New infrastructure projects are a key factor driving up the value of houses in suburbs around the country but they are often ignored by property investors.
Property valuer and analyst Suburbanite’s Anna Porter has looked at six areas where there is either new infrastructure being built or recently completed that she expects will help continue to drive rising property values.
Adelaide is benefiting from multiple major investments in infrastructure, which will more than compensate for the downturn in manufacturing in recent times Ms Porter says.
The number of big projects is impressive. They include expansions to the Adelaide airport, based on the government’s 30-year master plan, which require $1 billion to be spent in the next five years.
There are also upgrades to Adelaide Riverbank, a $1 billion redevelopment encompassing 380 hectares around the River Torrens that coincides with the Adelaide Oval upgrade, consisting of three key precincts; the health and wellbeing precinct, the core entertainment precinct and the cultural and education precinct.
Then there is the new Royal Adelaide Hospital, located close to Adelaide’s CBD which was completed in early 2017. And on top of all that Adelaide is to be the hub for Australia’s future submarines construction contract.
The most recent data from outgoing SA Defense Chief Andy Keough reveals that there is an anticipated job creation of around 6000 to Adelaide off the back of this project.
2. Liverpool, NSW
That has been a lottery win for “poor man’s acreage”. But slightly closer to the city around Liverpool in Sydney’s south west are also going from strength to strength with new projects such as the Moorebank Intermodal.
The construction of an intermodal freight terminal and port shuttle operation to and from Port Botany is set to deliver more than $11 billion in economic benefits and the creation of around 6,800 jobs, according to Moorebank Intermodal Company.
Ms Porter says that such investment has seen the property market in the local council area of Liverpool rise by 12.88 per cent according to Corelogic, for the 12-months to July 2016: (the period just after the commencement of the project).
“Such growth puts Liverpool in standing with markets closer to Sydney CBD such as the Inner West and Eastern suburbs.”
3. Gold Coast
The Gold Coast has traditionally struggled to keep pace with Brisbane’s growth rates, but infrastructure required for hosting the Commonwealth Games has created a construction boom.
Like Sydney CBD’s light rail project the Gold Coast had to recently endure the havoc such infrastructure creates on retailers and business.
However the Gold Coast’s light rail project has revived properties along its route. But the light rail was just one of a number of infrastructure projects for the Gold Coast.
There are also the Pacific Motorway upgrade, at a cost of almost $3.8 billion; the Gold Coast Rapid Transit system, at $1.8 billion; and a planned extension of the rail link from Varsity Lakes to Coolangatta, costing $1.2 billion.
Infrastructure relating to health services includes the $1.76 billion Gold Coast University Hospital and the Griffith University Health Centre at $150 million.
“This past 12 months has seen the Gold Coast outstrip Brisbane growth by a 1.62 per cent differential to the 12-months to July 2017.
4. Brisbane CBD
For the Brisbane CBD there is something in the order of $12 billion in “city-shaping” major projects slated or underway.
It is part of the reason why the Singaporean government’s sovereign wealth fund, GIC just bought, through Charter Hall, an office tower for $370 million despite the city’s office vacancy now well above historical highs.
The projects include Destination Brisbane Consortium’s development of the Queen’s Wharf worth about $3 billion.
The nearby mixed use Brisbane Quarter is also under construction and there are potential additions such as the highly politicised Cross River Rail project.
“A massive revamp of Brisbane’s CBD is set for completion in six years,” Anna Porter says.
5. South East Melbourne
South East Melbourne has seen significant infrastructure by way of transport benefiting the likes of areas such as Dandenong and Frankston.
“Upgrades to transport from the Melbourne CBD to the area has seen a significant rise in buyers moving from the inner CBD locations to these outer areas,” Suburbanite’s Anna Porter says.
The big projects there include the Eastlink Freeway, which opened in 2008 and starts at Carrum Downs, connecting to the existing Monash Freeway, allowing for a 35 minute commute to the CBD.
The 2013 opened Peninsula Link Freeway, now connecting the Eastlink and Monash Freeway, allows access to both CBD and lower bayside suburbs.
The $115 million Bayside Rail Project, too, has provided easier and faster access to the south eastern suburbs of Melbourne.
There was also the construction of the $80.9 million Stage 3 development of Frankston Hospital completed and officially opened by the Minister for Health in early 2015.
“These projects have helped Frankston experience 19.5 per cent average growth for the 12-months to July 2017, outstripping nearby Port Phillip Council in Melbourne’s inner metro for the same period, at just 11.15 per cent.”
Despite the winding down of car manufacturing, Geelong is being looked after with several big new projects.
“Geelong has gone from being the laughing stock of Melbourne,” Ms Porter says, “The council went into administration, but Geelong has become one of the powerhouses of the Australian property market.”
Geelong has seen its fair share of major projects including the major upgrade to Geelong Hospital, receiving funding from both the Federal and State government to the tune of $128 million.
Collaborative partnerships have also created several major projects worth about $2 billion in new investment to the region including the $1 billion Avalon Freight Precinct which will become Victoria’s largest, lowest cost interstate seaport, road and rail freight terminal.
There is a $600-$800million high-security water infrastructure spend that will “drought-proof” the region; a $300 million investment at CSIRO’s animal health laboratory in Geelong and an injection of $70 million into Deakin’s Carbon Nexus research centre will further drive opportunity for the region.