Sydney and Melbourne have historically attracted a big portion of overseas migrants coming to Australia.
This is no surprise as both cities have established themselves as hubs for business and finance, culture and arts, sports and entertainment as well as employment opportunities.
Local and international migration to boost demand
While the recent pandemic and lockdowns caused some interstate migration from New South Wales and Victoria into Queensland and other states, there are indications that the tide is turning. And most likely we will see more people moving back to Sydney and Melbourne.
At the same time, with Australia’s borders now open to international travels, it will be interesting to see if overseas arrivals will continue to flock to Sydney and Melbourne surrounds as they did in the past.
In his most recent analysis of growth areas for the next 12 months, Domenic Nesci, co-founder at Wealthi, highlighted 10 areas in Sydney and Melbourne that are expected to attract the highest number of overseas migrants.
Based on Australian Bureau of Statistics’ numbers, these areas have proved attractive to international migrants. Historical data from the ABS showed that these areas and suburbs attracted the largest number of international migrants over the past few years.
In this article, we’ll focus on the top 5 Sydney growth areas. We’ll examine the growth drivers and how will they impact property investments in those areas. ABS identified these areas as:
· Inner South West of Sydney
This area attracts a wide range of migrants due to their proximity to train stations, bus services as well as different ethnic communities. The Southern side of the region also features beaches and access to national parks, which tend to attract young and growing families.
Recognised as another major CBD in the greater Sydney area, Parramatta is now an established hub for business and commercial activities. The massive infrastructure build in the area during the past few years has added to the region’s attraction to all types of migrants including professionals and students.
With more infrastructure planned in the coming years that will link Parramatta to other Sydney regions, this area will continue to see growth in the next several years with many young families and professionals choosing to live in the area.
· City and Inner south
There’s no doubt that Sydney City remains one of the top places where migrants want to settle when they come to Australia. With all the amenities – universities, tourist and cultural attractions, transport services and a vibrant community – Sydney will always be a magnet to a wide range of population.
The Inner south area which includes Newtown, Redfern, Waterloo and Roseberry, is also an established spot popular to young professionals. The fact that it is close and accessible to and from the Sydney CBD and the international airport adds to its attraction.
· Inner West
Approximately 4-10 kilometres from the Sydney CBD (from the different boundaries), the Inner West of Sydney includes the suburbs of Petersham, Rozelle, St Peters, Stanmore, Summer Hill, Sydenham and Tempe.
Some suburbs in this region have seen more gentrification than others over the past few years. But with more people preferring to live near the CBD (but not in it), these suburbs offer the accessibility and affordability to a huge segment of the ppopulation.
· Eastern suburbs
Sydney’s Eastern suburbs usually attract those who like the proximity to the beaches plus the accessibility to the CBD.
“With migration starting to pour back into Australia, there are already signs of rising demand for affordable accommodation.” Domenic
What will drive growth in these top 5 areas?
With international borders open, we are starting to see the return of overseas migrants. And this we will see increasing demand for units, apartments and townhouses as many migrants seek medium-term accommodation while they try to settle in Australia.
As most migrants coming to Australia now are highly-qualified and skilled professionals who can contribute to the job market, this will translate to potential higher rental income for property investors.
International students represent a substantial segment of tenants that require accommodation in many Australian cities and regional areas. With international students allowed to come back, inner city suburbs and those located near universities and schools will also see higher demand for rental properties.
Whether you have existing investment properties in these areas or if you are looking to invest in properties in some of these suburbs, it’s worth noting that the expected population growth and planned infrastructure and other developments can boost the value of properties in the years to come.
If you would like to discuss the Australian property market in more detail, please reach out to the team to organise a time to have a conversation about how Wealthi can help you build a successful property portfolio.
Eva Diaz is a communications specialist with focus on the financial markets. Connect with Eva.