Yahoo Finance Immediate impact for Aussie homeowners in controversial nuclear plan: 'Concerning'
House prices in towns with reactors could plummet, but there's one property section which will likely surge.
Nuclear power plants could be built in seven cities across Australia. For those in the surrounding suburbs the decision will impact the value of their homes.
Ray White's chief economist Nerida Conisbee told Yahoo Finance that the reactors' construction could bring good and bad news for homeowners and investors. The stigma associated with nuclear waste would also change the way people view the areas they pop up in.
In the short term rental prices would likely spike because skilled workers with high salaries will need housing.
“We see it in mining towns. When a big open-cut mine is built it does lead to a surge in rents because people need to work there,” Conisbee said.
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But in the long term, property prices will likely fall behind other suburbs.
That was reflected in a UK study by Barrows and Forrester Real Estate in 2023 which found homes in close proximity to reactors had prices between 14.6 and 25.8 per cent lower than those in neighbouring towns.
“We do see in Australia there’s a big fear of nuclear energy, even though it could solve a lot of our energy problems," Conisbee said.
"At a suburb level, I think it would create a massive outcry… people generally would be very averse to living near a nuclear reactor."
Ripple effect of deadly disasters and The Simpsons
Conisbee said historical disasters in Chernobyl and Fukushima have rightly led to concerns about nuclear waste contamination.
But it’s not just news events that have sullied nuclear’s reputation.
Pop culture has also stigmatised the sector – particularly the famous three-eyed fish pulled from a river in the fictional town of Springfield in The Simpsons.
“There’s a stigma, and also a fear of safety. I’m not surprised by the results of the report in the UK,” Conisbee said.
Where would nuclear reactors be built in Australia?
The nuclear energy plan was announced by opposition leader Peter Dutton on Wednesday, who said the reactors would be built on the sites of former coal-fired power stations.
It’s his solution to helping the country reach net-zero emissions by 2050.
The towns chosen by Dutton are:
Callide, Queensland
Tarong, Queensland
Liddel, NSW
Mount Piper, NSW
Loy Yang, Victoria
Muja, Western Australia.
Port Augusta, South Australia
Explaining his decision, Dutton said: "It will mean that on those end-of-life coal-fired power station sites, we can utilise the existing distribution networks.”
Property values could be 'immediately' affected
Speaking generally about the impact of large infrastructure projects on property prices, PropTrack Economist Anne Flaherty warned changes in value can happen quickly.
"We do know that when new infrastructure projects are announced or new facilities are announced in a given area that does have an often immediate impact on property values. It's often from the time of announcement, even before those projects are completed," she told Yahoo Finance.
"It's reasonable to assume if those power stations were to be approved in those locations, it is going to have an almost immediate impact on demand to buy in those areas."
She said the current speculation about building the reactors could lead to "concern" among owners and buyers, but there won't be a noticeable impact until the projects are "a certain thing".
Proximity to nuclear reactor will impact property value
Conisbee said there would be a boost in jobs, infrastructure and amenities in the towns the reactors are built, which would benefit those living in surrounding areas.
But, if the UK experience is repeated in Australia, those living closest to the reactors will see the most significant drop in property prices.
Explaining how the reactors could affect those living near them, Conisbee uses freeways as an example.
“Obviously if you're located right next to the freeway, that's going to be a negative on the value of your home," she said.
"But if you're two blocks back, and you don't hear the traffic, that connectivity is very, very positive."
“A lot of infrastructure is incredibly positive for property. You only have to look at the impact of a new rail line because people like living near public transport.
“The Western Western Sydney Airport has led to some real positive economic benefits that will continue because you're creating jobs and activity and better transport links.
"So suddenly, a part of Sydney that wasn't that easily accessible is now becoming very accessible.”
Will Australia get nuclear energy any time soon?
Whether Dutton’s nuclear energy plan comes to fruition remains to be seen.
The Climate Council clean energy advocacy group called it a "fantasy with gaping holes".
The CSIRO predicted nuclear would be at least 50 per cent more expensive than solar and wind, and could not be brought in until 2040.
Federal Treasurer Jim Chalmers savaged Dutton’s nuclear aspirations.
“This might be the dumbest policy ever put forward by a major party. It is the worst combination of economic and ideological stupidity," he said.
Environment non-profit Australian Conservation Foundation has also warned most of Australia’s leading insurance companies will not cover damage caused by a nuclear disaster.
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