Brisbane Properties Close to Ferry Terminals See a 4% Increase in Value

Introducing ferries as a mode of transport in Brisbane has had a positive impact on property prices in surrounding areas, according to Barbara T.H. Yen, a Research Fellow from Griffith University, on Property Observer. This means that governments can use ‘value capture’ financing to fund public transport.

Traditional sources of funding for meeting public transport demands in Australia’s capital cities have become inadequate, said Yen. Governments are therefore now looking to alternative funding sources, such as value capture financing.

Value capture is a means of installing specific transit infrastructure improvements in particular areas in order to increase their land values, and the revenues gained from this can be used to fund public transport systems and infrastructure.

To determine whether value capture financing is actually a good means of funding public transport, Yen and her team at Urban Research Program did a study on how Brisbane’s ferries have had a significant influence on the value of properties in the city.

In 1996, four CityCat ferry systems were introduced in Brisbane, and the system grew to 23 terminals, 19 CityCats and 9 mono-hulled ferries. A lot of ferry-oriented developments were built to leverage off the CityCats and other ferries. Land and property developers help paid for the construction costs of the terminals along the Brisbane River (Regatta, Northshore Hamilton and Teneriffe) so that ferries could service their developments.

The study found that the prices of properties situated close to ferry terminals increased as the terminals expanded. For properties that were located 1km closer to a ferry terminal, their values rose by 4% on average.

The positive effects of ferry service on property values were more evident at the terminals of Regatta, Bulimba and Hawthorne, while there was some effect at the Mowbray Park terminal. This means suburbs that had both mature terminals and 10 years’ worth of ferry-oriented developments experienced the largest property price increases.

Many high-rise apartments in the Brisbane CBD also saw a huge increase in price due to their close proximity to a ferry terminal. Yen said her team’s research suggests that reducing the distance to a ferry terminal by 100m would increase the value of a property in the CBD by 4.9% to 13.1%.

Overall, land and property developers seem to have been justified in securing ferry terminals in order to service their developments, while governments might also be justified in using value capture mechanisms to pay for ferry terminals and boats and their associated operating costs, said Yen.