The city is benefiting from multiple major investments in infrastructure, which will more than compensate for the downturn in manufacturing in recent times.
Expansions to Adelaide airport, based on the government’s 30-year master plan, are forecast to require $1 billion to be spent in the next five years on major projects. They include an expansion of the southern end of the terminal, a 250-room hotel and an office complex.
Passenger numbers are expected to more than double for both domestic and international flights, and jobs associated directly and indirectly with the airport are expected to more than double over the same period.
Upgrades to Adelaide Riverbank, a $1 billion redevelopment encompassing 380 hectares around the River Torrens that coincides with the Adelaide Oval upgrade, consists of three key precincts: the health and wellbeing precinct, the core entertainment precinct and the cultural and education precinct.
The projects consist of the Festival plaza upgrade, redevelopment of the Adelaide convention centre, redevelopment of the casino and establishment of the South Australian health and biometrics precinct.
The new Royal Adelaide Hospital, located close to the CBD, was completed in early 2017.
It has a patient capacity of 80,000 a year, is the state’s greenest hospital and is one of the world’s most technologically advanced hospitals. It cost $2.4 billion, making it (at the time of construction) the third most expensive building in the world and the most expensive building in Australia.
Adelaide has been confirmed as the hub for Australia’s future submarine construction contract. This is set to create thousands of new jobs in the area with the raw materials reportedly to be sourced in Australia as well. We’ve heard projections of 6000 new jobs by 2020, and many more over the life of the project (some 30 years).
Also in the pipeline for 2018 are a large number of patrol boats or corvettes to be built, and then in 2020 the construction of a frigate fleet will commence. The accumulative value of these projects has been put at about $39 billion and they are set to create about 2500 jobs over the course of their contracts.
In years gone by Adelaide has had annual growth rates typically in the 2%-3% range, but with this boost to infrastructure and subsequent job creation local government areas such as West Torrens, home to suburbs like Plympton just to the south-west of the airport and the CBD, have seen an average annual growth rate of 8.49% to July 2017, according to Corelogic.
2. Wollongong metro
The past three years have seen infrastructure investment in and around Wollongong which will benefit existing and early 2018 investors.
A number of sizeable developments have taken place over the past three years. A $16.5 million purpose-built facility for Wollongong University, and the $90 million Ramsay Health private hospital that opened in January 2016, have contributed to the outperformance of the city’s property market.
The West Keira development, a $200 million upgrade by GPT Group for a new shopping precinct just north of the current Crown Street precinct, will benefit the LGA’s growth also. It is a three-level centre within a 18,000 sq m building.
Wollongong LGA has experienced an average growth rate of 14.09% for the 12 months to July 2016 and 15.54% to July 2017, according to CoreLogic. The market was going through a growth stage of the cycle at this time anyway, but the renewal of infrastructure has seen it achieve even greater growth.
This is quite contrary to similar satellite cities like Newcastle, which had more modest performance across the LGA – 6.67% and 6.25% respectively for the 12 months to July 2016 and 2017. The lack of major projects and renewal has certainly seen this market underperform compared with Wollongong.
To the south of Wollongong, Shellharbour has also seen a significant upswing in values due to the marina development that is currently under construction.
Sydneysiders were flocking to the area even before the marina project, in anticipation of the benefits. The development was given the go-ahead in 2012, with completion expected this week. The marina is at the heart of the $3.7 billion master-planned community, according to Glenn Colquhoun of Frasers Property, which manages the project.
As part of the construction of the community centre, a golf course, shops, playing fields and wetlands will also be completed in the years to follow.
This new development has seen values in the Shellharbour LGA shoot up 14.5% for the 12 months to July 2017, which is a strong performance for a location that falls outside a CBD locale.
4. South-eastern Melbourne
Significant transport infrastructure development in south-eastern Melbourne has benefited the likes of Dandenong and Frankston. Upgrades to transport from Melbourne CBD has seen a significant rise in buyers moving from inner locations to these outer areas.
The projects 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. This, together with the Peninsula Link freeway now connecting the Eastlink and Monash freeways, 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 – these areas offering coastal lifestyles are becoming more and more popular with Melbournites.
Construction of the $80.9 million stage 3 development of Frankston Hospital was completed and officially opened in early 2015.
These projects have helped Frankston achieve 19.5% average growth for the 12 months to July 2017, according to CoreLogic, outstripping nearby Port Phillip Council in Melbourne’s inner metro for the same period at 11.15%.
