Herald Sun: Homeowners near East West Link out of pocket during construction. Nathan Mawby Property Reporter, 3 September 2014
Streets to be affected by price reductions around the East West Link. Picture: Secret Agent
UP to $164,000 could be wiped from the value of homes in the vicinity of the East West Link tunnel’s entrance during construction, a report reveals.
The report, to be released today by buyers’ advocacy group Secret Agent, modelled projections from sales during and following construction of the Burnley Tunnel in Richmond.
Secret Agent founder Paul Osborne has already observed prices dropping and owners struggling to sell in the area.
Secret Agent, which operates throughout Melbourne’s inner suburbs, found the average house price for the area expected to be affected by the tunnel’s construction was currently about $813,224.
It had already fallen almost $100,000 from $912,120 in 2013.
The report predicted the average price would tumble to $648,918 by 2016, based on price changes recorded for homes sold near the Burnley Tunnel from 1993 to 2005.
House price predictions for the area to be affected by East West Link construction. Picture: Secret Agent
“You can see the average sales price near the proposed East West Link has dropped this year from last and there are some owners struggling to sell their properties,” Mr Osborne said.
“There will be people just not able to sell their house as we get closer to the start of construction.”
The research suggested home prices would rebound after building of the tunnel had finished, with the average price expected to reach $1.157 million by 2020, based on the Burnley Tunnel experience.
But Mr Osborne said the research also showed homes within 500m of the ventilation stack in Richmond had slower value growth than areas more than 500m away from the stacks, and it took an additional three years after construction was completed for values to catch up.
Value growth then dropped away again a year later.
The Burnley Tunnel modelling showed for every metre further away from a ventilation stack, a home gained about $61 of value per square metre.
Mr Osborne said new research on the health impacts for those living close to ventilation stacks had emerged since the Burnley Tunnel was constructed.
Clifton Hill Primary School is slated to be within 200m of the proposed East West Link ventilation stack.
Mr Osborne said if the vent affected parents’ willingness to send their children to the school, it could further hurt property prices across the school zone.
“It’s a little bit of an unknown. The construction zone is the main factor that drives people away,” he said.
“But the vents have more of the pollutants … and what we have modelled that on (the Burnley Tunnel) the problems were not as well known.
“In the next five years, that may make some of those locations around those vents not repaired in terms of their property values.”
He noted homes in the surrounding area, away from ventilation stacks, might get better air quality as heavy traffic from Alexander Pde was pushed underground.
Premier Dennis Napthine last week claimed homes in the area might gain value in the long term.
“I would suggest to people to buy up those houses because Clifton Hill and North Fitzroy will certainly be in a much better environment when East West Link is put in place, because there will be less traffic on Alexandra Pde, it will be converted into one of our magnificent boulevards, public transport on the north-south routes will be significantly improved, so it will be safe, better amenity, it will be a great place to live,” Dr Napthine said.