The federal government is currently researching a proposal for a $100 billion high speed rail link to be built along Australia’s eastern seaboard. The project, linking Brisbane, Sydney and Melbourne, will offer very fast travel between the three eastern capital cities and various regional centres. Phase one of the report details options for station locations. These transport hubs are likely to have a direct impact on local property demand, with a potentially positive impact on investment property.
The High Speed Rail Report
Phase one of the High Speed Rail Study was released in July 2011, with Phase two of the study to be released in mid-2012. The report is generally considered an implementation study rather than a feasibility study and the project has the support of both the Greens and the opposition. As such, it’s very likely that the high speed rail will go ahead.
Key points of the report include:
- Cost. The project is expected to cost between $61 to $108 billion in total.
- Travel times. Travel time between Sydney and Melbourne (the busiest air route in Australia and the fourth busiest in the world) is expected to be around three hours, compared with one hour by air, nine hours by road, and 11 hours by today’s fastest train.
- Pricing. Economy tickets for Sydney to Melbourne (the most popular interstate air and road route) will be priced at around $99 while business class tickets are to be around $200.
- Route. A list of short-listed corridors and regional hubs. These include specific routes between Brisbane and Newcastle, the Central Coast corridor, Sydney and Canberra, and down to Melbourne.
- Shortlisted stations. A list of shortlisted stations for further research in Phase two of the study. These will form the major transport hubs for high speed rail in the capital cities.
The study lists 10 stations for further analysis in Phase Two of the study. The report noted that the Sydney and Melbourne airports had not been shortlisted since demand for high speed rail tended toward travel directly into the CBD.
When completed, these rail hubs may further stimulate property prices in the locale, with a possible ripple effect for surrounding suburbs. If so, these areas will present significant opportunities for property investment and development projects
- Canberra – Civic and Canberra Airport;
- Brisbane – Roma Street Station and South Bank;
- Sydney – Central Station, Eveleigh, Homebush and Parramatta; and
- Melbourne – Southern Cross Station and North Melbourne.
Each of these existing stations will receive extensive upgrades to facilitate high speed rail. For example, Melbourne’s Southern Cross Station, adjacent to the Docklands area, will be expanded and upgraded at a cost of $2 billion. The report also noted that North Melbourne had potential for property development and, as such, was another suitable location for a high speed rail station.
A Boom for Investors
The report highlighted the fact that the population on Australia’s east coast is expected to increase from 18 million to 28 million by 2056, with a corresponding growth in long distance trips from 100 million to 264 million.
Infrastructure, one of the main drivers for capital growth, has always been closely linked with capital growth and rental yields. People enjoy living close to transport hubs as it allows them to reduce their commuting times.
The High Speed Rail project presents a cheaper and more convenient alternative to flying for interstate travel. It will lead to extensive infrastructure upgrades for some stations in the capitals, and therefore bodes very well for astute investors in the coming years.