Sydney Leading on Construction and Housing
Sydney has seen strong growth in construction and housing with a plethora of major construction and infrastructure projects currently under track. Furthermore, the city has recorded some of the strongest housing prices in the nation. The latest figures indicate that Sydney’s leading role in the national housing market is set to continue, making it a strong for destination for investment property.
Housing Capital Growth
The latest Australian Property Monitors data indicates that apartment prices were unchanged in Sydney even as the rest of the nation saw some small adjustments in price. The affordability of apartments coupled with a general trend towards small households and higher density living has driven Sydney’s strong performance
Apartment quick facts:
- Current median price for a unit in Sydney is $451,291, with inner city and middle-ring suburbs among the most sought after areas.
- In the CBD, the median price for an apartment is $631,500, compared with $365,000 in Parramatta and $1,187,000 at Darling Point.
- Most apartment sales in the past six months to September were in or close to the CBD. Other suburbs with high apartment sale rates included Mosman, Randwick, Cronulla, Surry Hills, Parramatta, and Dee Why.
The outlook for home and unit prices across NSW in 2012 is very positive. The latest data from Residex suggested that Sydney housing prices would continue to lead the Australian market, growing by at least an average of 3 per cent each year over the next five years, and average 5 per cent per year over the next eight years.
Construction and Infrastructure Activity
Sydney is also experiencing a high level of construction and infrastructure activity, all of which add its potential as a destination for property investment. The construction of the North West link from Epping to Rouse Hill is well underway, while building and engineering work is expected to exceed $46 billion in the current financial year.
Major construction and infrastructure projects in Sydney include the following:
- North West link project. This 23 km rail link project is currently in its exploratory stages and is expected to inject around $7.5 to $8.5 billion into the economy by completion.
- Engineering and building work. Figures from the Construction Forecasting Council (‘CFC’) suggests that engineering and building work will total $46.894 billion in the current financial year compared with $42.516 billion recorded by the ABS for in the last financial year.
- Standalone housing. The CFC estimates that value of work done on houses will leap from $5.594 billion in the 2010/11 period to $8.951 billion in the 2013/14 financial year.
- Multi-residential projects. The value of multi-residential projects will jump from $4.586 billion in 2010/11 to $6.599 billion in 2013/14. Major projects include Barangaroo’s residential component, Gosford’s The Landing development project, and the Penrith Panthers Expansion project in the Riverlink Precinct.
- Commercial projects. Office building activity will surge from $1.722 billion in the 2010/11 period to $2.154 billion in 2012/13.
- Industrial projects. Similarly, the value of industrial property development projects will jump from under $1 billion in 2010/11 to 1.285 billion for the 2011/2012 period to over $1.5 billion in 2013/14.
- Public infrastructure. Transport projects, including road construction and the North West link is expected to exceed $6.076 billion (roads) and $6.709 billion (rail, bridges, and ports) in the 2012/13 financial year, up from $4.806 billion and $4.909 billion respectively in 2010/11.