JAMES McIntosh’s assertions regarding property values in the CBD (Rail Cut to Depreciate Properties The Herald 21/2) do not reflect the reality in Newcastle.
His suggestion the relocation of the rail terminus will cause property prices to ‘plummet’ fails to acknowledge the real benefits that revitalisation of the inner city will deliver to the broader community, and does not recognise the real drivers of property values.
The factors that influence values for commercial office space include the rental (price), age and features of the property, and location.
Reasonable access to transport of all types is a consideration, but hardly the main determinant of property value.
The confidence of building owners or prospective owners and tenants – their willingness to pay the rent, or to relocate, or to buy a building are value drivers.
Supply and demand is the key.
A property that is more desirable, in terms of price, features, quality, value or suitability will attract value in comparison to others.
Residential values are also influenced by supply and demand.
People’s demand for housing is largely driven by their confidence – consumer confidence – and whether they believe they can afford the purchase price, the rent or the mortgage repayments.
Again, reasonable access to things like transport networks, shops, or schools is important.
Unless your home is right next to a train station, it seems unlikely the absolute distance to a station is at the top of the list for a buyer.
I am sure James McIntosh would know it is important to understand the real cause and effect relationships in any aspect of life.
To simply assume one thing causes another is dangerous.
Property values may change ‘with’ another factor, but not ‘because’ of the other factor.
I am putting on weight as I get older, but not because I am getting older.
It’s because I don’t exercise enough – nothing to do with age.
The Newcastle Urban Renewal Strategy focuses on the inner city (the Hunter Regional Growth Plan looks at the broader region), and it sets out a comprehensive vision for the future of Newcastle’s CBD.
The strategy is supported by detailed economic analysis, and addresses issues including the revitalisation of Hunter Street, public space renewal and placemaking, housing mix and affordability, transport and access.
Mine subsidence and flooding have been considered, and included in the economic feasibility review.
The strategic vision for transport in the Newcastle CBD includes bus, train, bicycle and pedestrian networks, ‘park and ride’ networks, increased patronage of bus systems, and improved connections around the city for pedestrians.
Every element within this strategic transport vision requires detailed implementation, just as any strategy depends on an implementation plan.
A strategy is a vision; the implementation comes next.
If my strategy is to have a holiday on the Gold Coast, I still have to decide where to stay and how to get there – drive, fly, catch a train.
I don’t abandon the strategy simply because I haven’t finalised every detail.
The department of planning is convening an implementation working group for the Newcastle Urban Renewal Strategy, and I’m sure the right implementation plan will be developed, with input from the community and industry.
Personally, I do not believe that Newcastle will “die under a sea of cars” when the terminus is moved, as Mr McIntosh says.
People said Newcastle would die when BHP closed, but the city has never looked better.
I think we will all get on with life, make things work, and enjoy the benefits of revitalisation for decades to come.
Edward Crawford is chairman of the Property Council of Australia in the Hunter, and lectures in property economics and finance.