Consider two identical residential properties: they share the same land size, building type, and they are located on the same street with identical views. Despite these similarities, one property is situated close to a major road at the end of the street, while the other is in a quieter locale, distanced from significant traffic thoroughfares. Anecdotal evidence suggests that residences in quieter areas tend to possess higher market values. However, accurately quantifying this variance and predicting future value fluctuations in light of new infrastructure developments has proven challenging.
PropTrack has partnered with Ambient Maps to release a comprehensive study examining the impact of transport noise on residential property values across Victoria. This study is part of a broader effort to integrate environmental, social, and governance (ESG) factors into PropTrack’s AI driven Automated Valuation Model (AVM).
Noise pollution, particularly from roads, rail, tram and air traffic, plays a significant role in influencing property desirability and market value. Traditional valuation methods often overlook these environmental factors. PropTrack and Ambient Maps' integration of noise data fills this gap, providing a more comprehensive assessment that considers the property value impacts of environmental noise exposure.
Ambient Maps contributed detailed noise modelling data, which was integrated into PropTrack's AVM using advanced AI techniques. This integration accounted for noise from multiple sources, including road, rail, tram and aircraft, ensuring a comprehensive view of environmental noise exposure throughout the day.
The study revealed that properties exposed to higher noise levels, such as those near busy highways or airports, tend to experience lower values. The study found that road traffic noise can lead to an average property value decrease of approximately 6% for each 10 dB(A) increase in noise levels, with variations depending on increasing levels. Noise from rail, including trams, showed an average property value decrease of about 4% for every 10 dB(A) increase, once benefits of proximity to stations was considered. Larger negative impacts are associated with freight rail noise alone, presumably because whilst there are fewer movements compared to passenger services, the noise levels are typically louder and there are no amenity benefits. Aircraft noise had the most substantial impact, with property values falling between 6% to 9% for every 10 dB(A) increase, indicating a 12% to 18% decrease when comparing properties outside flight paths to those directly underneath. This comprehensive analysis underscores the importance of integrating noise data into property valuations, offering valuable insights for buyers, investors, and urban planners.
This research indicates that property values may decline in response to noise levels from increased traffic flows from new infrastructure such as highways, railway lines, or airports, which can decrease the desirability of nearby properties.
This advanced methodology using AI offers a deeper analysis than previous studies, producing insights that are invaluable for stakeholders across the real estate industry. The research demonstrates that the detailed modelling employed by PropTrack and Ambient Maps provides a precise understanding of noise impacts on property values.
For homebuyers, awareness of noise exposure is crucial for making informed decisions. Insights from this research collaboration can equip buyers with essential information on environmental risks, helping them to select properties aligned with their lifestyle preferences and investment goals. Investors can leverage these insights to assess risks and returns associated with properties in noise affected areas.
Urban planners and developers can benefit significantly from noise data insights and incorporate them into their planning processes. The AI and data driven approach used by PropTrack and Ambient Maps could be used as an input to the design of quieter and desirable homes, enhancing community well-being and market stability.
Real estate agents can use the insights to gain a comprehensive understanding of noise impacts, factoring them into market appraisals and enabling them to provide better advice to clients. By understanding how noise influences property values, agents can offer more informed guidance to buyers, sellers, and investors.
The research in integration of noise data into PropTrack’s AI powered valuation model is a unique technical advancement and represents a shift in property valuation. By highlighting environmental factors that affect property values, this initiative aligns with modern demands for transparency and sustainability in real estate. It provides a model for future advancements in property data analytics, advocating for the inclusion of comprehensive environmental assessments in valuation products and services.
PropTrack and Ambient Maps are committed to further research into the impacts of environmental factors on property values. Future studies aim to explore additional elements such as air quality and green spaces, offering stakeholders comprehensive insights into sustainable property investment and development. Future integration of noise data into the AVM will mark a significant milestone in property valuation and provide stakeholders with invaluable insights into environmental factors affecting real estate markets. This effort underscores a dedication to innovation and excellence through AI, aligning with the broader vision of driving sustainability in the property sector.
Incorporates or developed using Geoscape Geocoded National Address File (G-NAF) ©Geoscape Australia 2024 Copyright and Disclaimer Notice
PropTrack and Ambient would like to thank Angela Maroske @ AM Design Co. for vision of and input to images used.
