What are the links between infrastructure and real estate?

For better or worse, you're not the only one in control of your property value. The old saying 'location, location, location' speaks to the truth of it – your home's whereabouts is just as important as the property itself. One of the most important factors affecting property value is the proximity of infrastructure. It's shown that something as simple as a nearby train station can increase a property's value. Here, we take a closer look at the links between infrastructure and real estate value.

Hamburg - Ever wondered what new infrastructure could mean for your property value? Learn about the link between infrastructure and real estate

Local employment  

Employment is one of the major factors driving desirability of location. Loosely speaking, the more jobs that are available in the local area, the greater the demand for housing will be. Basic economics suggests that property prices will rise in line with the increased demand, assuming the number of properties in the area remains relatively stable.  

Connections to nearby hubs  

Jobs don't have to be immediately on the doorstep in order to drive up the demand in a particular area. In fact, not everybody wants to live right amongst the hubbub of a thriving commercial area. Many people prefer to commute from more peaceful neighbouring towns and suburbs.  

Proximity to central business districts is the first pre-condition of being a desirable commuter town. Next on the list is good transport links to these areas. The building of new railway lines and roads can quickly transform rural communities into commuter satellites.  

A fine example of the important relationship between the value of real estate and infrastructure can be found in the UK. The proposals for a high speed rail link linking London with the country's northern cities is already having a considerable impact on housing along the route. Figures show a correlation between property value and proximity to the new railway station. Homes within 5 miles of the station are set to see the greatest increases unless the properties are located in direct proximity to the railway line.   

Leisure opportunities  

The links between infrastructure and real estate aren't just related to work. The desirability of a place to live is also linked to the leisure opportunities provided by a town or city. Proximity of good quality bars, restaurants, shopping opportunities, and sports facilities can all contribute to demand.  

The links between infrastructure and real estate are just one of many complex factors affecting property value. Browse the Engel & Völkers property insights page for more industry-leading advice on getting the most from your home.

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