State of Markets – SA March 2012
Essential information, plus expert insight on what is shaping the national property market...
- $4.8bn: Value of infrastructure assets in SA
- 83.81%: Population increase in Adelaide 2012-2031
- 1.9%: Current Adelaide vacancy rate
‘Iron Triangle’ to lead SA growth
The regional property market in South Australia, led by towns near BHP mines, should see price growth in 2012, Real Estate Institute of South Australia president Greg Moulton has said, following the release of new data by the state government.
Mr Moulton, who is also CEO of Brock Harcourts Adelaide, predicted a surge in prices in towns within close proximity of several mines.
“The three towns we call the ‘Iron Triangle’ – Whyalla, Port Augusta and Port Pirie – will experience stronger growth in 2012,” he said.
Mr Moulton also predicted property prices in other regional towns like Mount Gambier and Riverlands will also rise quickly.
“The lifestyle in regional South Australia is great, but over the last year the area has endured some tough times. We are looking to 2012 with renewed optimism,” he said.
The median house price for regional SA homes sat at $251,250 at the end of the December 2011 quarter.
Superway a green light for Adelaide
Construction of the $842 million South Road Superway is now underway, putting Adelaide well and truly on the investment map.
Set for completion in December 2013, the 4.8km development, of which 2.8km is elevated roadway, is the first of its kind in South Australia.
The federal government has committed $500 million to the program under the Nation Building Program Act as part of the north-south corridor upgrade.
As the biggest single investment in South Australian road infrastructure, the Superway links the Port River Expressway to Regency Road and should cut travel times significantly.
Construction of the project will create more than 2,700 jobs.
Local connector roads were completed in 2011 and the state government expects the project will open up the region and make the Port of Adelaide and key industrial hubs more accessible.
- 2.5: persons per household (ABS)
- 5.47%: Gross rental yield (units), Greater Hobart
- 44/45: Average predicted population age, 2021
Hobart redesign to attract residents
Hobart’s Inner City Action Plan’s 15 key projects are set to encourage inner city living and stimulate long-term activity, according to the city Council.
The first set of projects, including street upgrades and the improvement of local public transport, has been endorsed, Lord Mayor Alderman Damon Thomas said.
“These include upgrading Liverpool Street between Murray and Elizabeth Streets to coincide with the construction of the new Myer development,” Mr Thomas said.
“We’re about to enter an exciting phase in the evolution of our city, one that’s very likely to bring increased prosperity and greater vitality to our inner city.”
The Liveable Cities plan includes an analysis of public transport operation within the city.
Improving access from the Brooker Avenue to the Domain is high on the list.
“This will be no ‘quick-fix’ plan; it will take a number of years and be dependent on funding. Importantly, the Council has endorsed in principle the Gehl Report as a key strategic reference for the future development of the inner city area.”
Brighton bypass to be completed early
The Brighton bypass, which will cross the Jordan River, will be completed six months earlier than expected, said Department of Infrastructure, Energy & Resources general manager, roads and traffic, Peter Todd.
The $191 million project (up $15 million on previous estimates) will be completed by the end of 2012. The bridge is 165m long and part of a 9.5km four-lane dual carriageway.
The project links the Midland junction and East Derwent Highways to the north side of Pontville. The southern part of the project has been open since December 2010.
Initial estimates had put the final completion date at March 2013.
New infrastructure an investor boon
Victoria’s regional rail link is going ahead, with numerous companies being given some of the $1.6 billion worth of government contracts – and property investors eyeing the increased appeal the new infrastructure will bring.
“The corridor has been set aside for so many years with a view to having a rail line through here as development proceeded, and that work is now contracted,” Victorian Premier Ted Baillieu announced recently.
The project includes 30km of new track, with new stations planned at West Footscray, Wyndham Vale and Tarneit. It will be completed in early 2016.
“The work is under contract and underway, and that’s a real positive for this region, and a positive for the rail network, a positive for the project, and I believe a great positive for the Victorian economy,” Mr Baillieu said.
The three packages that make up the project come to $800 million, $500 million and $270 million respectively and is believed to be Australia’s largest public transport development to date.
Victorian coast to see growth
Coastal areas from Seaford to Inverloch are expected to see 50,000 new homes by 2026. A government plan targets areas where population growth is expected to soar above the state average and the Bass Coast falls within this category.
The region is set to see an injection of 13,400 extra homes within the next 14 years.
According to the Victorian Coastal Strategy, areas within an hour and a half of a city or major town are the main growth areas.
Infrastructure projects, including new freeways such as the Peninsula Link, are opening up the areas further for residents.
‘Activity centres’ also identified in the Melbourne 2030 plan will continue to be “the focus of further intensification of activity and development.” The centres include Frankston, Williamstown and Mornington.
Housing values to surge in Perth
While units outperformed houses in Perth last year, there will be a resurgence in house prices, according to a new study.
House prices saw a downturn of 5.2 per cent in 2011, while units decreased by 3.3 per cent, the Australian Property Monitors (APM) House Price Report found.
However, house prices are set to grow, according to APM forecasts.
“Perth offers one of the best prospects for prices growth in 2012 with a significant increase in buyer activity,” the report says.
“With recessed house prices, together with low levels of new construction and a flood of workers seeking the wages bonanza delivered by nearly $100 billion in mining activity, Perth house prices have the clear potential to rise by a double-digit percentage.”
APM senior economist Andrew Wilson explained that decreases were due to low buyer confidence, particularly over the September 2011 quarter.
“Buyer wariness over the quarter was exacerbated by growing concerns over the state of the international economy, a weakening stock market and
a softening of economic activity,” he said.
BHP confirms $690m Pilbara project
BHP Billiton has confirmed that a satellite mine project worth just under $690 million will be developed in the Pilbara region.
The Orebody 24 mine is part of the Mt Whaleback operation, the world’s biggest single-pit, open-cut iron ore mine.
“Orebody 24 is a sustaining mine to maintain iron ore production output from the Newman Joint Venture operations,” BHP Billiton said in a statement.
Production is set to begin later this year.
The building of the mine includes construction of a train loadout facility, a rail spur and other supporting infrastructure.
“The Orebody 24 development is consistent with our strategy to invest in high quality, expandable resource basins and highlights the benefits of our ability to leverage existing infrastructure to sustain current production,” Iron Ore president Ian Ashby said.
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