How to Identify Real Estate Hotspots #03: Urban Renewal & Government Policy

By September 29, 2017Buying, Investing

The Ugly Duckling process is a natural evolution. Core Category #03 is a planned process, with direct and major intervention from government.

There are three main ways in which government intervention can influence real estate:-

• Through a planned process of urban renewal targeted on specific areas;
• Through regional plans designed to cope with growth across an entire city; and
• Through proactive action by energetic local councils.

Most of our capital cities have regional plans which purport to control expected population growth for the next 10, 20 or more years.

The Queensland State Government announced the South East Queensland Regional Plan in 2005 as the blueprint for how the Gold Coast, Brisbane and the Sunshine Coast will evolve over the next two or three decades. (It’s been updated more recently.)

There were many key points in that plan for property investors. One was that the Government planned to absorb some of the population growth through in-fill, allowing more medium and high density development – i.e. more apartments and townhouses. This tended to make houses in good-sized allotments more valuable, particularly in the inner-city and middle-ring suburbs, because over time there will be relatively fewer of them.

It also planned to funnel more of the population down the Ipswich corridor, which stretches south-west from Brisbane to the satellite city of Ipswich and has evolved into one of the major growth regions of Australia. The Government has also earmarked Beaudesert Shire (now amalgamated with a neighbour to form
the Scenic Rim Regional Council) as an area to absorb much of the metropolitan sprawl in the future.

The NSW State Government also has a strategy for Sydney which requires existing suburbs to absorb an extra 640,000 homes over the next 25 years. Again, this needs to occur largely through medium and high-density dwellings – and that would tend to make houses on good-sized blocks of land more valuable over
time.

These has been a relaxation by many Sydney councils of what can be done with standard residential properties – for example, allowing the construction of granny flats or other dwellings on land that previously contained only one house.

The Victoria State Government recently announced its metropolitan planning strategy which gave more importance to suburban hubs such as Sunshine in the city’s west.

At a more micro level, there are urban renewal programs. Most cities have urban renewal processes, which target specific suburbs for rejuvenation, either by converting industrial uses to residential or by renovating older housing stock.

Many local councils have revised their town plans to allow greater levels of infill development and higher development densities in existing suburbs.

These kinds of programs can transform areas that were formerly run-down into lively precincts.

In Perth, the Metropolitan Redevelopment Authority is having a significant impact on property markets in areas such as Armadale in the south-east.

In Brisbane, the Urban Renewal Task Force transformed rundown areas by removing industrial uses and injecting new residential, usually in riverside inner suburbs such as Teneriffe, Newstead and West End. Now the new Urban Land Development Authority is bringing big changes to Bowen Hills and Woolloongabba.

Areas with energetic local authorities can also prosper, on the back of the efforts of a proactive council to encourage and facilitate business development.

Urban Renewal areas to have price booms:

West End, Queensland
Armadale, Western Australia
Sunshine area, Victoria

Locations where proactive councils have boosted markets:

Cairns, Queensland
Sunshine Coast, Queensland
Blacktown, New South Wales

Find this article useful to you?

The next article in this series is How to Identify Real Estate Hotspots #04: Lifestyle Features

This is a joint publication of Snowden Parkes and Ryder Property Research.

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