The North and South coastal-line alongside the city east are narrow strips with reserved parklands. This makes development along the North Shore and southern lines impractical. Sydney West, however, looks a lot more promising with lots of land for development. Therefore, Parramatta, Liverpool, and Penrith have been chosen as the new smaller city sites. These three new cities will collectively be called “Great Western Sydney” and are predicted to be the third largest economy in Australia following the Sydney CBD and Melbourne CBD.
Changes that have taken place so far in Great Western Sydney include a 50 percent growth in employment in the region and the building of new roads, these being the M2, M5, and M7. But this is just the beginning. New trains, train lines, and more new roads are expected to follow, which, in turn, will stimulate greater employment.
This trending change in the city layout and movement “westwards” is expected to act as a critical reference to predict the hot spots for property value increase in years to come. As such, it acts as a guide for property investors with a keen eye.
How These Changes in Trends Will Impact on Sydney Property
Based on the two trends of change mentioned above, the development focus in Sydney, after the completion of new roads, is expected to move towards the improvement of the urban living environment. New shopping and recreation facilities around the new employment areas and the generation of a scope for future demands will follow. By combining the areas we live and work in with areas for recreation and shopping, people are being encouraged to reduce their need to commute. Overall, it can be said that the areas with increasing employment opportunities are the areas with a superior increase in property values.
The two trends mentioned in this article reflect the difference between now and the future, the difference between impression and reality and the difference between “waves” in investment. However, before investing in property, investors need to look at the bigger picture, make a note of changes, and keep an eye on areas that are showing signs of a superior increase.
The key to successful property investment is to invest for the future and to be aware of future trends. According to the Property Investors Alliance (PIA), a property investment group who specialize in the Sydney property market, investors need to identify whether or not a suburb has a “superior increase” as this then highlights any differences between now and the future, so that differences between impression and reality can be identified along with any differences between the “waves”. Identifying these differences leads to the exposure of the future in housing and where this is heading in a specific area.
The trick to understanding superior increase in Sydney is achieved by getting to know the two trends in today’s Sydney property market. The first trend being how a Sydneysider now selects a home, and the second being how the city layout has changed.
Trend 1: How a Sydneysider Now Selects a Home
Conventionally speaking, many Australians used to prefer a home that had a separate living area with three-bedroom and a front and backyard. However, over the last 20 years, there has been a number of changes in the Sydney community, these being::
• Heavier traffic – Traffic is becoming heavier and harder to negotiate. This, in turn, means that people living in Sydney are finding it increasingly harder to drive to work or to the shops.
• Less time – Time is becoming more precious with both husband and wife having to work to ease the financial pressure. Many are also working more extended hours to get ahead financially. Plus, a greater variety of entertainment is available, which means less time and money.
• Rising living costs – The cost of living is increasing. This means less residual income. These changes in lifestyle are seeing many Sydneysiders review their home choices, with them electing to live closer to work and transport and to live in smaller, more compact homes. These changes are becoming a trend which is expected to have an impact on the types of investment properties purchased in the future.
Living Closer to Work
By electing to live closer to work, many Sydneysiders are now looking for a rental property that is situated in the suburb they work in, or a neighbouring suburb close-by. This not only reduces their commuting time and sees them avoid heavier traffic, but can also reduce their rental costs. For example, an apartment in Liverpool, a suburb in Sydney’s Southwest, is managed by PIA. When PIA advertised the property for lease, they anticipated attracting tenants in a low-to-mid income bracket. However, PIA realized that many of the applicants who applied for the property were actually doctors and nurses that were working at the nearby Liverpool Hospital. These applicants were in a higher income bracket, and they chose the apartment for convenience, rather than residing in the more affluent Eastern and Northern suburbs.
Living Closer to Transport
When a Sydneysider elects to live closer to transport and shopping centres, they are aiming to reduce the stress of driving to and from work, and to the shop. Plus, they are seeking to save time and money. For instance, a couple who lived in Cherrybrook and paid a weekly rent of $500 decided to move to Auburn Central. Their decision to move was based purely on the couple’s need to save money and time. The husband works in IT for a company in Parramatta, and his wife works in a financial institution in the city. The couple was finding it too expensive to own and run two vehicles. Plus, the wife wanted to reduce her daily commuting time. So the wife sold her car. However, this then created another problem, with no train station close-by the husband had to drive his wife to the train station daily, and then collecting her after work. This becomes very time-consuming. Auburn Central provided the couple with a solution. By moving to a new rental property situated in the suburb, things suddenly became a lot easier as the train station was within walking distance of their apartment, and the shopping centre was just downstairs.
Auburn Central, along with many other suburbs situated along the train route in Sydney is becoming more popular. In 2007, the rental increase in Auburn was the highest of all suburbs in Sydney. In fact, it is now more than $530 per week to rent a three-bedroom apartment in Auburn Central, which shocks a lot of people living in the Eastern suburbs.
Smaller, More Compact Homes
Sydneysiders are electing to live in apartments and units as they are simpler to maintain with smaller yards, and they are very economical with smaller utility and rental costs. Plus, Australian family sizes are becoming smaller, with single people or couples becoming the trend. Many people living in Sydney are also electing to dine out, rather than cook at home.
In the past, people who elected to live in a unit or apartment typically did so because they wanted more affordable accommodation or they were in between houses, and searching for their next property. But nowadays apartments and units are becoming a type of lifestyle. Many young people and older people looking to downsize after their family have grown-up and have moved on are looking to buy an apartment or unit, rather than a house.
Trend 2: The Changing City Layout
Historically speaking, the Sydney central business district (CBD), which was once central is now located in the east of the city. However, this remains the central hub for all other suburbs, in all directions, which presents a problem. With the employment forecast in 2006, for the next 25 years, anticipating a 15.79 percent employment growth in the Sydney CBD and North Sydney, this means greater traffic congestion. At present, the heavy traffic on major roads into the Sydney CBD is an issue, as during peak hours the traffic is basically not moving. This is not only time consuming, but also has a great impact on the quality of Sydney air.
In addition to this, the Australian government has introduced measures to attract more migrants from overseas to Sydney, so that they can combat the problem the nation is facing with an ageing population. Sydney’s population growth now far outweighs other cities in developed countries, with its growth being recorded as the highest since the 80s. This growth is expected to continue with Sydney shaping into an international metropolis.
Under these circumstances, a change in the planning of the city layout was needed, and Sydney city-planners introduced the “City of Cities” some time ago. Under this direction, Sydney is transforming and is no longer just a city, but an evolving metropolis that contains a number of smaller cities. These new cities are independent and are also closely related to the old CBD in both lifestyle and employment opportunities.