If the commute time to the nearest economic center decreases, the value of the real estate increases. A new study identifies several regions likely to benefit from this effect in the coming decades.
Many transport infrastructure projects will only be operational in 10 to 30 years. This opens up opportunities for real estate investors with a long time horizon.
“Location, location, location”: The location is one of the most important factors in the price of a property. But the quality of a location can also change. It can deteriorate if, for example, a large employer relocates from a region – but it can also improve, for example if a transport infrastructure project significantly reduces commuting time to the next major economic center.
Thanks to new railway lines, tunnels or bypasses, previously more peripheral communities can become viable places of residence for commuters over the years, which has a positive effect on land prices. The real estate economist Matthias Holzhey from the major bank UBS explains that a location becomes interesting from a commuting time of a maximum of 60 minutes. Less than 10 percent of employees accept a longer commute to work.
The transport projects have not yet been reflected in the prices
As part of a new study, Holzhey and UBS economist Katharina Hofer have examined which regional real estate markets could be among the winners in the course of future transport projects. Based on data from the federal government, they have identified several regions from Winterthur to Biel that are likely to benefit from a reduction in travel time to the nearest economic center by 2040.
The findings are interesting for real estate investors and homebuyers. Since, according to the bank, the planned projects have not yet been reflected in real estate prices, there could be potential for appreciation in various places. After all, it often takes decades from the planning stage to the commissioning of a new transport infrastructure. The following overview shows the regions in which price increases can be expected.
Concrete road projects influencing real estate prices
- Of the Canton of Schaffhausen as well as the neighboring one wine country benefit from the expansion of the section of the A 4 between Kleinandelfingen and the Winterthur Nord junction from two to four lanes. This should improve the connection to the city of Zurich. The planned construction of a second Fäsenstaub tunnel should also have a positive effect, whereby the increase in attractiveness is primarily limited to the Schaffhausen region. The UBS economists assess the effect of the two road projects on real estate prices as “high”.
- Thanks to new bypasses Glarner Unterland and the Glarus hinterland also closer to Zurich, with UBS expecting a stronger effect in the lowlands than in the hinterland.
- Real estate prices in Northwest of the canton of Bern around the Biel region are likely to benefit in the coming decades from the full connection from Biel Nord to the motorway and from the unbundling of the Bern Wankdorf motorway junction. In the Erlach – Seeland area and in Biel, UBS estimates the effect on real estate prices as “medium”, in the Bernese Jura as “low”.
- In Ticino, the City of Locarno better connections to Bellinzona and Lugano thanks to a road infrastructure project. The big bank estimates the influence as “high”. The real estate economist Holzhey is most likely to expect a positive effect on the prices of second homes.
- To a lesser extent, they should Toggenburg and La Chaux-de-Fonds benefit from new bypasses; However, in the case of the Neuchâtel town, it is unlikely that the road project will lead to a boom, as the region lags behind in terms of location attractiveness for other reasons.
Railway projects affecting real estate prices
- Thanks to the planned Brütten tunnel, the journey time should be between Winterthur and Zurich by up to eight minutes. According to UBS, all those locations that get a faster connection to Zurich in this way should benefit from this; economists estimate the effect most strongly in the Thurtal and Wil regions a.
- Regions whose population exceeds the City of Zug commutes to Zurich can hope for shorter travel times thanks to the new Zimmerberg tunnel. The effect is said to be in the region inner swiss be strongest.
- Finally, improvements in regional transport are intended to connect some Municipalities near Lake Geneva to the metropolises of Lausanne and Geneva, with a modest impact on property prices.
Greater potential at more remote commuter locations
It is important to note that the forecasts are subject to uncertainties. Whether local real estate prices actually rise also depends on the initial situation. If a location such as the city of Zug is already very competitive and well connected to the nearest metropolis, the impact of the projects is less than in a region like Schaffhausen, which according to UBS still has a lot of catching up potential in this respect: “Most distant commuter locations are particularly good candidates for rising real estate prices, as they still have greater potential in terms of travel time savings. Locations close to the center with an already very good transport infrastructure, on the other hand, can hardly be improved in this respect.»
Planning uncertainties in the projects themselves, new regulatory developments such as driving bans in city centers or technological innovations such as autonomous driving can also influence the effect of a new tunnel or a motorway connection on the real estate.
Ultimately, the decisive factor is the population growth, which is influenced by the reduced travel time, the authors emphasize: “Real estate is more likely to become more expensive in regions with existing development potential; on the other hand, better infrastructure cannot always compensate for declining population figures.”