Pod Insights The Property Academy Podcast NZ's 6 Biggest Infrastructure Projects – What They Do To House Prices About this episode A new road or railway sounds like a green light for property prices. But not all infrastructure is equal. Some projects open up whole new suburbs. Others just smooth a commute.
n this episode, Ed and Andrew run through New Zealand's biggest projects, testing each one against a simple question: Does it open new land?
You'll learn:
Which projects actually unlock new suburbs, and which just ease trafficWhat the research says infrastructure really does to nearby pricesThe Picton cautionary tale about buying into the infrastructure storyFollow the roads and rail... but only when they actually create new places to build.
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Transcript 0:08 Speaker 00 Hello and welcome along to the Property Academy Podcast by Obus Partners. I'm your host, Stephen Knight.
0:12 Speaker 01 And I'm Ed Nicola.
0:13 Speaker 00 And this is a show that helps Kiwis go from zero to five investment properties. So you could be financially free and stick around for the next 15 minutes because you're going to learn New Zealand's six biggest infrastructure projects, the new opportunities they create for property investors and the cautionary tales of the projects that promise big new opportunities, but actually turn out into nothing. So here is the test on all six infrastructure projects we're going to look at today. Do these six biggest infrastructure projects in New Zealand open up new land? Do they create new opportunities for property investors? Or does it just make a trip people already make a little bit less painful? Because that would mean two completely different things for an investor. One's going to create new suburbs.
0:58 Speaker 00 The other one just smooths out a commute. What's coming in at number six?
1:02 Speaker 01 So number six is the Belfast to Pegasus Extension. So this is a $1 billion, four lane motorway extension. Massive, a billion dollars.
1:12 Speaker 00 To build a road.
1:13 Speaker 01 To build a road. We're in the wrong gig. And so this goes from Christchurch up past Pegasus. And it matters because the Wimac is one of the fastest growing districts in the country. Is it third from memory?
1:25 Speaker 00 I can't remember exactly the ranking, but it's up there.
1:27 Speaker 01 It's in the top five, right? And the population's predicted to go from about 70,000 people to over 100,000 by 2054. Now, when this was announced by the Transport Minister, he said that it would unlock land for housing in the Wimac District because of course it's easier to get to. So places like Rangiora, Kaipoi, Woody and Pegasus, Ravenswood, they're all kind of closer to Christchurch from a commute standpoint. So if we apply the lens of, does this open up more land? Yeah, I think it does.
2:00 Speaker 00 And again, keep that test in your head because we're going to keep talking about it. But you also need to know that not every infrastructure project that gets announced actually gets built. But for this specific motorway extension going north of Christchurch, the physical work's already started, the diggers are on site, the consent's nearly done. That one's likely, very likely to actually happen. Now, coming in at the number five, we've got the Eastern Busway. Now, this is a $1.3 billion project in Auckland. And this is really trying to replicate the success of the Northern Busway. Now, for anybody outside of Auckland, you probably don't know about this, but one of
2:43 Speaker 00 the only, in my mind, really good public transport projects has been this Northern Busway. So basically what happens is if you're driving up on the Northern Motorway, going from Auckland Central up to the North Shore, once you get over the bridge, the buses have this separate road that they go on and nobody else can.
3:03 Speaker 01 I've driven on that by accident.
3:05 Speaker 00 No, you haven't. How did you get on it?
3:08 Speaker 01 I just, it's so hard to navigate my way around Auckland.
3:12 Speaker 00 No, it's not. You're just an idiot.
3:14 Speaker 01 Yeah, well, anyway, it was a quick, it was a quick drive back.
3:17 Speaker 00 Well, it would have been, would it? Did you get a ticket for it?
3:19 Speaker 01 I don't know.
