There are genuine concerns about the impact that natural gas development might have on property values.
Some have claimed the values of land and homes will be negatively impacted, while others claim there is no impact at all.
In order to better understand the situation, the Valuer General of New South Wales commissioned a report examining the sale of properties in areas of NSW where the Coal Seam Gas industry is developing and operating.
What the report found may surprise those who claim CSG hurts land values.
The Valuer General found CSG development had “no impacts” on several recent real estate transactions.
“A total of eight property transactions with CSG well activity located on the property were investigated through conventional valuation sales analysis. From the analysis the value of all of these properties did not appear to have been impacted by CSG activity.” – Study on the impact of the Coal Seam Gas industry on land values in NSW February 2014, p. 40
Furthermore, areas ranging from 200 metres to 38 kilometres where CSG development is taking place also showed no adverse effects on land values.
“A total of 53 comparable sales located at distances from 200 metres to 38 kilometres from CSG activity were analysed. There was no observable difference in the values of the comparable sales based on their distance from the CSG activity.” – Study on the impact of the Coal Seam Gas industry on land values in NSW February 2014, p. 40
In addition to established home sales, subdivisions also seem to be immune to the claims that such development depreciates land values. Two separate subdivisions were analyzed in the study and the researched concluded,
“The analysis of sale prices of single residential home sites at two subdivisions located in view of or in close proximity to CSG wells indicated no impact.”
When the report authors interviewed the sales agents of the subdivisions, both agreed CSG development had no impact on the pricing of the lots.
“The selling agents of the subdivisions advised that they did not engage in any discounting of properties because of their proximity to the CSG wells and that they did not consider values were impacted.”– Study on the impact of the Coal Seam Gas industry on land values in NSW February 2014, p. 24
While the development of CSG is not having an impact on land values in NSW, it is important to note that public perception may have a bigger impact on land values in CSG areas than the actual development.
“Some people dislike the industry and consider that it leads to the industrialisation of an area with the further potential for contamination and health risks. These perceptions can lead to a stigma developing in an area.”– Study on the impact of the Coal Seam Gas industry on land values in NSW February 2014, p.40
It seems the stigma left by those who are loudly protesting natural gas development pose more of a threat to land values than actual development.