Why main roads are a real estate no-no

All  investors know that location is one of the most critical components of any successful property investment.

When long term capital growth is the sought after reward at the end of the real estate rainbow (as it always should be), it is vital that you not only find the best possible property, but the best possible position.

Now by position, I don’t just mean finding the right suburb, in the right area, near the right capital city…

I mean the exact aspect of the property within that ideal suburb; one that consistently delivers strong, long term capital growth that outperforms the averages.

One of the biggest mistakes I see investors and home buyers make is to compromise on position in favour of a “bargain”.

I’ve heard numerous stories from investors who have been talked into purchasing a property because it ticked all of the right boxes, but came at a cheaper price because it was situated on a main road.

The agent who sold them the property has convinced them to make some concessions for the fact that it’s on a main road by saying things like…

“It’s at the rear of the block of apartments, so you can hardly notice any traffic noise.”

Or, “Look at the size of the block of land the house sits on.”

Or they said something like: “You won’t find another period home in this neighbourhood for such a great price and it will always hold its value because of the original features and land component.”

Don’t get me wrong, all of us want a good deal when it comes to buying an investment or even our own home.transport road highway infrastructure build car drive commute suburb city

And for some new Australians, the concept of living on a main road is more than reasonable.

Consider countries that have enormous populations, in excess of three times the total number of Aussie residents, yet lack the wide open spaces that we enjoy here.

Many people from these countries have little choice but to live on a main road.

But they also have properties that are purpose built to allow for traffic noise, with things like double glazing and solid stone walls.

In Australia though, we live according to our traditionally hotter climate and as such, have houses built more for good ventilation than noise suppression.

Additionally, most of us enjoy the great outdoors and the customary ritual of a summer “barby”; and we’d rather not have to listen to passing traffic while enjoying the company of friends and family.

But excessive noise is not the only reason I warn clients away from properties on main roads; there are plenty of convincing arguments why main roads are definitely a real estate no-no, particularly for investment.

1. The risk of over-development

One of the policies of our state governments is  to control our booming population and curb potential urban sprawl is designed to concentrate development around major transport hubs; this includes existing and new main arterials.

This means that if you buy on a main arterial, you face the very real possibility of one day becoming surrounded by new developments.

Of course as the population in these areas starts to boom, businesses move in to cater for the growing number of residents and you can quickly find yourself living in the midst of hotels, petrol stations and supermarkets.

Remember, having these types of amenities nearby is a great way to generate long term growth from an investment, but having them right on your doorstep (along with some of the less desirable social elements they can attract), is guaranteed to see the value of your property decline.

2. Minimising your prospective re-sale and rental market

While we always preach to clients that you should hold property for the long term and never sell, restricting your potential re-sale market will have a detrimental effect on your investment’s value.

Remember, with 70% of all Australians buying or owning their own home, it is ultimately home buyers who determine prices.

As the saying goes, a property is only worth what a buyer is willing to pay.

Many home buyers and tenants have very specific requirements, particularly if they have children or pets.

Generally at the top of the list for families is a home in a quiet position, as busy streets with heavy traffic pose not only noise issues, but more concerning – obvious safety risks.

Then there’s the frustration your tenants will encounter trying to leave the property to get to work in the mornings. Ever tried reversing out of a driveway into the chaos of peak hour commuters?

3. Marketing issues

Even if you wouldn’t mind living on a main road, most people would.

So it will always be hard to sell your property and it will frequently take much longer to sell it.

Agents hate listing main road properties, because they find them hard to advertise and loathe having to explain to buyers why this main road property is different and they really need to inspect it.

Additionally, most open for inspections are late on a Saturday afternoon or on a Sunday when the traffic has eased.

However, if it is inspection by appointment only, agents might restrict available times to the middle of the day in order to avoid peak hour, which makes it inconvenient for potential buyers or tenants to attend and can again restrict your market.

Sure people live on main roads – people live everywhere. And in boom times when there are more buyers than properties for sale, even secondary properties sell.

But during the slower times in the property cycle (and there are as many of these as the boom times) properties in secondary locations just don’t sell, or if they do their vendors have to give them away at a bargain.

And it’s much the same with tenants – you’ll have a wider selection of potential tenants willing to pay you a higher rent if you buy off the main road.

4. Higher vacancy rates

While a property manager might be able to “sell” a property on a main road to some tenants, historical data suggests that it doesn’t take long for them to tire of the incessant issues posed by the property’s position and decide to move on as soon as their lease expires.