3:20 Speaker 00 Oh, you would have, you would have. They wouldn't let anybody get away with that. And the amazing thing is so many of my colleagues and friends who live on the North Shore rave about the Northern Busway because there is always buses going. If you miss one, there's another one in five to 10, 15 minutes. Like they're always coming. It's really fast. And so often what you see is people will do a park and ride, they drive to the bus stop, zoom into town, and it's much, much faster than driving themselves, especially during peak traffic. And so East Auckland is going to get something very, very similar, which is going to mean it's much faster for people in suburbs like Botany, Pakuranga and Howwick, all of those
4:01 Speaker 00 East Auckland equivalents to have a quick journey into the city. This project is due in about a year. Now, you might think, well, surely, Ed and Andrew, this is just buses. It just means a slightly faster commute. But it turns out that the Northern Busway actually impacted the housing market on the North Shore, right?
4:22 Speaker 01 Yeah, and this is the one project where there's a proper New Zealand study on the impact of this infrastructure spend. So two Auckland uni researchers, they had a look at the numbers and their finding was that properties within 800 metres of the Northern Busway rose about 3.7% in value because of the infrastructure.
4:43 Speaker 00 So they reckon it was directly attributable to the Northern Busway opening up because it meant that, okay, if you're closer there, it's a bit easier to get into town.
4:53 Speaker 01 That's pretty significant.
4:54 Speaker 00 Well, especially because the North Shore's got pretty expensive houses. If you're talking about a million dollar house, that's 37 grand of additional value just because somebody else decided to spend a billion dollars on a, on a busway. And so while this one doesn't open up new land, it can also change what gets built around the stations. And keep that in mind because a little later on, we're going to talk more about that again in Auckland. But what is the fourth largest infrastructure project we're paying attention to?
5:26 Speaker 01 So number four, Ortaiki to north of Levin, there's a brand new state highway one just north of Carpentie. Now, what that's going to mean is it is a way faster drive from Levin down to Wellington. It's really going to unlock that space. And this is underway as well because diggers went in last year, opens in 2029.
5:46 Speaker 00 And this is one of the roads of national significance that the National Party has always been harping on about and pushing for it. Just bear in mind that this specific 24 kilometre new stretch of highway is going to be told as well. So it's going to be a faster trip, but it does come at a price. Now, if we think about what this could potentially do for property, I mean, what do you reckon?
6:09 Speaker 01 So this will cut 15 minutes off the trip between Levin and Wellington. And Levin is relatively cheap. Like I've got lots of investors who I know bought up here because of the affordability factor, but they haven't seen much in the way of growth and not a lot of rental demand. In fact, we had one of those investors on Case Study Sunday a few months back. But this is going to open up more land. In fact, that was the government's own pitch. And as a result, I do think it will have an impact on probably rental demand and, and housing demand.
6:40 Speaker 00 If we look at number three is the Hawkes Bay Expressway. Now, this is not as big in terms of money. It's about $600 million. And we started building this in November 2025. It's going to be due in about three years, so end of 2029. Though we all know that date's going to be pushed back, well, don't we? It ain't going to be the end of 2029, otherwise I'll eat my hat. Somebody's going to take that podcast, sip it in 2029, and they're going to send that to me and say, ha, it actually happened on time. You've got to eat your hat.
7:15 Speaker 01 There ain't no way.
7:17 Speaker 00 I'll do it on social media with a knife and fork. I have to do one of those, is it cake things?
7:23 Speaker 01 You know, I was imagining that in my head, but I didn't want to mention it because I thought you'd tell me I was ridiculous for watching that.
7:29 Speaker 00 No, no, that is a cake thing. It's endlessly fascinating.
7:33 Speaker 01 How do these people have time for that kind of thing?
7:35 Speaker 00 So if we look at the Hawkes Bay Expressway though, what is it? Well, basically we've got Napier Airport at the end of it, and we've got Hastings at the other. And so the idea is that we're just going to link up the, the Hawkes Bay Airport down with Hastings, make that much, much faster. Now, just keep in mind that people travel between these two cities, Napier and Hastings, already all of the time. So I don't think this one opens up any new land, like basically not one section. This is more of a reliability upgrade. Like worst case scenario, Napier to Hastings drops about eight minutes. So, so not too much in it.
8:16 Speaker 00 But my favourite fact about this road is that it basically only exists.
8:21 Speaker 01 Your favourite road fact?
