For those of us who live in major capital cities, traffic congestion is the bugbear of our daily existence. Infrastructure Australia, the body which plans for our future road and transport needs, says that a staggering 94% of all vehicle passenger trips are currently being undertaken by motor vehicle.
OK, that’s bad news. So what’s in the transport pipeline that might reduce our reliance on roads? Well, even if all the rail and light rail projects on the table are completed, by 2035, 94% of Australian vehicle trips will still be taken by motor vehicle.
The more things change . . . the more they stay the same.
What that means for road users is that, if you think traffic congestion is bad now, it’s set to get a whole lot worse.
What happens on our roads has an interesting knock-on effect for the broader economy and how we live which goes way beyond road rage and commuter aggravation.
Traffic congestion is a huge expense for business and one which most are keen to minimize. In response, freight and logistics companies are moving their warehouses out of city centres. The focus will be on global supply chain networks which allow goods to bypass city centres but connect to distribution nodes. The transfer of freight and logistics to the urban fringes is already happening in Melbourne, Sydney and Brisbane, and the jobs associated with the sector are moving in tandem intermodal.
But we are still not addressing the traffic congestion issues which plague, not just our central business districts, but the far reaches of our suburbs. In fact, most of the commuting to work each day is not into CBDs; it’s between municipalities. And we know that the majority of people seeking work will not consider employment that requires a journey greater than 45 minutes. So here again, traffic impinges on work and living options.
We are experiencing a shift to more localized jobs, and as those jobs radiate out, people will be able to live further away from city centres. In Melbourne, for example, we are seeing the Monash cluster which is essentially a large jobs pool in the Glen Waverley area that will allow people to travel in from Pakenham and Cranbourne. In Sydney we see the so called ‘Innovation Arc’ linking the North West to the South plus the proposed development of Badgerys’s Creek Airport and the so called Western Sydney Employment Area lands.
The residential property market is breaking itself into two distinct components, responding to two very different types of worker.
On the one hand, we have the knowledge-based economy; the professionals who trade on human capital, and are increasingly choosing to be based in inner and middle urban rings, this includes financial, legal, professional, scientific, educational and health professionals. They bring with them the more highly paid household services and also international services. Because they are paid more and their time is valuable, they are driving up inner and middle ring home prices very quickly. This is creating problems for essential service workers (police, teachers) in terms of affordability and also creating new housing markets for lower paid service works (e.g. food, beverage and accommodation) who are increasingly short term working visa holders.
On the other hand, we are already seeing in Sydney and beginning to see in Melbourne, a completely different housing market on the outer fringes. The residents here work for more modest salaries which, even with career progression, will not increase significantly, so they have to buy dwellings that fit within their limited long-term budget.
MacroPlan analysis compiled over the past 10 years for example indicates that the rate of price and growth for inner and middle ring dwellings is between 3 and 6 times faster than fringe areas.
The result of these two forces at play will be property prices growing much more quickly within 10kms of the CBD than on the urban fringes.
So you can see that traffic congestion is going to be a big shaper for both business and households.
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For more information or to discuss your property research requirements, please contact Amy Williams, National Marketing Manager on 02 9221 5211 or email@example.com.