New City Rail Link could ease Auckland affordability woes

As we have discussed before, Demographia has highlighted Auckland as being one of the most expensive places to live. Everyone from economists to politicians are considering what exactly it would take to ease the market and allow new residential property investors to make a first buy: the answer may be less obvious than you think.

A ticket to ride

Property expert Tony Alexander makes the argument that population density in Auckland is one of the major drivers of high property prices, citing the fact that many people choose to pay these costs because of proximity to the CBD. However, if something like a new train line made it easier for those in the regions to get to town, we could be seeing demand ease for the inner-city properties.

In Tony Alexander's own words:

"Imagine what would happen to Auckland versus regional house prices if a public transport drone pod could take you from your work in Auckland CBD to Mokau in 30 minutes!"

We are lacking in drone pods, but we do have a major train link in the works. A train link that has now been funded two years earlier than originally planned, says the Property Council of New Zealand. While the City Rail Link (CRL) only adds new train stations to Central Auckland, it allows for "future expansion of the rail network", allowing for lines to more distant suburbs to be constructed.

With the new CRL, we could be seeing the beginning of a population spread in Auckland, enabling more people to live in the regions and still make it to work. With property demand more spread out, the concentration of price growth would follow – making the residential property market more accessible to new buyers.

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

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