What the north-west Sydney rail link means for property investors: Cameron McEvoy

As a born and bred Sydney resident of 30 years, I’ve watched over the progress (or, in many years, the lack thereof) of the north-west rail link. Over the years there have been numerous proposals to extend the existing rail network to accommodate commuters living in the suburban expanse that is the north-western suburban region.

The current proposal is for eight new train stations along a dedicated line that will be a mix of underground tunnels, sky-train sections and flat land sections. Just this week, the first demolition work commenced for some structures directly in line for the proposed work, which is a more solid indication that the line will actually go ahead.

So today I thought I’d offer some theories about how the new rail line, both in the lead-up to its completion, and post-completion, could impact on the residential property markets in the council areas around this corridor.

The area in question takes in to account several large shire and municipal council areas, and according to the Australian Bureau of Statistics, an estimated population of around 648,000 people and growing. This is significant, as it reflects just over 14% of Sydney’s overall 4,605,000 current population. The proposed eight stations will connect suburbs across three main local government areas, which are some of the fastest-growing population areas in Sydney:

• Blacktown City (currently around 307,800 and is not only the most populous local government area in all of NSW, but has had the fastest population increase and intake in the last five years)
• The Hills Shire (currently around 176,500 and also in the top five fastest-growing councils by population)
• Hornsby Shire (currently around 164,600 and showing positive population growth)

So how will this impact the suburbs close to the proposed stations? To understand that, we first need to know more about the people who occupy them and the types of households most prevalent.  Most Sydneysiders have come to know the north-west region as a family/suburban area. And they are correct – at least according to ABS data. But RP Data can also provide an insight to this audience by way of reporting on the typical size of dwellings most readily available on the market at any one time.

To keep it short and sweet, instead of bombarding you with stats and numbers, I’ll give you the general flavour of it per local government area:

Blacktown City is popular with families with very young children, who historically preferred detached houses, but recent shifts have caused a swing towards townhouses (attached dwellings), units and apartments. This is consistence with housing stock trends reflecting increased demand for units, as well as higher-than-ever new construction commencements for units and apartments in many suburbs within the council area.

Hills Shire is popular with both young families (families with very young children, as above) and also established families, but also has the highest rate of single-person households out of all three local government areas. RP Data also highlights increased new construction starts, evenly split between free-standing houses and townhouses, villas, and units.

Hornsby Shire council area contains suburbs that are typically established families, preferring detached houses, with a small but growing preference for units in most suburbs.

There is also a significant spread of median dwelling prices across all suburbs within all three local government areas, making it difficult to plot and trends, however generally speaking Hornsby contains the most expensive median dwelling prices, followed by Hills Shire in the middle, and Blacktown City after that.

The biggest question around the rail link for would-be investors interested in these areas is no doubt “Will the rail line increase capital growth and/or rental return on properties close to it?”. Without any statistics behind me and based largely on rail line extension projects completed in other areas of Sydney over the last 20 years, I would argue it is likely that some areas will record increases more than others. There are so many variables to consider before we can get more clarity around this, including:

• Commuter times and ease of connection to CBD (and other high employment areas within the city) once the project is complete.
• Speculation about Chatswood station’s congestion and overcrowding issues slowing down overall commute times for users.
• Suburbs close to the new stations that are within walking distance will benefit from the commuter ease of access, but may lose out to noise congestion issues caused by outer-suburb drivers wishing to park in the side streets and then alight on to a train.
• Demographic changes to the suburbs close to the new stations (more commuters, singles, and double-income-no-kids couples moving to these areas) could mean that dwelling values for larger family homes (the five-bedroom, three-car, three-bathroom variety) may suffer as demand for them may not be as strong as smaller and more affordable dwellings.
• Residents have also only been offered speculation as to the precise travel times involved to change train services to access different areas of the city. The rail link only connects to an existing Epping line, meaning that to get to other areas of Sydney such as the south-west, southern suburbs, and north shore by rail will still be cumbersome.

Another element to consider is not only where the average north-western Sydneysider will need to work, in 10 years’ time (the rail link’s estimated completion), but how they work. More and more people are working remotely and thus are moving away from outer-suburban areas of cities, and out of cities altogether.

If the trend continues at the rates it is currently gaining momentum, in 10 years, much of our professional workforce may not even need to commute for work. This could result in a shift for Sydneysiders who select their suburb of residence in accordance to work proximity.

Someone who telecommutes could live on the central coast instead of suburban Sydney.

It is still too early to speculate more precisely on the effect of metro rail services being rolled out to this region of Sydney. There council areas affected each contain many individual suburbs, with each of these having its own market dynamics and nuances.

However, one thing is certain: opportunity for investors is always created when infrastructure advances.

My advice to those considering these areas today for tomorrow’s investment rewards is to do your due diligence as per usual, but to also research heavily the implication on traffic congestion on the road caused by changes the way people reach their train station for weekday commuting.

Cameron McEvoy is a NSW-based property investor and maintains a blog, Property Spectator.