Western Sydney Airport will be one of the largest infrastructure projects Australia has seen in many decades, and with it comes some very compelling opportunities for property investors today.
The airport will be a game changer for Sydney’s western suburbs, where almost half of Sydney’s population currently lives and where a million more residents will settle by the early 2030s.
We’re talking about an airport that will service five million passengers in its first year – about the same as the Gold Coast Airport today; and its capacity could double in as little as five years.
Along with it comes a new train line, new housing estates, new community facilities, many road upgrades throughout the west, north-west and south-west; and serious sky-is-the-limit economic investment. Not to mention about 28,000 new jobs by 2031, according to the Federal Government.
Construction is due to start later this year and it’s supposed to be operational by 2026 – which is not that far away in real estate terms. We talk of Sydney property values doubling every 10 years, so what will an international airport do for western suburbs house prices in less time?
The location of Badgerys Creek for Sydney’s second airport was confirmed by the Federal Government in April 2014. Since then, home values in the immediately adjacent suburbs have skyrocketed, as shown by CoreLogic data published on realestate.com.au.
The median house price in Bringelly – which is right next to the airport site, went from $890,750 at the start of 2014 to $3,000,000 today. No, that isn’t a typo! Here’s some others:
These suburbs have many large acreages, and it’s the land that both local and international developers have been keen to acquire for future housing estate projects. They’re snapping up the large blocks with run down cottages and sheds that will be easy to develop down the line.
But don’t think of these suburbs as little rural outposts full of modest farmhouses alone. There are some spectacular contemporary prestige estates out here that would be very appealing to high net worth clients now that an airport is coming to the area.
The airport provides plenty of opportunity to expand commercially and they can swap a $6 million - $8 million home on the North Shore for a $2 million - $3.5 million home of the same quality but on much more land and in a much more relaxed, rural-style environment. Check out this example.
As a property investor, it’s important to realise that the airport is not a singular infrastructure project, and it’s not just suburbs close to the actual site that will benefit.
One of the major associated projects of the airport is the North South Rail Link, which is likely to run from Macarthur to Schofields with a connection to the Sydney Metro Northwest at Cudgegong Road station.
Agreement to commence stage one – a rail line between St Marys, the airport and Badgerys Creek Aerotropolis (a world-class commercial hub surrounding the airport) was reached in March.
What do you think a new rail link will do for St Marys, where median house values are currently $660,000 – about 35% lower than Sydney’s median? St Marys is 21km away from the airport but will benefit directly with the rail link providing easy access to thousands of new jobs and facilities.
There’s also major improvements on the road network through the west, south-west and north-west that will make life easier for residents with reduced local traffic and travel times.
The first section of $1.6 billion The Northern Road Upgrade from Narellan to Oran Park was completed last month. This major arterial road stretches 35km from Narellan to South Penrith and will connect to the new M12 Motorway leading to the airport. Many more upgrades are yet to come on this one road, which will benefit residents in a variety of suburbs.
The airport forms part of a greater vision for Western Sydney that will see more residents working locally and greater economic activity and investment than ever before. And all of this is happening in one of our city’s most affordable regions, so there is plenty of room for capital growth.
Smart investors should start looking at the opportunities that Western Sydney Airport presents now.
If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.