Demand for properties near train stations is set to increase.
Apartments along Sydney Metro stations completed in coming years are predicted to outperform similar properties in neighbouring suburbs and attract significant premiums as the reduced travel time spurs on heightened demand, CBRE says.
“We expect to see some exponential growth in values once the network of four Metro lines are opened and those areas densified,” said CBRE’s Pacific head of research, Sameer Chopra.
“We’ve already seen early evidence of the Metro line driving higher residential price growth, and we see this outperformance increasing once the next stage is completed, with shorter commute times being a key driver.”
Analysis by CBRE and PropTrack found capital values for apartments on the Northwest Metro line from Rouse Hill to Chatswood have already beaten their peer group by 5 per cent on average over the past decade.
The gap was even wider in Castle Hill where apartment values jumped 72 per cent compared with 49 per cent capital growth for Baulkham Hills, which is not located along the Metro line.
Similarly, Crows Nest racked up 79 per cent price growth compared with 62 per cent gain for nearby Cammeray.
REA Group economist Anne Flaherty said the enhanced accessibility provided by the Metro, potential for additional infrastructure development, increased demand and possibilities for rezoning have all contributed to an overall increase in dwelling values.
“Properties in close proximity to Metro stations can be expected to sell for around a 5 per cent premium compared to those in locations further out,” she said. “In some areas, however, particularly suburbs further out, the premium can reach as high as 20 per cent.”
The Northwest line from Rouse Hill to Chatswood began operations in 2019, covering Kellyville, Bella Vista, Norwest, Castle Hill and Cherrybrook.
Mr Chopra said apartments in suburbs where the Metro line could slash the biggest chunk of travel time would rack up the strongest capital gains and premiums.
“As a rough rule of thumb, a 10 per cent reduction in commute time translates into about a 6 per cent premium as we’ve seen occur in London and Dubai,” he said.
“If travel time is cut from an hour to 30 minutes, it could translate to around a 30-35 per cent increase in apartment value in those suburbs.
“This means over time, we would expect apartments along the Metro line to outperform and fetch double-digit price premiums.”
Shorter commute times
The City and Southwest line, which is scheduled to open next year, would chop the commute from Macquarie Park to Barangaroo from 53 minutes to just 18 minutes, which means apartments in Macquarie Park could get a significant boost in values and premiums, according to Mr Chopra.
“If heading south-west, the commute from Pitt Street to Bankstown is cut from one hour and 20 minutes to 30 minutes, which would make apartments in Bankstown more desirable,” he said.
The City and Southwest line covers Crows Nest, Victoria Cross/North Sydney, Barangaroo, Martin Place, Pitt Street, Central, Waterloo, Sydenham, Marrickville, Dulwich Hill, Hurlstone Park, Canterbury, Campsie, Belmore, Lakemba, Wiley Park, Punchbowl and Bankstown.
“It makes the CBD very commutable and I think that’s one of the hidden benefits that will become much more evident through next year,” Mr Chopra said.
Sydney’s Metro line has already had an outsized impact on the city’s property market, not only pushing up residential values but also driving population growth in Metro suburbs, he said.
Population in suburbs along the Metro line has surged by 23 per cent over the past decade, nearly twice the pace of suburbs further out.
In Macquarie Park, the population has increased by 80 per cent since 2011, compared with just 6 per cent in non-Metro suburb West Pymble. Similarly, Canterbury’s population climbed by 53 per cent compared with just 8 per cent in Earlwood.
The Metro is also attracting a younger, more vibrant demographic that is favouring higher density living and eating out.
CBRE analysis shows apartments make up 48 per cent of housing stock in Metro suburbs which present an affordable option for younger generations who cannot afford to live in the city but want to access the city conveniently.
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