How to Identify Real Estate Hotspots #10: Jobs Nodes

By April 16, 2018Investing

Among many reasons why affordable areas often record strong capital growth rates is their proximity to employment nodes.

Factories, industrial estates, logistics centres, regional shopping centres, seaports, airports, office parks, hospitals, universities, theme parks and many other centres of major employment reside in the suburbs, often a long way from a city’s CBD.

Proximity to work is a major influence on the choices of homebuyers and tenants. A recent study by Westpac found that this was the single biggest locational factor in the choice of properties by home-buyers.

Hotspotting research indicates that this factor is part of a “holy trinity” that is one of real estate’s power combinations: affordability, transport infrastructure and jobs nodes.

Increasingly the location of employment nodes is influenced by the development of road infrastructure. Motorway upgrades have generated a shift in emphasis for industrial estates and logistics businesses – examples include the relocation of many big operations with major warehousing needs to the north of Melbourne (around the Metropolitan Ring Road and the Hume Highway) and to the west of Sydney (near the intersection of the M4 and the M7 around Eastern Creek).

A 2016 study found that the location in the Melbourne metro area with the highest level of “stickability” (i.e. residents who moved there stayed long-term) was the Epping precinct in the far north. This is an area of major employment nodes, as well as very good (and improving) infrastructure, including road networks and expanding rail links to central Melbourne.

The emergence of Blacktown as a centre of economic and real estate growth has been influenced by the presence of education and medical facilities (always big job nodes) and proximity to the M4/M7 intersection. And in 2015, the Blacktown LGA was the No.1 growth area in Sydney in terms of land values, according to the NSW Valuer-General.

The Blacktown LGA is part of the strongly-emerging Western Sydney economy, which will be greatly strengthened with the construction of the Badgerys Creek airport, associated infrastructure and surrounding industrial precincts.

Growth markets influenced by proximity to jobs nodes:

  • Dandenong, Victoria
  • Northern suburbs of Brisbane, Qld
  • City of Casey, Victoria
  • Blacktown, New South Wales
  • Epping precinct, Victoria
  • Rockingham City, Western Australia

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

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