The Liberal Party victory in last week’s New South Wales state election is set to deliver new investment and development opportunities in western Sydney on the back of a major infrastructure pledge.
The right-leaning Liberal Party, led by NSW premier Gladys Berejiklian, returned to power on a platform that included A$89.7 billion of investment into transport, hospitals and schools.
The investment will give further momentum to the western Sydney region which already contributes eight percent to Australia’s gross domestic product, says James Kennedy, Head of Government & Public Institutions in Strategic Consulting, for JLL Australia.
“Roads and rail projects will enable connectivity both within western Sydney and across the metropolitan area, plus there’ll be new impetus for residential development with supporting retail capacity, and further opportunities in logistics, building on the capabilities of the Moorebank Intermodal Terminal.”
Major infrastructure projects confirmed over the weekend include extensions to the Sydney Metro rail network, including the Metro West arm from Parramatta to Sydney city, which will be kick started with an A$18 billion investment.
Berejiklian has flagged that a re-elected federal coalition government will commence construction of this link in 2020.
An additional A$2 billion will be allocated to a new rail line from St Marys to the new Western Sydney International (Nancy Bird-Walton) Airport at Badgerys Creek.
Western Sydney offers significant opportunity for local and foreign investors searching for yield and asset growth, says Kennedy.
Small private investors as well as large funds have been buying and selling land to cash in on rising land values, particularly since the government announced it would build the airport in May 2017.
Infrastructure spending in western Sydney has long been a priority for the Liberal government, underpinned by The City Deal – a set of commitments by local, state and federal authorities to improve the economic performance of the region including the development of the new airport, and a A$80 million “mega TAFE” secondary education campus.
The Moorebank Intermodal Terminal, currently under construction, is another example of enabling infrastructure, funded by the Australian government to transport freight by rail from Port Botany and serve logistics centres in Sydney’s south-west.
However, forecast slow economic growth in NSW could take the momentum out of the investment pledges. Growth in GDP and employment is forecast to slip in the 2020 financial year, becoming the slowest of all the Australian states by the 2021 financial year, according to BIS Oxford Economics.
But the imperative from all levels of government to boost Western Sydney’s economic performance will overcome short-term blips, says Kennedy.
“The region is absolutely central to population and jobs growth and for that reason sustainable and well-considered development will be easier to progress than anywhere else in Sydney.”
Further economic developments will emerge on April 2 with the Australian federal budget and announcement of a date in May for the federal election.
Click to read more about what’s in store for Australia’s property markets in 2019.