Investment in mass transit is driving up residential real estate prices in key Asia Pacific cities from Melbourne to Mumbai, according to a recent study.
Property values go up as residents anticipate the easing of difficult commutes, and the volume of investment into luxury districts goes up too, says property firm Knight Frank in its "Asia-Pacific Residential Review" of June 2014.
Apartment prices in Sydney’s suburbs showed an average capital growth of 3.6% – beating prime Sydney’s 2.3% – after nine new stops were added in the city’s new light rail network.Â
A similar growth is expected in Bangalore, India, where a second Metro rail line was launched in March 2014 in a bid to improve connectivity in the country’s most active luxury market.
In Indonesia, phase one of the Mass Rapid Transit (MRT) system has attracted continued investments in the Sudirman and Thamrin CBDs in Jakarta – the world’s top luxury market in the last two years, according to Knight Frank. The MRT line is due for completion in 2018.
The report predicts that by 2016, Kuala Lumpur’s Light Rail Transit (LRT) extension project will improve the residential potential of key areas along the new Ampang and Kelana Jaya lines.Â
New residential developments are also underway in northern Bangkok where the Bang Sue Hub is set to become a major intersection of several transit lines.
Eight of 11 mainstream residential markets in the region, including Malaysia, Indonesia, Taiwan, India and Australia, saw housing prices surge in Q1 2014 as the increased demand continued to bring "a new energy to [these] areas," the report added.
Of the cities analysed, China’s tier 1 cities have the most new transport infrastructure planned, while Mumbai has a lot of catching up to do, having just opened its first metro line. Traffic clogged Jakarta is scheduled to open its first metro line in 2018.
"Why is all of this important?" the report asks. "Well, firstly it shows the room for growth in developing asia – where we expect the most extensive infrastructure development to occur over the coming years.Â
"And secondly, as infrastructure changes, evolves and is created, it will open up areas and create opportunities."