While we don’t have a crystal ball, we do know where investments and approvals are planned or projected and where population growth is predicted to soar. This gives us a good indication of growth corridors across the country and potential investment hot spots that are well worth keeping an eye on in 2023. Here, we look at what determines a growth corridor, what sort of return on investment you can expect, and most importantly, where to find potential pots of gold across Australasia.
What constitutes a growth corridor?
Growth corridors are areas that are shaped and supported by government development plans and strategies. The focus is set firmly on putting critical infrastructure, integrated land use and transport in place to formulate a robust, carefully considered, and well-planned future community.
Growth corridors and equity
Growth corridors aren’t created overnight, and much of the local and state government investment in infrastructure and amenities are staggered over time. This means bundles of equity aren’t typically realised in the short term. For this reason, growth is appreciated over a longer period, making them an excellent investment for first-home buyers. Housing is comparatively affordable – particularly in the early stages.
Where to find pockets pegged for growth
From lifestyle-related migration to population profiles and planned government investment, there are many reasons particular suburbs and regions are marked for potential growth. Here, we take a closer look at where to find them this February and beyond.
Brisbane – with a Gross Regional Product (GRP) of an estimated $181 billion in 2020-21, Brisbane is a city that has a lot going for it. Close to five major employment centres – the CBD, the Airport, Trade Coast, Fortitude Valley and Enoggera Barracks, the jobs are plentiful, the lifestyle is enviable, and the Queensland Government infrastructure expenditure is bountiful. All of these factors point to increasing interstate net migration, a population predicted to grow by 43% by 2041, and, ultimately, an increase in demand for housing.
Adelaide – with lower median house prices than most Australian capital cities and affordable prices relative to the average income, home buyers in Adelaide generally benefit from smaller mortgages and are less affected by changes to interest rates. This golden combination means Adelaide has been somewhat protected from the large property price declines experienced in Sydney and Melbourne. Add to this net interstate migration and a growing population, and it becomes apparent why Adelaide has been at the forefront of nationwide price growth for the past few years.
New South Wales – predicted to grow to a state housing more than 12 million people by 2056, the NSW Government is committed to “the vision of a 30-minute city – connecting residents to jobs, leisure activities, services and amenities in just 30 minutes”. Understandably, Sydney is a big focus for creating new, affordable communities, with the South West Growth Area a key focus. This project encompasses several new precincts and aims to connect these with the Western Sydney Airport at Badgerys Creek and the Western Sydney Employment Area to maximise job opportunities and leverage existing and future infrastructure projects.
Melbourne – developed over 18 months, the Victorian Planning Agency unveiled Growth Corridor Plans to provide a clear strategy around the delivery of housing, employment and transport infrastructure in Melbourne’s new suburbs over the next 30-40 years. The Growth Corridor Plans focus on four metropolitan areas – North, West, Sunbury and South East –each with a plan and associated key growth town centers.
Perth – suburbs north of the city that were once considered isolated, have, as a result of significant population growth over the past decade, experienced a significant influx of amenities. And with further growth predicted thanks to burgeoning employment opportunities centred around natural assets like lime sand, silica and mineral sands and extensive tourism, the local government areas, in conjunction with State Government Agencies, Industry and other stakeholders, have come together to create a shared vision and project initiatives to guide the growth of Perth’s Northern Growth Corridor up to 2050. Focussing on the Northern Growth Sub-region (NSGR), the project aims to address the infrastructure needs and critical services to support the population that is expected to grow nearly 8.5 times its current population by 2050.
Canberra – with an unwavering strong public sector shielding Canberra from the majority of the negative economic impacts of the last few years and international migration expected to boost housing demand in 2022/23, it’s little surprise Canberra has one of the tightest rental markets in the country (with a vacancy rate around 0.7%). And with the South West Corridor upgrade package in the pipeline, the region’s growth will be further supported, congestion will be eased, and more efficient east-west freight connections will be created. Add to this Canberra’s reputation as one of the ‘safest’ places to invest in property and seeking out properties in near-city suburbs such as Dickson and O’Connor have become hot targets for long-term gains.
Tasmania – the pandemic-fuelled exodus to affordable homes and a better lifestyle created huge demand throughout regional Tasmania. So much so that prices have doubled in many Launceston suburbs over the last five years, making it the nation’s top-performing regional market. Lifestyle factors aside, the Tasmanian economy has proven to be another drawcard for internal migration. According to CommSec’s State of the States October 2022 report, Tasmania has the best-performing economy in Australia across eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
Whangarei, New Zealand – one of the fastest-growing districts in New Zealand – with an 18% population growth in the five years to 2018, a 57% increase in house prices over the last ten years and an almost 40% increase in household income across the same period – the Whangarei District Council has developed a Sustainable Futures Growth Strategy. This sets out to address infrastructure needs to sustain growth, housing options, protection of the natural environment and key projects to drive economic growth. With growth predicted to continue well into the future – due to significant internal migration driven by comparatively affordable housing, employment opportunities and a desirable lifestyle – it’s a solid option for capitalising on future potential.
Waipā District, New Zealand – located in the Waikato region, south of Hamilton, Waipā has long been drawing new residents from Hamilton and Auckland thanks to a surging dairy industry that underpins the region’s economy. Significant subdivisions, a new Waikato Expressway, and a $126.8m capital works programme are all planned to keep up with predicted population growth as detailed in the Waipā District Council Long Term Plan.
Secure your future gains today
Whether you’re looking locally, nationally or internationally, there are always pockets of potential that are ripe for future realisation. Properties located in areas earmarked for investment injected with infrastructure, amenities, and integrated land use – even with rising interest rates – often provide upfront affordability and an investment that will appreciate over time. And remember, to look into and research suburbs on the fringe of each growth corridor, you might snap up a good buy, keeping in mind this property buy doesn’t need to be your forever home – but could provide you with future equity to make bigger property decisions down the track. Contact your local First National Real Estate agent to discuss securing your future gains today.