Budget targets traffic congestion to improve city living

17th May 2018By: John McGrath

Looking at last week’s Federal Budget through the eyes of home owners, buyers and sellers, one of the most significant and relevant initiatives to us is the $1 billion Urban Congestion Fund.   It’s basically money for state projects aimed at reducing traffic ‘pinch points’ in our major cities.

The policy idea is concrete proof that traffic is becoming a real issue both economically and socially in our major cities, largely due to rapid population growth – and it needs to be addressed.

The Government is focused on the economic costs of congestion – estimated at $16B in 2015, with Treasurer, Scott Morrison saying busting congestion is “a very important economic objective.”

But for home owners, traffic is a lifestyle issue and it certainly impacts property values.

History tells us that anything done to reduce travel times between where we live and work has fundamentally changed the value of homes in affected areas.

Think about the M5 East in Sydney. The road was completed in 2001 and house prices in Revesby, Roselands and Bexley North went up by more than 40% in 2001-2003.

How about Brisbane’s Inner City Bypass? It was completed in 2002 and house prices went up by more than 50% in Clayfield and Ascot in 2002-2004.

Traffic congestion has a major impact on our lifestyles because so many of us prefer to drive to work. No matter how good the public transport is, we are a car-loving nation and statistics show we’ll drive to work if we can.

But sitting in traffic induces stress and soaks up time we could be spending doing other things. It’s a real deterrent that buyers factor in when making decisions about where to live.

A report by the Grattan Institute published in October 2017* provides a new form of analysis of traffic congestion based on comprehensive Google Maps trip-time estimates.

Focusing on Sydney and Melbourne, the report confirms what every CBD commuter knows – traffic is getting worse. Roads are proven to be busier and slower.

In the morning peak, the average CBD-bound trip in Sydney takes 70% longer than it would in the middle of the night when there’s no traffic; and around 80% longer in Melbourne. The report identified some specific ‘pinch points’ too:

  •   Sydney CBD commuters from Hurstville in the south and Balgowlah in the north face some of the worst delays. Drivers spend an extra 15 minutes on the road as a matter of routine, far longer than drivers commuting over similar distances from other parts of Sydney
  •   Melbourne CBD commuters have a worse time if they live in north-east areas like Heidelberg, Kew and Doncaster. Drivers using the Eastern Freeway and Hoddle Street in the morning peak are often delayed for more than 20 minutes – much longer than drivers from other parts of the city

Another big issue with traffic congestion is the unpredictable nature of it. If it normally takes 30 minutes to get to work but on a bad day it can take 50, then people must allow 50 minutes every day if they want to make sure they’re never late.  The report points out that many people can handle traffic if the required travel time is reliable.  Unfortunately, in major ‘pinch points’, it’s usually not!

Bad traffic is prompting some Sydneysiders leave the city permanently.

According to our McGrath regional NSW Principals, more Sydney buyers are mentioning traffic as a direct reason for their choice to quit big city living.  In years gone by, it was mainly about finding more affordable homes or pursuing a coastal lifestyle but today, traffic is definitely a push factor.

Social researcher Mark McCrindle has identified the same trend. A recent Fairfax article quoted him saying: “It’s discomfort with the affordability of the big cities and the infrastructure challenges that’s pushing people out of cities, rather than the pull factor of a particular idealistic location.”

For those of us who stay in Sydney, it’s the loss of personal time that this an issue.

“Commuters are sick of being stuck in traffic rather than spending time with their families,” says Federal Regional Development Minister, John McVeigh.

So, it will be interesting to see what this Urban Congestion Fund can achieve in our trouble spots. If they make good decisions and manage to materially change traffic conditions in suburbs with long-standing issues, it could have a very beneficial impact on people’s lives and on property values.

*Stuck in traffic? Road congestion in Sydney and Melbourne by Marion Terrill, Grattan Institute, published October 2017

Published: Tuesday, May 15, 2018