As discussed in NAB’s Australia’s Engine Room. Greater Western Sydney: A story of entrepreneurship and ambition report, GWS is a powerhouse of economic growth.
The region produces one-third of Sydney’s economic output, contains one in 11 people across Australia, contains two-thirds of Sydney’s new residents, and over the next decade the population is predicted to grow by 25 per cent to 3.2 million.
Businesses seem to be recognising the opportunity for growth in the region, with overall business lending up 9.9 per cent from last year. This outshines the total growth for Australia at 8.1 per cent and NSW at 7.1 per cent.
The 10 industries that saw the highest growth were:
- Education (18 per cent)
- Sport and recreation (17 per cent)
- Hospitality (15 per cent)
- Construction (13 per cent)
- Personal services (12 per cent)
- Transport (11 per cent)
- Manufacturing (10 per cent)
- Property services (10 per cent)
- Personal and household goods wholesaling (9 per cent)
- Business services (9 per cent)
Parramatta is expected to see plenty of commercial growth as office spaces crop up. NAB said that “yields softened by 0.25 per cent on the upper end and 0.75 per cent on the lower end to range between 5.88 per cent and 7.25 per cent. The Parramatta headline vacancy rate decreased 0.8 per cent to 24.2 per cent.”
The recent completion of Parramatta Square is also driving growth as tenants are moving into the newly constructed area.
NAB said: “GWS industrial vacancy levels remain at record low levels – around 0.5 per cent – and are aligned with wider Sydney. Positive face rental growth continues, with year-on-year growth of 30 per cent (above wider Sydney at 23 per cent). Headline yields from prime properties are now at 5.5 per cent, having eased 0.31 per cent over the final quarter of 2023, according to CBRE, with secondary property yields 6–6.5 per cent.”
Residential lending is expected to boom too, aligning with the predicted population growth. NAB noted that GWS can “expect new builds to blossom … Land and property valuations have held up well across GWS, despite headwinds in national markets.”
In fact, the top five growth suburbs across GWS were:
- Auburn 16.1 (per cent)
- Blacktown (15.3 per cent)
- St Marys (15.0 per cent)
- Mount Druitt (13.7 per cent)
- Merrylands/Guildford (13.6 per cent)
“The GWS property market is a rapidly evolving space and it’s thrilling to watch the transformation of the region happening before our eyes. For businesses and investors, as well as home owners, there are plenty of exciting new developments on the horizon,” said NAB.
The commercial and residential landscape of GWS is looking promising. With growth expected and borrower numbers increasing, GWS could become a hotspot for investment.
[Related: NSW increases housing targets]