.
Introducing something like a new train or tram line, a Westfield shopping centre, or a new motorway can drive property prices up much faster than everyday capital growth predictions.
And it’s not just the end products that make a difference. The construction projects themselves create jobs. This in turn brings more people into an area and demand for housing goes up, meaning rent rates can also rise.
RECOGNISING OPPORTUNITY WHERE OTHERS DON’T
COVID-19 rattled us. It put our health, jobs and homes in jeopardy, and many people might be scared about making an investment decision at a time when so much is still unknown.
But the truth is that the Australian economy is investing in infrastructure growth, which will help to create jobs, higher incomes and greater wealth.
Buying a property within a 20km radius of new or improving infrastructure projects is a smart, educated investment choice.
COVID-19 has exposed the quality of how people live, and how we want to live in the future. We want green spaces, high mobility, easy access to local areas and walkability to amenities. We want to be close to the action.
Infrastructure developments and improvements can provide the quality of life people are demanding now and in the future.
BUY RIGHT, BUY NOW
With interest rates low and infrastructure projects high, there has never been a better time to buy – however, you still need a strong strategy to ensure you’ll reap the long term rewards of a successful property investor.
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