A QUARTER of a million home owners would see the value of their properties fall if the federal government approves an expansion of development restrictions under the flight path.
The dire forecast by the property industry - sections of which believe house prices could tumble by 10 percent - has been sparked by the revelation that the National Airports Safeguarding Advisory Group is debating whether to revise the way aircraft noise restrictions apply. The group will report to the federal Minister for Infrastructure and Transport, Anthony Albanese, next year.
Minutes of committee meetings, obtained under freedom of information laws by the Urban Taskforce, which represents leading property developers, state there is a move to dump the current measure, known as the Australian Noise Exposure Forecast (ANEF).
If an alternative system known as N70=10 is adopted, restrictions that forbid private housing developments in areas close to the airport would be expanded to encompass a further 93 square kilometres of the metropolitan area.
The world's largest commercial real estate services firm, CB Richard Ellis, maintains a ''financial impact'' would be felt in suburbs including Coogee and Pagewood in the city's east, Drummoyne and Ashfield in the inner west, and Burwood, Rhodes and Rosehill in the west, if the government overturns the aircraft noise system.
The company estimates between 170,000 and 230,000 homes would be affected, based on 2006 Census data, but says the figure could be higher.
The report states that ''the financial impact on existing home owners would vary but some of the most immediate impacts could be as follows:
Decreased 'marketability' to properties designated within a 'noise-affected' area.
Reductions in property values due to the impact of being in a 'noise-affected' area.
Increased sales periods due to the 'marketability' impacts.
Reduction in desirability of investment properties by tenants and a corresponding potential reduction in rental income.''
CBRE also raised the prospect of ''negative changes'' to the demographics of the suburbs affected, with cheaper rents and increased costs associated with renovating existing properties to comply with higher noise requirements.
The chief executive of the Urban Taskforce, Chris Johnson, a former government architect, said: "This could lead to thousands of existing homes becoming devalued through having an unacceptable noise zone listed on their land title.''
A letter from Mr Albanese sent in May to the NSW Planning Minister, Brad Hazzard, said the government was keen to avoid any ''sensitive development under flight paths'', specifically where residents are exposed to more than 60 decibels - the key noise level associated with the N70=10 measure.
Any overhaul could also threaten major developments such as the 20,000-home Green Square development and further housing around Olympic Park and Rhodes, potentially undermining the NSW government's metropolitan plan to increase housing density.
A spokeswoman for Mr Albanese said while the minister could not comment on what the committee might propose before it reports, no changes were afoot.
''As the government stated in its 2009 Aviation White Paper, it will retain the current aircraft noise system in airport master plans for planning around leased federal airports.''
The state government is more concerned. Mr Hazzard said in a statement: "I have only been given preliminary information from the federal government and have to clarify whether or not the federal government is proposing these changes for Greenfield as well as infill sites. Obviously if it is for infill (established areas) it does present problems, particularly for cities like Sydney. Some of the areas in high demand in Sydney may get caught up in this regulatory change - so we will be working with the federal government on this issue."
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