As electric vehicles gain traction for their environmental benefits, there’s a hidden opportunity for the property market, says GHD Advisory’s Tristan Anderson.
EVs may only account for 0.2 per cent of total vehicle sales in Australia, but the electrification of our fleet is unstoppable.
Infrastructure Australia’s latest audit, published in August, finds that one in five of our vehicles will be electric by 2036, however others suggest it could be a faster uptake than this, particularly as a few major car manufactures have already put a date on the suspension of combustion engine manufacturing.
Globally, the electric fleet grew to 5.1 million in 2018, adding an extra two million vehicles in just one year. In China, which produced 29 per cent of the world’s cars in 2017, 1.2 million EVs were sold last year. This accounted for 60 per cent of the global EV market.
Many governments are incentivising the adoption of EVs, and others are phasing out internal combustion engines. Meanwhile, car manufacturers are planning to pour $446 billion into EVs over the next five to 10 years, according to Reuters.
Tristan Anderson, GHD Advisory’s logistics and infrastructure policy leader, says whisper quiet EVs will transform noisy transport corridors into high value development opportunities.
EVs are much quieter than their ICE counterparts – so much so that EVs sold in the European Union must make fake noise under certain conditions to warn pedestrians, Anderson says.
Automated EVs will be even quieter, “leading to less heavy acceleration, engine breaking and the odd tire squeak”.
“Once all cars are autonomous there will be no surprises – our cars will know what other vehicles are doing a kilometre up the road, eliminating the need to slam on the breaks. Road surfaces can be smoother and wheels can be more efficient, reducing any noise to an ambient hum.”
Anderson says similar advances are also occurring in rail. Germany has introduced quiet technology to its national railway network that will halve levels of railway noise by 2020.
“Train wagons will be required to adhere to new noise standards, which means passenger and freight trains will create less noise than the current combustion engine car.”
So, what does a city with zero noise and exhaust emissions from transport mean for urban developments?
Anderson predicts the “largest structural land value shift since the advent of mass transit systems” may be ahead.
“The current land price decreases we see in and around major transport corridors may, in fact, reverse. This will not only affect adjacent land; it will also make air rights over our major motorways and rail lines very lucrative.”
“Infrastructure owners will see returns from related property development opportunities take an increasing share of future returns, and it is not totally inconceivable that roads will be majority-funded by the value created in air rights and associated urban integration opportunities.”
While the uptake of EVs in Australia has been lower than other developed countries, Anderson points to the Australian Electric Vehicle Market Study Report, which predicts EVs will match petrol vehicles on upfront price and range by the mid-2020s and “reduce barriers to entry”.
“The sound ‘wall’ has been a significant obstacle to urban development, particularly around busy transport corridors,” Anderson adds.
“In the past, that sound wall has prevented seamless integration of infrastructure and amenities, but that wall is coming down – and it’s very exciting.”