How does infrastructure affect the value of an investment property?

Picture a house in the desert, with nothing around it. This property, just standing on its own, has a certain value. Someone comes along and builds a big, blue lake next to it. The value of that property is no longer the same - it has (presumably) increased in value because of something that's happened next to it. Someone else comes along and builds a shop nearby, and not long after someone else comes along and builds a school and a road. All of these things affect the value of that property.

In the same way the house in the desert gains huge value from a lake, school and road appearing nearby, a suburban Brisbane unit, for example, can grow substantially because of what's going to be around it. It pays to consider what existing infrastructure is nearby a prospective investment, and what future infrastructure is in the works.

For example, in the area you are looking, plans could be in the works to turn an unsightly industrial zone into a retail area, a large supermarket, for example. This one change could affect the whole face of the area, and increase the value of your investment.

Infrastructure also plays out on a much larger scale. For example, the state government decides to build a $2 billion port in an area which was once purely industrial. What that normally means, besides the obvious existence of a port where there wasn't there before, is a marked change in the whole area and surrounds. A sharp increase in employment and in dollars coming into that area, for example. More jobs and more salaries means more people looking to live nearby, which puts upward pressure on housing. So big infrastructure projects are a reasonable leading indicator for what will happen for the future of house prices in the area in two or three years down the line, so it's helpful to know where and what infrastructure is being built.

It's also helpful to know what infrastructure's being built that could negatively impact the value of a house. For example, the Lane Cove tunnel in Sydney's north could negatively impact the value of a property if it were close by.

Infrastructure can and does have a far-reaching impact on property values. You need to have the knowledge to be able to make a good property decision, which means either undertaking research or employing someone to do it for you.