Boom in Sydney infrastructure gives investors a boost
The New South Wales capital is positively brimming with infrastructure developments - great news for potential property investment in Sydney.
One example is the 33-kilometre WestConnex motorway that will link western Sydney to the airport and Port Botany precinct. This development will also include an extension of the M4 and duplication of the M5 East to King Georges Road.
Another instances is the South West Rail Link, which includes a major upgrade of Glenfield Stations and a new twin track passenger rail line from Glenfield to Leppington via Edmondson Park.
There's also the North West Rail Link, as well as the NorthConnex project that will connect the M1 Pacific Motorway (formerly the F3 Freeway) at Wahroonga to the Hills M2 Motorway at West Pennant Hills.
These projects are just a few of the examples of why Treasurer Mike Baird has described Australia the "centre of attention" for global infrastructure.
"[Investors in Japan, Singapore and Britain] have effectively dubbed NSW, and more broadly Australia, the infrastructure capital of the world over the next three to five years," Mr Baird is quoted as saying by a recent article from The Sydney Morning Herald.
"That's good news because it's going to help tackle the infrastructure backlog."
Mr Baird went on to say the anticipated infrastructure activity in NSW over the next five years is valued at approximately $85 billion.
''That opportunity, whether it be investment or construction work, has key infrastructure players very excited. The big pipeline both for NSW and across the country ensures that the global infrastructure players … are seeing Australia as an essential part of their business," he said.
Of course, the big daddy of them all just might be the recently announced airport to be built in Badgerys Creek.
"For more than 50 years governments have talked about a second airport for Sydney," said Prime Minister Tony Abbott.
"The talk is over. The final decision has been made. This airport will be good for economic growth and good for jobs - both in Western Sydney and nationally."
The initial construction phase is forecast to create nearly 4,000 jobs, while the airport development is predicted to generate 35,000 jobs by 2035, rising to 60,000 jobs as time goes by.
Finally, the airport is expected to increase Australian gross domestic product by almost $24 billion by 2060.
All together, these projects are making not only the city more interconnected, but also making Sydney more connected with the world.
And luckily for property investors in the Sydney region, they will also enhance property values.
Infrastructure is a big benefit for property investment
House prices are affected by numerous factors - buyer demand, inventory availability, proximity to amenities, local employment figures, etc.
However, one of the most important can be a property's location as it relates to local infrastructure.
Research has found the presence of infrastructure in an area, especially in the case of transportation, is a major determining factor in price.
This makes perfect sense, as a home with nothing around it would generally receive less interest from buyers and therefore not be seen as valuable when compared to properties close to public transport and other infrastructure.
Additionally, increased infrastructure typically results in more people moving into an area, as well as the creation of new jobs. This boosts the local economy and pushes demand for housing higher.
At the same time, it's important to know which types of infrastructure could negatively impact a property's price. A home located right next to where a busy motorway is set to be built may not be very popular with many buyers.
This is where working with a property buyers' agent can be invaluable, as these professionals can help you determine which areas will most suit your specific investment goals.