8:22 Speaker 00 I like that you've got a road fact for you.
8:24 Speaker 01 Yeah.
8:25 Speaker 00 Is that this only, that's how we became the number one business podcast in New Zealand, Andrew. It's me, you and my favourite road fact is that it only exists because Hastings lost an argument back in 1961 about where the region's airport should go. Ultimately, it was built in Napier. And so the inquiry recommended all of those years ago, about 30 years before I was born, that they build a Napier Hastings motorway as the consolation prize. And about 65 years later, they're still four laning it.
8:57 Speaker 01 Well, that is a good road fact.
8:59 Speaker 00 But no, that is a good road fact, but let's come to number two. What is the second largest infrastructure project in New Zealand we're paying attention to?
9:07 Speaker 01 So this is the Cook Strait Ferry. So we're going away from roads now. This is almost a $2 billion infrastructure spend. 600 million for two ships and 531 million of it lands in Picton and 325 million lands in Wellington.
9:24 Speaker 00 That's for the portside infrastructure, isn't it?
9:26 Speaker 01 And the ships are meant to be active from 2029 again. We'll see whether or not that happens.
9:31 Speaker 00 Now, Picton's a town of about 5,000 people. So if you're saying, okay, we're going to put half a billion bucks into a wharf, into a town of 5,000 people, well, that's $100,000 of infrastructure spend per person in Picton. So you might think, oh my gosh, surely the Picton property market's about to bloody boom. But the thing is, the ferry's already stopped in Picton. So nobody's really going to get faster access to anything. It doesn't necessarily mean that we're going to have a faster commute from Picton across to Wellington. And it doesn't necessarily mean that there's going to be way more freight moving through Picton. Again, this is more of a reliability upgrade.
10:14 Speaker 00 But what the town will get for a few years is contractors needing beds. Workers being brought in to build this portside infrastructure, build out the wharf. But that doesn't necessarily open up any new land. But I also think that while $100,000 per Picton resident sounds like a lot of money, there's a bit of a cautionary tale with this one.
10:38 Speaker 01 Yeah, back in 2021, the Marlborough Council warned the terminal would stretch already tight housing supply. And by 2023, a local real estate agent was predicting rents were going to skyrocket. Because that makes sense, right? You're thinking, okay, if there's going to be an increase in demand and we're already finding housing supply tight, that's going to drive up the price of rent to maybe prices. Now, the whole thing ended up getting put on ice after about half billion dollars had already been spent.
11:05 Speaker 00 And it is not that the whole project got cancelled, but they were planning on building this massive terminal, right? And spending even more money, then the national government comes in and they scale that back, right?
11:16 Speaker 01 Yeah. And so of course, all those people who might've gone out and bought properties thinking, oh yeah, this is going to be the gold rush of Picton, probably end up not actually getting the result they wanted.
11:27 Speaker 00 And so the cautionary tale is that projects can get announced, they might even get started. But sometimes they can be scaled back and you don't get the true benefit you thought you were going to get out of it. Of course, there has been research that shows that when infrastructure is announced, that's when it has the biggest impact on property values. And as the infrastructure gets closer and closer to being finished, the value increase isn't as much. It's captured really, really early on. But what has never really been measured is what happens to house prices when infrastructure is announced and then eventually gets cancelled as well. But if we come to the number one largest infrastructure project in New Zealand,
12:10 Speaker 00 it's got to be Auckland City Rail Link. This is $5.5 billion worth of spending. It's opening in about three weeks. Do you know, I was recently in town, Andrew, in Auckland, and they're having big opening days for each of the different stations. So you can come and walk through it and have a wee looksee.
12:31 Speaker 01 Are you going to do that?
12:32 Speaker 00 Um, no.
12:34 Speaker 01 No, I knew you weren't going to.
12:35 Speaker 00 I had other things to do. I didn't, I mean, maybe I'll go on it just to have a little looksee and be like, what does $5.5 billion get you? I've grown out of my Thomas the Tank Engine phase of my life and so I don't.
12:46 Speaker 01 Collecting stamps now.
