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No NBN effect on house prices – yet

Rebecca Thistleton

The NBN will not impact house prices until broadband becomes a more widely-used service that consumers have grown used to having – and are therefore willing to pay extra for, say property industry experts.

Deputy Prime Minister Anthony Albanese said that under the Coalition’s fibre-to-the-node model, households would have to pay $5000 to have the NBN brought to their door, which could wipe $5000 off the house prices of homes which have not yet had the service installed.

Economist Linda Phillips, from Propell National Valuers, said the jury was still out on whether the technology could change house prices.

“While there is speculation it is adding value, and may have done in some cases, Propell valuers don’t yet have a consensus on whether it does, or will do in future,” she said. “As for the figure of $5000 mentioned in the press, considering the median house price is around $500,000, it would be difficult to isolate the cause of a price movement as small as $5000.

Andrew Wilson, senior economist for Australian Property Monitors said the NBN roll-out was still in its early stages. Not enough people were using the technology to have reached a level where it was in demand. He said the $5000 price difference debate may have merit but, for now, buyers did not see the value in it – nor did they expect to pay less for a home without it.

Dr Wilson said it was still an emerging technology rather than a mainstream amenity people needed or expected to come with their homes.

Ubertas Group’s Art on the Park project was among the first high-rise developments in Melbourne’s CBD to be built with NBN connections.

Development director Simon Barr said the tower had an advantage in Melbourne’s highly competitive CBD rental market and appealed to the main tenant demographics – highly educated professionals and international students.

He said the bulk of the 576 apartments were investor-owned and their success depended on their leasability.

“We can show them the connection point in their apartment and see their eyes light up when they realise they can have NBN access,” he said.

“It’s not at the point where an extra $10 can be charged on the rent, but with so much competition in Melbourne, it comes down to the bonus offerings.”

In new housing, Housing Industry Association spokesman Greg Weller said new homes were at a disadvantage because developers had to provide for NBN infrastructure during building, regardless of when the service would be available. He said that cost, which was hard to accurately calculate, was ultimately borne by the homeowner as it was added to the building cost.

Read more: http://www.afr.com/p/australia2-0/no_nbn_effect_on_house_prices_yet_qUaqveBLmcY9zz19qoD1XM

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NBN makes households $3800 a year better off: study

Phillip Coorey

The average household would be $3800 a year better off by the end of this decade due to lifestyle changes enabled by the National Broadband Network, including more people working and shopping from home, a new study has found.

The study by Deloitte Access Economics will be pushed heavily by the Labor government in the dying days of the election campaign, with the claim that Tony Abbott’s cheaper and technologically inferior broadband alternative will be nowhere near as beneficial.

“Tony Abbott will cut the NBN, denying millions of Australians access to the boundless educational health, lifestyle and commercial opportunities this infrastructure delivers,” Communications Minister Anthony Albanese said.

The study finds the $3800, which is in today’s dollars, would come about largely because people would stay at home more rather than go out to work, shop or even see a doctor.

The saving comprises $2000 per household in cheaper prices and higher wages due to a productivity boost to the economy worth $16 billion by 2020.

Another $634 would be saved per household through the increased use of teleconferencing and telework, meaning reduced travel for workers.

The report says the level of so-called telework would jump by 6 percentage points to 12 per cent by 2020.

In addition, growth in telework had the potential to increase labour supply and create more jobs.

The study attributes another $565 of the average household saving to ­e-commerce, or savings made by increased online shopping. That would be gained through reduced travel costs and cheaper online prices.

Travel savings of another $217 would come from people being able to access health, education and government ­services online, while $269 would come through greater reliance on online entertainment, and $74 through improved communications.

Deloitte stresses the study is not a­ ­cost-benefit analysis for the NBN, the lack of which has been a frequent Coalition criticism of the project. It also warns the figure is not necessarily a net gain.

“Added together, these estimates suggest very significant household benefits from broadband,” the report says.

“These are not net benefits and do not take into account the costs of broadband or related equipment. Equally, they do not include many other potential benefits from applications and services that have not been thought of yet,” it says.

The report attempts to break down the household benefit through 10 hypo­thetical case studies and in some cases, many people are better off than the $3800 per year.

For example, it claims older people could be up to $7000 a year better off because ­e-health would enable them to reduce the number of trips to the doctor and stave off the need to move into an aged care home.

It finds significant benefits for those outside the cities. “Those in regional areas . . . will be less likely to have to move for education and employment,” it says.

“Broadband, particularly in regional areas, will open up opportunities to allow regional residents to better participate in the digital economy.”

Read more: http://www.afr.com/p/technology/nbn_makes_households_year_better_3bINVyDMasl4AOuEYlPOWK

Guest

4 Sep 2013, 08:29 AM

Assuming the LNP win on Saturday what we will get in terms of broadband is what we would get anyway.

Leaving to one side of course the fantasy concept of laying a blue fibre cable to every existing house including every existing home unit.

Big Malcolm is laying blue fibre to EVERY new house – which may of course stimulate demand for new housing if the futurist fantasy descriptions of life with fibre are even slightly true.

He is also laying a blue fibre network to every street so there will be a superb backbone in place for local wifi spots – mobile cell towers and distribution points (nodes) for the legacy copper.

Because he is only laying the backbone it can happen a lot faster which means many more people who have no or crap connection now will get much better connection asap.

If the futurists are right and in 20 years there is demand for granny to be sending home made HD videos of body parts to the GP the cable guys can come back and lay fibre cable to every house as the backbone will be in place.

Keep in mind that at the moment the cable guys are unable to even keep up with new housing construction (those friends I know are still not connected in their new house in a new estate in Sydney – 5 months after moving in)

Relax – with Malcolm faster Broadband is going to come!