A recent study by PropTrack and Ambient Maps has unveiled the financial impact of transport noise on property values, revealing that homes near high-noise areas such as highways, railways, and airports can be up to 18% cheaper.
This world-first report demonstrated that while buyers can save substantially in noisier environments, the cost comes with considerable downsides.
The study, part of PropTrack’s initiative to integrate ESG factors into its Automated Valuation Model (AVM), highlighted that different types of noise have varying effects on property prices.
Aircraft noise leads to the steepest decline in property values, with properties experiencing a 6-9% price drop for every 10-decibel increase in noise.
Traffic and rail noises also contribute to lower property values but to a lesser extent.
Homes near frequent freight train routes suffer more significant value drops due to the intense noise levels without the benefits that accompany passenger rail proximity.
Kevin Ward (pictured above), PropTrack’s executive manager of data science and analytics, stated that the comprehensive study’s findings, based on a large dataset spanning various property types and demographics, suggest that noise impacts on property values observed in the study are likely generalisable across the country.
Ben Hinze (pictured right), co-author and director at Ambient Maps, said that their noise models use terrain and building data along with traffic, train, and aircraft movement details to assess noise levels at each dwelling’s facade and level.
The comprehensive study evaluated 3.7 million properties across metropolitan and regional Victoria, integrating sophisticated noise modeling from Ambient Maps with PropTrack’s automated valuation model.
The report also discussed the nuanced buyer perspectives regarding noise.
While some home buyers are deterred by the prospect of living in loud environments, others may view these properties as more accessible entry points into the market.
“For individuals entering the market, properties affected by noise might seem attractive because they present a more affordable entry point,” Ward said.
“Quieter homes are on average more expensive and may be out of reach of first-home buyers, although they may be an achievable next home upgrade when moving up the property ladder.”
Hinze noted that the data indicated buyers are prepared to pay a premium for quieter living environments, especially in areas with lower nighttime noise levels.
“It’s not just a penalty for high noise, it’s a financial benefit of having those areas of quiet,” he said.
Real estate agent Nathan Lang said that noise plays a more significant role in pricing within the higher end of the market, where buyers are less willing to compromise.
Beyond property values, the PropTrack study shed light on the broader implications of living in noisy environments.
Chronic exposure to high noise levels is linked to various health issues, including cardiovascular diseases and cognitive impairments.
It also affects rental property turnover rates and could influence future urban planning and infrastructure projects.
As cities continue to grow and new infrastructure projects emerge, understanding the impact of noise becomes increasingly vital.
While such developments can enhance local amenities, they also bring potential health risks and property devaluation due to increased noise.
This dual impact necessitates a balanced approach to urban planning and property investment, considering both the economic benefits and the well-being of residents.
This pioneering report not only guides potential buyers in making informed decisions but also urges urban planners and policymakers to consider the profound effects of transport noise on residential areas.
