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Are the outer suburbs really cheaper in the long run?

One of the key factors many people consider when looking to rent or purchase a property is travel time; how long will it take to get from point A; their home, to point B; their place of work, where they shop, dine and go for entertainment and recreational pursuits.

At present, the only real way to work out the time and cost of commuting between home and other regular destinations has been to do the legwork yourself – literally. You’d have to hop a bus, train or tram or jump in the car and do the old fashioned kind of research.

However a report in the Sydney Morning Herald reveals, that under a system that’s to be trialled in the US, homebuyers would have the ability to log onto a website, list the properties they are considering and automatically calculate travel costs and time.

Although the system was initially intended for US property punters, its promoters say it has relevant application to Australia and would allow house hunters to calculate whether saving money by purchasing a home in the outer suburbs was offset by higher travel costs over the long term.

Assistant secretary of Housing and Urban Development in the Obama administration and economist, Professor Raphael Bostic said, ”You want to have something that you could apply to everyone, not just to people who live in Sydney or Brisbane but for everywhere else in the country.”

He said the introduction of a “housing-transportation-index”, which would show the average cost of a daily, weekly or monthly public transport ticket, or the cost of petrol to commute between home and work, retail centres and schools, would give purchasers the opportunity to make more informed buying decisions and could conceivably change the shape of our cities into the future.

”When people think about buying a house, they often think the only cost they need to worry about is the monthly payments,” he said. ”But that’s not true because housing costs are correlated with how close it is to the urban centre. While the cost of housing goes down the further you move away, the cost of transportation goes up.

”To think about the housing without the cost of transport means you’re solving the problem with only half the information. Where you want to get to, ultimately, is a system where, when a house is for sale, it gets announced … Maybe there’s a website with a list of the community’s average housing plus transportation numbers.”

”We’re hoping it may lead to a change in the spatial distribution of where people choose to live and ultimately affect development patterns,” he added.



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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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