(Near?) record new motor sales in 2015
Later this morning the ABS will release figures which show that sales of new motor vehicles for the year to December 2015 were at their highest ever level, or somewhere very close to it. As usual, I'll analyse the figures here.
This data series is of interest for more than one reason. Firstly, because new motor vehicle sales are a worthwhile indicator of economic health, as well as of household budget strength and confidence.
After all, very few of us would opt to buy a new car if we believed that our household budget is likely to be stretched over the year ahead, or if we lacked confidence in job stability.
Secondly, following trends in traffic usage is one of the ways in which I aim to steal an edge in the property market.
This is something I learned from London, where today properties located with 500 metres of a Tube station command a whopping 10.5 per cent premium or an extra £42,000 on average, according to research by Nationwide (and confirmed by pretty much anyone who lives and works in London).
Lest there was any doubt, a short walk to Woolies in Spring Hill this morning confirmed to me that as the population expands over time Australian capital cities are heading for the same fate, with the traffic banked up on Queen Street forming a seamless snake stretching from the Valley to the Victoria Bridge.
Congestion to worsen
Now you might justfiably say that you'd like to see statistics to back up my hunch.
In that context, the Australian Government's recent report "Traffic and congestion cost trends for Australian capital cities" presents some interesting base case scenarios for the avoidable cost of congestion for Australian capital cities, which is estimated to be around $16.5 billion for the 2015 financial year, having grown from about $12.8 billion for 2010.
Motorised passenger travel within Australian capital cities has already grown tenfold since 1945, with the urban travel time for capital city residents rising to 85 minutes/day per capita across the last decade (which is "miles" above the historical average, pun to be pardoned).
Projections of the associated costs of metropolitan congestion rise dramatically to around $30 billion by 2030, with total projected vehicle-travelled kilometres travelled expected to increase by around 2 per cent per annum through until 2030.
Traffic delays are expected to increase at a broadly comparable rate of 2 per cent per annum, the cumulative impact of which will be dramatic.
The consequence will be greater congestion, particularly in the four most populous capital cities, with the cost impact to be felt most keenly in Brisbane and Perth from a percentage increase perspective, based upon upper baseline projections.
Costs of congestion are also projected to approximately double over the next 15 years in Sydney, Melbourne and the other capital cities.
The component impact will come in the form of extra travel time and travel time variability, with inevitable distorting impacts on property markets.
In turn, I expect this to put pressure in inner suburban land values, and in particular the value of properties located close to direct light and heavy rail links to the city - which is exactly what we've seen play out in London over the years.
Conversely additional traffic on the roads of capital cities is ultimately likely to make fringe suburban dwelling comparatively less attractive, given that it can be impossible to reach employment hubs in under 45 minutes travel time, as found by Grattan Institute research.