But one area investor is cautioning buyers from scooping up nearby properties, arguing flashy construction projects often become “ground zero” for more expensive projects, such as condo buildings in the arena district.
“New infrastructure is like throwing a rock in a pond: there are going to be ripple effects,” James Knull, an Edmonton-area real estate agent specializing in investment properties told CREW
“Real estate values are relative to neighbouring property. So when you have a major infrastructure project you will have a ripple effect outwards of value-add.”
He says investors should target not the arena district, but the neighbourhoods just a few blocks away that are going to be positively impacted by the values increasing.
“There are a lot of inexpensive properties just on the periphery of the arena district for sale that haven’t seen the value increase yet because the infrastructure isn’t completed.”
A new report by the Real Estate Investment Network said housing values increase on average 1.75 per cent for each 10 per cent decrease in distance from a stadium, with the positive price increase being highest for homes in closest proximity to the stadiums and decreasing gradually outward within the radius.
Don Campbell, senior analyst with REIN, said the report is of particular interest in Alberta where a new hockey arena is being built in Edmonton and a new arena/stadium is being proposed for Calgary’s West Village.
Knull also pointed out that spin-off infrastructure, such as the LRT line connecting NAIT to the arena in Edmonton, should be of interest to investors.
“Targeting the LRT makes sense as it will increase land values around stops,” he said.
On the negative side, living close to a major facility like a new arena is not for everyone and properties nearby may experience a depreciating effect, according to the report.
“Your quiet neighbourhood turns into a very congested one very quickly and on a regular basis,” Phil Wazonek, an agent at Distinct Realty Services told CREW
“I would look at each property on a case by case basis. I don’t think you can make a blanket statement that all properties will increase in value if they are located close to the arena.”
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A new report that says construction of new arenas and stadiums have a positive impact on real estate values for nearby properties is good news for investors in Edmonton and Calgary, but experts advise would-be investors to have a look at established areas further out and not just on new construction across the street.