The importance of public transport links in capital cities
February 21, 2014 / Written by Rich Harvey
Successful investors know the key to a cash flow positive property is purchasing real estate in an area where people actually want to live.
There are numerous amenities that can draw renters to a region, whether it be good schools, proximity to workplaces or a vibrant nightlife.
However, one factor that should not be overlooked is the importance of transport links. This is especially true in the case of capital cities, meaning those who are looking to buy investment property in Sydney, Brisbane or other capital cities should focus on finding real estate near public transport.
Capital city population growth on the rise
Data from the Australian Bureau of Statistics (ABS) shows that as of June 2012, more than 15 million people - nearly two-thirds of the country's population - lived in a capital city. In fact, the combined population of capital cities rose by 1.4 million people during the five-year period ending in 2012.
The ABS reported that Greater Sydney alone experienced a population increase of 347,100 people during this time period. Meanwhile, Greater Brisbane saw growth of 233,200 people.
The population of Australia's capital cities also far outstripped growth throughout the rest of Australia, rising 10.2 per cent between 2007 and 2012 compared to 6.8 per cent.
This trend has continued since then and is forecast to do so for the foreseeable future. Data released by the ABS in December 2013 showed the population increased in every state and territory during the June quarter of 2013.
With most of this activity taking place in capital cities, it's easy to see how public transport is becoming an even more essential part of property investment in Australia.
Benefits of proximity to public transport
First, cities are becoming more crowded and expensive due to high demand and limited space, meaning more people are likely to forgo purchasing a vehicle in favour of affording a home.
Secondly, areas with high populations typically encourage residents to utilise public transport as a way to deal with traffic congestion.
Finally, as consumers become more invested in environmental conservation, the popularity of public transport will increase further.
For investors who believe "green living" is just a passing fad, keep in mind that the majority of Australians (62 per cent) in 2012 were concerned about environmental problems in the country, according to the ABS.
Of course, public transport is also an essential amenity for a very simple reason: Not everyone has the luxury of living close to their workplace.
Commuting to work each day can be costly, time-consuming and stressful, especially if a place of employment is significantly far from a residence. Difficult finding and affording parking space only adds to this problem.
This is one of the main reasons proximity to public transport has been a perennially popular amenity.
Drawing the line
Keeping public transport in mind when you buy property in Australia is a smart move, but it's also important to know how close is too close.
There is such a thing as being too near public transport. If you live above or right next to a bus or train stop, you'll have to contend with fairly constant noise from both vehicles and people waiting to board them.
Also, potential tenants who are concerned with privacy may not be too keen to live in a home that consistently sees crowds of commuters congregating outside their front doors.
For this reason, it's recommended that you find a property that is within walking distance to public transport. This way you can provide potential renters with easy access while at the same time maintaining a safe distance.