Follow the infrastructure trail to find future growth suburbs
Seven years ago a real estate professional in Tasmania sent me a bottle of whiskey because he liked what I wrote about his area.
I don’t particularly like whiskey and I don’t want gifts for writing positive things about a location, because it carries a whiff of corruption. But it was an expensive brand of liquor and I do remember receiving it, the name of the person who sent it, who he worked for and the fact that I sent him a thank-you note – although it was seven years ago.
I’m certain that if someone sent me a $3,000 bottle of wine and I sent that someone a hand-written thank you note, I would remember it.
So I’m incredulous that some sections of the media are painting NSW Premier Barry O’Farrell as a noble statesman who sacrificed himself at the altar of ethics in politics after a memory lapse. Give me a break; he is merely the latest politician to be mired in the cesspool that is the Australian Water Holdings, which is shaping up as Australia’s Watergate. More big names will fall before this one has played out.
Favours to businesses and property developers, in return for gifts or party donations, are all too common in Australian politics. It’s the single most likely explanation for the unnatural enthusiasm of the Victoria state government for approving more and more apartment towers in a vastly oversupplied market, often over the top of local councillors who said ‘no’ to the project.
If you want to understand how the politics of property development work in Melbourne, read the novels of Peter Temple, which have been turned into a series of television movies starring Guy Pearce and currently running on ABC TV.
But back to New South Wales, which now has a new Premier. Whatever the reality of the Barry O’Farrell situation, there’s no doubt that the state economy and the Sydney property market have benefited from his governance.
For almost 10 years, most of it under an ALP government that gets my vote as the worst in my lifetime, the Sydney market went nowhere and was the chronic under-achiever of capital city Australia. Then last year it sparked to life and showed the first meaningful growth since 2003.
Suburbs will rise not so much because they’re near the airport, but because they have rail or motorway links that previously did not exist.
The single biggest difference is that money is being spent on infrastructure. As I have often remarked, infrastructure spending is the number one game-changer in residential real estate.
Until recently Adelaide, a city a quarter the size of Sydney, had more new infrastructure happening than did the nation’s biggest city. But now Sydney is receiving belated impetus from long-overdue spending on infrastructure, included rail links, motorway upgrades and hospital expansions.
Many investors are asking whether they’ve missed the boat in Sydney. The short answer is that they should have been buying in 2012, when prices were down and competition was scarce. The 2013 upturn was highly predictable – and now many areas have had double-digit annual growth. I would be focusing on regional areas of NSW with strong growth prospects and a much higher degree of affordability, including Wollongong and Dubbo.
The longer answer is that there is still more growth to come to Sydney and the key to finding it is to follow the infrastructure trail.
There will a considerable boost to locations out towards Rouse Hill as completion of the North West Rail Link draws closer. Plans to build the missing link motorway in the north of Sydney will impact suburbs in that area. And now a whole new series of impacts have been introduced with the possibility that the Badgerys Creek Airport may actually happen.
Don’t be in too much of a rush to exploit the airport plan, because the best clues about where to buy are yet to be revealed. The most influential aspect about that facility will be the transport infrastructure to be built around it – the road and rail links feeding into it.
Suburbs will rise not so much because they’re near the airport, but because they have rail or motorway links that previously did not exist.