A 'generational infrastructure boom' is fuelling large increases in investment in Parramatta, making the suburb, which sits at the geographic heart of Sydney, an increasingly attractive investment destination for governments, businesses, and residents.
Ged Rockliff, head of residential with Savills, answered SCHWARTZWILLIAMS' questions about the rapidly evolving suburb.
Parramatta is quickly becoming an important Sydney hub. What are the main changes you’ve seen in Parramatta in recent years?
We’ve seen a convergence of investment and vision from the private and public sector across all levels of government, which includes promotion and development supported by both physical and social infrastructure.
Because of this, Parramatta has become Sydney’s second CBD and has evolved into an increasingly attractive destination for business. Employment opportunities are growing in the area as businesses move to be based closer to where their workforce live. We have also seen huge growth in amenity with the emergence of Church Street as a hub for restaurants and cafes, supported by first class shopping and surrounded by open spaces.
What is the main appeal of Parramatta as a property investment destination?
Major infrastructure investment in Sydney’s west and Parramatta will see the area undergo a generational infrastructure boom in the coming years, making it a very appealing target for property investors.
Airports, toll roads, heavy rail and light rail are committed and underway and this will underpin the jobs and economic growth giving investors confidence there will be a growing market for apartments, houses and tenants. Employment in Parramatta is forecast to grow from 157,000 to 186,000 jobs over the next four years which will see economic growth move from 2.4% to 4.6%.
The light rail is also a driving factor of investment appeal. It will be a direct link to the growth areas of health and education. Westmead Hospital is undergoing a circa $1 billion development that will see employment grow from 25,000 to 40,000. The University of Western Sydney, which has opened a CBD campus that will house 10,000 students, will also receive continued investment.
Is Parramatta appealing for both investors and owner-occupiers alike?
Absolutely, the story is one of growth, jobs, infrastructure and amenity. Parramatta already has a high proportion of residents in the 20-34 age bracket – 45% versus 23% across Greater Sydney - that will underpin the energy and vibrancy that will continue to position Parramatta as a key destination for businesses, owners and tenants.
Have you observed any problems associated with the rapid pace of development and changes in Parramatta?
As with other areas of Sydney, the lack of investment in infrastructure since the Sydney Olympics has caused bottle-necks and reduced productivity and amenity. However, the significant $10 billion infrastructure investment injected into Parramatta means that investors and owner occupiers will now have the opportunity to buy into an area where these infrastructure improvements are already underway.
No other region in Sydney has a pipeline of infrastructure and employment opportunities like Parramatta does. It will create a central hub for our key growth corridor and provide high quality living options within a short distance to a vast amount of employment opportunities in retail, health, education, government sector, business and finance.
What do you see as the five-year outlook for Parramatta?
Sydney will continue to boom and the majority of this growth will be in Sydney’s west. Parramatta is poised to be the epicenter of this growth and is importantly being supported by all levels of government with logical and game changing infrastructure projects.
We are in an interesting period with respect to Sydney’s housing which is a daily topic of conversation. When one appreciates the growth in businesses, employment and population that is going to occur over the next 5 to 10 years, it is easy to see how Parramatta will become a hub for this activity.
When compared to other areas of Sydney, the cost of housing is comparatively more affordable in Parramatta. Supply of accommodation can be turned off in an instant and we are seeing this with the influence of tighter credit markets for purchasers and developers, as well as delays in planning approvals. However, demand will be constant in this region as housing will be required to support the growth in business and population and this demand will continue to be cumulative. On the flip side, whilst supply can be turned off in an instant, it takes years to remobilise due to planning approvals, marketing campaigns and a normalising of credit.
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