Tide turning for Western Sydney property market

The beach and a raft of massive new infrastructure and development projects are set to transform Western Sydney and its property market.

Penrith Beach artistic impression.
The Western Sydney property market could be about to ride high on a wave of new developments. (Image source: Western Sydney Lakes )

More than 100,000 residents in Sydney spent time at Penrith Beach over Christmas, which is an hour and a half’s drive from any actual coast, thanks to an extensive rehabilitation of an unused quarry near the foothills of the Blue Mountains.

The area promises new opportunities for commercial and residential investors.

The Western Sydney Lakes Development, which features major parklands, an extensive lake system and waterfront with urban and commercial potential, is the latest in a cache of major infrastructure projects within the region, which includes the new Western Sydney International (Nancy-Bird Walton) Airport.

Adjacent to the beach and a 700-space car park, is the location of the first stage building of Southbank and Production precincts, which respectively are a luxury retail and waterfront dining district and a film and television production hub.

Jacqueline Vozzo, former CEO and now board member of the Western Sydney Lakes, said the Lakes development would energise the western Sydney property market.

“The Lakes concept, built on a significant piece of regional open space, provides a range of opportunities for urban development, including recreation, tourism, retail and employment – making Western Sydney Lakes the most desirable new destination in Western Sydney, and with a new 24-7 international airport opening in less than four years, that will bring millions of visitors to our doorstep,” Ms Vozzo said.

“The Southbank precinct offers a refreshing climate for people to play, work, relax and visit, with access to fresh water against a panoramic backdrop but also has the potential to offer a variety of destinations delivering regionally significant open spaces that are supported and enhanced by sustainable mixed use urban development.

Western Sydneys new inland beach opened in December and was built on a remediated quarry on private land north of Penrith.

Existing suburbs boosted by infrastructure growth

With attractions and leisure amenities in the pipeline, Joseph Assaf, Director – Sales, Ray White Commercial Western Sydney, said with the 6,000 jobs during construction and 10,000 post-completion, plus Western Sydney’s first luxury retail precinct nearby, the real estate market there is on the cusp of significant growth.

“The proximity to amenities like the Penrith Town Centre and the new Western Sydney Airport further bolsters this outlook and other major developments like Sydney Metro West and the Western Sydney Airport Metro Line are enhancing connectivity and reducing commute times, and positively influencing real estate.”

Mr Assaf said improvement to accessibility, coupled with the draw of lifestyle amenities, is elevating property prices, especially in inner-city suburbs, and the St Marys/Orchard Hills Metro in particular is set to become a crucial link to the future Aerotropolis precinct, promising further growth and development.

“Among three suburbs performing particularly well now is Penrith, which is known for its mix of urban and natural amenities and is experiencing growth due to the new infrastructure projects and offers affordability compared to Sydney’s inner suburbs, plus lifestyle appeal.

Castle Hill is traditionally known for its larger homes and community feel and is popular due to its balance of suburban comfort and access to Sydney’s CBD, boosted by transport infrastructure improvements like the Sydney Metro,” Mr Assaf said.

Edmondson Park a ‘compelling’ investment

Mr Assaf said Edmondson Park is the third one to watch for 2024, as a relatively new suburb attracting attention due to its modern housing, planned development, and potential for growth.

“Edmondson Park stands out as a compelling investment destination, primarily due to its rapid population growth, from 424 residents in 2011, to 2,282 in 2016, and about 14,200 in 2022.

“This which correlates with increased demand for housing and other community amenities, making it a vibrant and evolving area for potential investors,” he said.

Edmondson Park has delivered solid capital growth, with the median sale price for houses around $1,202,750 and units at approximately $636,250, and although there has been a slight dip in 12-month growth rates, the average annual growth of 7.47 per cent for houses indicates a healthy and growing property market suggesting investments in the area have the potential to appreciate further.

“With affordability becoming a challenge in inner-city areas, Western Sydney’s attractiveness is rising.

“Additionally, a slowdown in development applications and construction commencements is leading to increased value in existing residential properties, as the housing supply struggles to meet the growing demand,” Mr Assaf said.

Housing crisis as population grows

In August 2020, the median rent was $437 in Australia compared to CoreLogic’s latest figures showing they have surpassed $600 per week. Parramatta has seen an annual change in the CoreLogic rent value index of 14.5 per cent and like all rents in Western Sydney, are at a new peak.

The median rent value for Blacktown is $642, up 11.5 per cent; the outer southwest is $583, up 9 per cent; outer west and Blue Mountains at $600 is up 8.2 per cent; and south west is $674, up 11.1 per cent.

Western Sydney is impacted by the housing crisis, as Professor Jennifer Westacott, Chancellor, Western Sydney University, says in her report on housing in the area.

“It is no secret that Western Sydney will absorb the lion’s share of the state’s growth over the next 20 years, its competitive housing market becoming even more crowded. Some may view this as a challenge, due to the region’s socio-economic realities and demographic idiosyncrasies,” she said.

Critical insights from the report say Western Sydney will accommodate nearly two-thirds of Greater Sydney’s population growth over the next two decades, and the region has a significantly higher proportion of households with a mortgage (35.4 per cent) compared to the rest of the Sydney (28.5 per cent).

A third of households are on very low incomes, and 5.3 per cent use social housing compared to 3 per cent for the rest of Sydney.

An extra 8,500 extra dwellings must be made available annually until 2041 to meet projected demand, which is forecast to grow by 800,000 people in the same timeframe.

Suburbs with the greatest projected annual growth in population by 2041 are Parramatta, up 130,424 people, The Hills, 85,236, Blacktown, up 81,822, Canterbury-Bankstown, 74,376 and Liverpool, 73,223.

Projected annual growth to 2041 is greatest in Wollondilly and The Hills (2.2 per cent), Parramatta (2 per cent), Camden (1.9 per cent) and Cumberland (1.5 per cent). Compared to the rest of Sydney, the suburb projected to have the highest population growth is Sydney City (78,652), while the highest projected growth rate at 2.4 per cent is Burwood.

The projected shortfall of housing in Western Sydney by 2041 is 160,530, with Parramatta falling short by 21,670 dwellings, Blacktown by 20,320 and Canterbury-Bankstown by 19,290.

“I see this growth as a once in a generation opportunity to establish Western Sydney as a place of housing innovation, a place where all levels of government, developers, industry partners and universities work with the community to ensure that residents can access high quality social and affordable housing,” Ms Westacott said.

Continue Reading Residential ArticlesView all residential articles