Implications of road noise on capital growth

Hoping to get some opinions and thoughts on the effect road noise will play on the capital growth prospects for a particular property. I understand that values are generally going to be lower with road noise and this means the price may be lower (than comparable properties without noise) at time of purchase and subsequently at sale or revaluation. However my question is largely related to the capital growth prospects of such property. I have provided some details below of a particular property that ticks a lot of boxes yet has significant road noise. Appreciate as much insight as may be offered.

The good:
- 5 bedroom house on waterfront.
- Central location and easy to get around by car. 5-10 mins driving radius to schools, work centres, beach, shops etc - Gold Coast suburb
- North to wide water (no boats though)
- Cul-de-sac street (40km/h)
- Purchase price around 70% Land to value ratio
- House is in reasonable to good condition - nothing to spend on it to live in it
- Purchase price is attractive compared to nearby properties that might not have rd noise.

The concern:
- 50m - 70m away is a large arterial road with an intersection. Lots of motorbikes and V8's go past.
- Wind direction can vary how significant the noise is but will hear it everyday
- Noise mostly heard from outside the property however internally with the windows open can be heard. With the windows close this may reduce the noise considerably.
- Road is usually busy all the time so most of the day can be heard
- The waterfront is wide and open and the sound does travel across it easily

 

Do you mean Loan to Valuation ratio?

In general terms, all properties in a given suburb seem to appreciate at the same rate except for the premium properties, ie those that are way above the median price. So a $2M property will not grow at the same rate as a median priced property, say of $600K.

Also in general terms, your noise or main road affected properties will suffer at least a 10% discount to other similar properties (assuming they are median priced too). They also can take a lot longer to sell.

 

Road noise can be dealt with (double/secondary glazing) so long as access is relatively easy.

Speaking from limited personal experience, my first property was right on Pacific Hwy and you couldn't open a road-side window without being deafened by trucks doing compression braking. Anything we tried to grow on the balcony died from pollution. However we installed secondary glazing and it became quieter than a whisper, and sold it for nearly double the price in under 10 years.

I think it helped that access was via a back lane with several options to get in/out, so there was never any trouble coming home and relaxing in peace. Other properties I also considered at the same time are in areas that are relatively quiet, but are highly affected by surrounding traffic jams, and they have seen barely half the capital growth.

 

Land to value ratio

Ie $1mil house : $700k worth of land / $300k worth of house (Building)

 

maybe but shouldnt you be comparing it to other options available in the class for the same cash investment? Why not compare to a home in a quiet street and great location in an up and coming suburb?

i’d personally look somewhere else because when properties are stinky they become more stinky in poor economic conditions. A great property will almost always be great.

 

You answered it yourself - the price will be lower at the time of purchase and future sale. So, what is concerning you will concern future buyers also.

Property will probably grow in line with the suburb growth, however, valuers will always value it less than other similar properties just because it is in a noise corridor - assuming you want to access equity down the track for future investing.

Best to explore other options, which meet your needs.

 

Probably worth factoring in health too. The pollution from a road can do nasty things to you....

There has been a fair bit of research done on this. Probably worth looking it up.

 

Hugh impact. I had 3 properties on main roads. Lucky two had semi development capabilities

 

Speaking as an enviro engineer, at 50m to 70m setback distance to the road the emissions from road traffic will be well dispersed by the time they get to your property, so would not expect high pollutant concentrations, higher than an area not near a major road though. Noise can be treated via upgrades to the facade (glazing etc) but guess what happens as soon as you open the window to catch that nice breeze...

 

Aren't the pollutants dealt with by electric cars in ten years time?

 

whats the uptake rate of electric vehicles though? Australia has a comparatively old vehicle fleet compared to other parts of the world. we also dont have charging for dirty vehicles, and dont have the public transport infrastructure for people to transition away from personal vehicles.

In the mean time the population grows, traffic flows increase as does congestion, and therefore likely that emissions also increase, subject to changing of the fleet.