12:49 Speaker 00 Probably just offended the Trainspotters who listen to the show. There'll be some in here. Now, this is the largest infrastructure project the country has ever built. It doesn't necessarily open up more sections on its own. However, what the council is wanting to build around the train stations, not just the new ones that are opening, but ones a little further out because it's going to substantially cut the time it takes to jump on a train and get into town, especially if you are out in West Auckland way. The council wants to build many, many more apartment buildings around these train stations. And so I do think there will be some serious opportunities for the people who already own land there
13:31 Speaker 00 to potentially flog it off to a developer or develop it themselves and build some of these apartment blocks. They're not necessarily going to be the investments that I would jump into straight away since apartments typically don't increase in value as fast as houses or townhouses. But if you already own some land there, you're possibly going to do quite well with that. Having said that, I do think this opens up more opportunity way out in West Auckland way because if it cuts 10 to 15 minutes off a train trip in and you are out in Henderson around a train station, now all of a sudden, it's almost as if your house got moved 15 minutes closer to the city with that new infrastructure. So maybe it'll benefit it out that way.
14:14 Speaker 00 Probably won't have much of an impact on South Auckland's properties because to be honest, the City Rail Link doesn't really cut much time off if you're coming in from South Auckland. It's a major benefit if you're out west. But I know that you've been looking at some examples overseas to see what infrastructure does to a property's value.
14:32 Speaker 01 Yeah. So if you look at Singapore, a study of Singapore's Circle Line found that homes within 600 metres of the new station rose about 8.6% relative to the homes which were further away. And a similar study in Beijing showed a premium of around 5% of properties near railway stations. But the main thing actually that I probably would consider is if you go and buy a property and then you have a major infrastructure spend announced. Well, the study from Singapore in particular showed that, well, the effect of that infrastructure project announcement, that increase happens about a year before it opens. So you're kind of too late if you're, if you're going to go and buy a property now that you know that announcement's already been made.
15:17 Speaker 01 So you might get lucky and buy a property and then have an infrastructure project announced and have that increase. But actually, you're probably not going to be able to predict something that's going to have a major change in 10 years when something gets announced.
15:29 Speaker 00 Well, it's not necessarily that you've got to be ahead of the announcement. It's that you've got to be ahead of the opening. So the anticipation effects within that Singapore study was that they primarily happen a year before the opening. Now, if we think about the new line, the Pegasus to Christchurch extension going up there, that's been announced, works underway. However, it's still about three years away. So what you wouldn't do is say, okay, it's a month until that extension opens. Now I'm going to get in there and invest specifically because of this infrastructure. You'd need to be in at least a year before that opening if you were learning the lessons from that Singapore study. That's the message there.
16:10 Speaker 00 Not that you've got to get a glass and hold up your ear to the Christchurch City Council's private council meetings to try and understand what's going on there, right? But if you are looking for properties and weighing up suburbs and infrastructure, this is one of the things that we look at when we are choosing investment properties to recommend to investors. Because yes, you want to understand what's currently within the city or within the suburb. But you also want to know, well, what other infrastructure might be available to try and tip the scales in your favour? And if you want help building your property investment portfolio, that's the whole reason Opes Partners exists, to partner with you to build a wealth plan
16:52 Speaker 00 and then help you find investment properties that fit with your investment portfolio. And if you're into that, your first step is to book a portfolio planning session. I'll drop a link for that down in the show notes or just go to opespartners.co.nz and click that big orange button. Because over the last 15 minutes, you've learned about New Zealand's six biggest infrastructure projects, the new opportunities they create for property investors and the cautionary tales of the projects that promise big opportunities but turn into nothing. Right, let's wrap it up there. But please don't forget to rate, review and subscribe to the podcast. Really does help us get the message out to more people.
17:32 Speaker 00 Thanks for listening to the Property Academy Podcast. I'm your host, Stephen Knight.
17:35 Speaker 01 And I'm Adrian Call.
17:36 Speaker 00 We're going to be back here tomorrow with even more daily strategies, tactics and insights to help you get the most out of the New Zealand property market. Until next time.
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