Cheap Flights Boosts Property Sales

It’s an established fact that the introduction of new cheap flights by budget airlines can cause an influx of foreign property sales, but when you’re keeping an eye on future market prospects, don’t forget to look out for other new transport links too.

The impact of cheap flights on property is commonly called the, “Ryanair Effect,” as a rise in the value of property often correlates with when a new budget airline route is introduced. For example, it’s already happened in parts of France and Spain which have been significantly opened up by easier airline access and property prices have soared. Looking out for the introduction of new routes for budget airlines is definitely a tip worth keeping in mind if you’re a savvy investor looking to make money and be one of the first to buy in the next ‘hot spot’ area. But as well as keeping an eye on flights, you’d be wise to look at all developing areas of transport.

Take the Italian ‘treno ad alta velocità’ or TAV high speed train service. The service already exists much of the way between Rome and Naples and part of a new route between Milan and Turin opened two years ago. By the end of 2009, the rest of the route and the whole Milan to Rome service will be complete and fully functional. In the same way that new airlines boost property, so too can new train routes.

In fact, experts say prices can rise significantly within a few years. “There is a 30% to 40% rise in the real estate values in a few years after opening a new station,” says Carlo de Vito, from the rail company Trenitalia, who are investing €2.5 billion in the renovation of stations in Milan, Rome and Turin and building new stations in Naples, Florence and Bologna. “A new station near the centre of a city makes that area more appealing to commuters and the same is likely to happen with the high speed train.”

As well as increasing popularity with commuters and local workers, the new high speed train service is also likely to open up opportunities for holiday home rentals – both for Italians and foreigners, which is great news to investors. Areas around the coast will also become more easily accessible. As completion isn’t due until the end of 2009, there’s plenty of time still left to explore the various property options available in the areas affected by the new Italian train route.

When the high speed train is completed, it will significantly cut travelling times. A trip from Milan to Turin, for example, will be reduced from 1½ hours to just 50 minutes.