A handful of locations across Australia will see property prices boom as major construction and infrastructure projects kick off.
As part of the 2020-21 Federal Budget, the Morrison Government has dedicated $110 billion to infrastructure projects over the next decade as part of its drive to create jobs and lift the country out of recession.
According to hotspotting.com.au managing director Terry Ryder, these “shovel-ready projects” will also have the effect of creating a property boom in some areas.
There are two ways that infrastructure can impact property markets: great existing infrastructure, such as public transport, schools, medical services and retail outlets; and spending on new infrastructure, he said.
“New infrastructure is particularly influential on generating growth in residential property markets.”
“Our belief is that no other factor impacts property markets as strongly as major new infrastructure spending.”
According to Ryder, the following ten locations around Australia are set for growth thanks to infrastructure projects that are based there:
Badgerys Creek, NSW
This location is the site of the Western Sydney Airport, and has been earmarked to become an “economic powerhouse”.
The area will soon attract hundreds of jobs thanks to plans to develop an international university and education hub, a wellness and healthcare centre, a Westfield shopping centre and a “hi-tech logistics hub”, said Ryder.
“This constitutes a massive new jobs node and the availability of employment opportunities will drive big demand for housing accommodation nearby.”
On top of the $9 billion spent on the new airport, $3.6 billion will be spent on roads, $1.9 billion on a freight terminal, and $10 billion on health and education precincts and a Northern Gateway Development.
“Suburbs that are strategically located near the airport development are likely to benefit from the evolution of this precinct through rising property prices. Relative affordability has made the region popular with first-home buyers,” said Ryder.
This area in far Western Sydney is also becoming a favoured location for first-home buyers, with its property prices escaping most of the damaging effects of Covid-19.
“Extensive infrastructure spending – including road, rail and medical projects – add to the region’s appeal by generating jobs and improving the amenity of the area,” said Ryder.
In May last year, the North West Rail Link opened, connecting Epping, the Hills Centre and Rouse Hill. Blacktown will also be a beneficiary of the Western Sydney Airport and its new rail link, set to create 14,000 jobs.
The $2 billion Sydney Business Park based in Marsden has attracted major businesses such as Costco, Bunnings, Aldi, IKEA, Lindt and Home Hub. “Eventually, 17,000 jobs are expected to be created as the park becomes fully operational.”
In terms of property prices, most of Blacktown’s suburbs have long-term capital growth rates of around 7 to 8 per cent every year.
Additionally, the Government’s HomeBuilder scheme has also added to the uptick in property activity in this area.
Coomera, South-east Queensland
This region represents a “high-growth corridor” between Brisbane and Gold Coast, and is often dubbed the fastest-growing area in Queensland, said Ryder.
There are several residential buildings currently under construction in this corridor.
A number of recent large-scale developments include the $1.5 billion Coomera Town Centre, which includes a Westfield Coomera; another shopping centre, Pimpima City Shopping Centre; and the $2.4 billion Coomera Connector.
The Coomera precinct is expected to create 1,200 jobs during its construction, and more than 3,000 jobs every year after it is operational. Three new nearby schools will also add hundreds of new jobs.
The Gold Coast Marine Project is dedicated to manufacturing, servicing, repairing and refitting recreational boats and yachts, with the project set to create 8,000 jobs.
“Good transport links and convenient proximity to Gold Coast beaches, shops, nightlife and employment hubs make the Coomera–Pimpama area attractive to young renters and families, while providing good cash-flow opportunities for investors,” Ryder added.
Monash is home to a huge hospital and medical precinct, which makes it the biggest jobs hub outside of Melbourne’s CBD. The unemployment rate has consistently been 2 per cent below state and national averages for eight years straight, and in March 2020 was just 3 per cent.
About $1.5 billion has been spent on construction every year for the last four years, said Ryder.
“A construction boom is currently underway with a common trend being to knock down older buildings and replace them with larger houses or multi-unit developments,” he added.
Glen Waverley has undergone “major renewal and redevelopment” in the last few years, while the Clayton health and education hub is currently under expansion.
A new transport “super hub” will be built at Clayton thanks to the $50 billion Suburban Rail Loop, which will also revitalise surrounding areas.
The Monash National Employment and Innovation Cluster, which encompasses Clayton and Huntingdale, is home to 75,000 jobs – and this figure is expected to double in the next 30 years.
Port Augusta, South Australia
CBA’s latest state of the states report puts South Australia as Australia’s fourth-strongest state economy, driven by a pivot away from coal and towards renewable energy sources.
Two major renewable energy projects are nearing completion, while a $400 million solar farm has now been completed.
“The number of significant projects being targeted in and around Port Augusta has grown to levels that suggest that major economic growth is inevitable in this region,” said Ryder.
A British industrialist, Sanjeev Gupta, is also investing $1 billion in SA iron ore and energy sectors.
Combined, the various infrastructure projects spanning transport, education, resources and energy, and residential developments are expected to contribute around 3,330 jobs during construction and after the projects are operational.