5. 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.
Almost $1 billion is reportedly being sunk into the local economy for Games-related projects.
The Gold Coast has outstripped Brisbane LGA growth by 1.62% in the 12 months to July 2017, at 7.76% compared with 6.14%.
6. Sunshine Coast
The area typically misses the large growth numbers in the property stakes because it’s a regional tourism hub that historically lacks the stronger employment drivers. But recent infrastructure projects will change that.
The Sunshine Coast has benefited from the opening of the $1.8 billion University Hospital about 20 minutes south of the CBD in Birtinya, as well as the $5 billion Aura development by Stockland and some $500 million spent on improving the CBD in Maroochydore.
Due to the opening of the hospital, Birtinya enjoyed a 9.32% increase in values on average for the 12 months to July 2016, according to CoreLogic. In the same period the epicentre of the Sunshine Coast, Maroochydore, had 5% growth. The 2017 data is still to be released.
7. Brisbane metro
A massive revamp of Brisbane’s CBD is set for completion in six years.
Destination Brisbane Consortium’s development of Queen’s Wharf is already setting this market up for a strong few years. The $3 billion project will include over 50 new restaurants and food outlets, an outdoor riverfront cinema, six new premium hotel brands including a six-star resort, a new high-rise signature building labelled the Arc and public open space equivalent to 12 football fields.
The project is set to add about $4 billion to the gross state product, providing a huge boost to the economy along with 2000 construction jobs and a further 8000 ongoing jobs upon completion. The project is set to be fully completed and operational in 2022 and will be a big addition to the already strongly performing local economy.
This Brisbane story is not finished yet. We are only just at the opening chapter of how this project will impact the market. As it is only in the early stages of construction, the data is not in yet as to how much this project will boost the local property market, but the outlook is strong.
8. Toowoomba – our regional pick
This relatively independent market continues to receive more infrastructure and investment year after year.
Toowoomba is one of our strongest regional performers in the infrastructure race and has been so for some time now. The area saw great benefit from a number of projects, most notably the Wellcamp Airport and the second Range crossing.
The Toowoomba postcode recorded a 12-month growth rate of 8.13% for the year to July 2017, and also hit double-digit growth for 2013 and 2014, with steady growth every year since. This is a good outcome for a market as isolated as Toowoomba.
Sydney broadly has had its fair share of growth but markets around Liverpool have gone from strength to strength in recent times.
With south-western Sydney seeing strong infrastructure investment over the past few years, including the construction of an intermodal freight terminal and port shuttle operation to and from Port Botany, there were reports of over $11 billion in economic benefits and the creation of around 6800 jobs, according to Moorebank Intermodal Company.
According to CoreLogic, the property market in the Liverpool LGA rose by 12.88% in the 12 months to July 2016 – the period just after the commencement of the project. This growth puts it in the same league as markets closer to Sydney CBD such as the inner west and eastern suburbs.
A collaboration between Deakin University, the City of Greater Geelong and the G21 (Geelong regional alliance) is part a strategic vision for Geelong’s economic future, capitalising on existing resources and infrastructure and reducing reliance on government investment. Geelong’s growth has frequently outperformed that of Melbourne and greater Victoria.
Located to the south-west of Melbourne, Geelong has also seen its fair share of major projects including the major upgrade to Geelong Hospital, with funding from both federal and state governments to the tune of $128 million.
Coupled with the “Securing a bright future” project, Geelong is fast becoming one of the more liveable cities in greater Victoria. The collaborative partnerships have created four major projects worth about $2 billion in new investment to the region.
A $1 billion Avalon freight precinct will become Victoria’s largest, lowest-cost logistics hub; a $600 million to $800 million high-security water solution will work to drought-proof regional food production; and a $300 million investment at CSIRO’s animal health laboratory at Geelong, alongside an injection of $70 million to Deakin’s Carbon Nexus research centre, will further drive opportunity for the region.
Off the back of these projects, the area has seen incredible strength through the property market in recent years. It has gone from being the laughing stock of Melbourne through the antics of then mayor Darryn Lyons, who was relieved of his role in 2016, to becoming one of the powerhouses of the Australian property market.
Geelong city recorded 14.46% growth for the 12 months to July 2016 and then backed that up with a solid 8.3% growth for the 12 months to July 2017, according to Corelogic. Some suburbs, such as Belmont, showed strong 16.7% growth for the same period to July 2017. This outperformed many other areas in Melbourne and greater Victoria.