Generally, main road dwellings have a higher tenant and owner turnover than properties in quieter streets.

So even if you intend to hold your investment for the long term, you could find yourself facing extended vacancy periods and therefore substantial losses.

There is no question that buying on a main road can greatly reduce your buyer and tenant market and not only affect your potential long term gains, but also your rental return.

Sure, properties on main roads might occasionally look good on paper and in a booming market they can even generate good prices as overly eager buyers want to snap up a property at a seemingly “great price”.

But when markets cool, as they inevitably do, so too does interest in main road real estate.

Remember, property investing is all about consistent, long term growth and you just won’t achieve that unless you buy in the best possible position.

Want more of this type of information?

Shannon Davis


Shannon is director of Metropole Properties Brisbane and as a successful property investor and licensed estate agent, his years of industry experience helps his clients maximize the performance of their investment properties. Visit www.BrisbaneBuyersAgent.com.au

'Why main roads are a real estate no-no' have 10 comments

  1. February 14, 2014 @ 6:38 pm Rebecca

    Could not agree more! Unless your buying an apartment in the CBD, I wouldn’t do it!


  2. January 14, 2015 @ 8:47 am Milan

    I disagree with you. There are many homes on the main road you could have bought 10 years ago for well below surrounding properties off the main road were selling. Now when the areas have been re zoned for high density they sell 50-100% above the rest.


    • January 14, 2015 @ 5:21 pm Michael Yardney

      Clearly you are right – if you own a property that can be rezones, and that was part of the reason behind your purchase then you would have done well.
      But what what about those who bought apartments on main roads who don’t benefit from rezoning?


      • January 14, 2015 @ 10:18 pm Milan

        That is true with apartments and units Michael. I don’t think I would be very interested in property on the main road with out any twist (as you call it).


        • August 22, 2015 @ 10:50 pm Brad

          I own a property on a main road and it has doubled in value in the last two consecutive 6 year periods (I.e. it is now valued at 4 times what it was worth 12 years ago). Nothing special about the property (e.g. zoning or expensive renovations). Not bad for a “no-no” investment.


          • August 23, 2015 @ 3:34 pm Michael Yardney

            Well done Brad – thanks for explaining that.
            However in general when the market turns down, secondary locations including main roads are harder to sell adn harder to rent – but of course here are always exceptions

  3. October 10, 2015 @ 11:43 pm Janice

    We have always adopted the same no-no policy. But right now we have fallen in live with a property on a main road, moderate local traffic, in an upcoming suburb. The house meets all our needs and also close to our daughter’s school, my work and public transport (tram is one street up, but not on our road). It is deeply setback so noise is not bad at all. The asking price is above $1.6m for a 730m2 block. What we are worried is the resale value in future… Do properties on main roads in exclusive suburbs in Melb, eg. Camberwell, Surrey Hills, Canterbury, Mont Albert, Balwyn face the same problem?


    • October 11, 2015 @ 2:58 pm Michael Yardney

      Janice – people live everywhere – on main roads, on busy corners, everywhere.

      In good times everythings ells and leases, but in bad times, or when there is an oversupply of properties, secondary property sell or lease much slower (and sometimes not at all)

      Most people who wnat to live in the suburbs you mention, will want premium accomodation – you are right to be concerned – avoid main roads – they will only get busier in the next 10 years


      • January 16, 2016 @ 10:29 pm SA

        Hello All – very interesting discussion!

        Although in general, the “avoid main roads” policy is very sensible, there is a counter argument in that since all property zoning has been more-or-less fixed as of July 1st 2014, the number of growth zone/ mixed use/ commercial sites is a finite number.

        There are many reasons which determine what density you are allowed to put on a particular site but one of the most important is neighbourhood context.

        In general, more commercial and higher density uses will cluster towards main road sites creating further opportunity for higher densification.

        I currently am buying, and will continue to buy, main road sites as a mid-long term play towards a rapidly diminishing pool of developable sites in quality inner city suburbs.


        • May 21, 2016 @ 8:35 pm Helen Campbell

          I would never buy an apartment on a main road. Health comes first. Pollution and traffic noise can cause a lot of stress. I viewed a property recently on a busy main road and could hear the traffic with the double glazed windows closed. The property has been on the market for three months now and needs a new bathroom but the vendor wants almost the full asking price whereas my property which is in a very quiet London Street sold immediately for the asking price. Nothing special about my property. It just happens to be surrounded by quiet roads and very close to excellent transport links.


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