Investors should look west, says NAB

Image source: https://business.nab.com.au/

Western Sydney Airport is just the first chapter in the economic revolution that is re-shaping Greater Western Sydney, bringing new industry, investment and jobs to the region.

The big four banks are usually cautious when making economic forecasts, but the National Australia Bank has broken ranks in its latest assessment of Greater Western Sydney – which it calls the “engine room of Australia’s economy”.

A NAB Horizons Special Report, just published, paints a glowing picture of Greater Western Sydney (GWS), which it predicts is on the cusp of a new ‘gold rush’, sparking a huge demand for both residential and commercial property. [1]

“GWS, already home to 1 in 11 Australians, is set for a population explosion,” according to the report. “The region is predicted to grow by 25% to 3.2 million over the next decade.”

Lead author Julie Rynski, from NAB Business and Private Banking, believes that the region’s economy is poised to boom as cost-of-living pressures begin to ease in coming months.

“For generations of Australians, Greater Western Sydney has been the place to join a community, raise a family and build a business,” she writes.

“But it’s also where the spirit of entrepreneurship has burned bright as the region has quietly developed into the engine room of Australia’s economy.”

Greater Western Sydney consists of 14 local government areas in the western part of metropolitan area, stretching from Parramatta to the Blue Mountains and south to Campbelltown. [2]

Destined for greatness

The opening of the new Western Sydney Airport in 2026 is the most visible symbol of the growing economic might of GWS but is actually part of a suite of exciting new infrastructure projects including the M12 upgrade and new Metro service.

The new aerotropolis, which will operate round the clock, will create 35,000 new jobs, bring 10 million new visitors annually and inject upto $24 billion into the local economy each year.

GWS is already a magnet for migrants and young families, but will grow rapidly over the next two decades, absorbing two-thirds of Sydney entire population growth over that period.

“Many new residents will be young, and many will be new arrivals. Students, both local and international, are already being drawn to GWS, attracted by the expanding campuses of Western Sydney University,” according to the report

“New arrivals to GWS are likely to be skilled, or up-skilling through training and education, and excited about joining communities and building families.”

The bank is impressed by the strong investment in key business areas such as education, sport and recreation, hospitality and construction – the top four growth sectors.

“Across the board, businesses in Greater Western Sydney are borrowing to invest at a rate outpacing the [Australian] economy at large,” said the bank.

“Overall, lending to businesses in the region grew by 9.9% in 2023, compared to 7.1% for the rest of NSW and 8.1% for Australia.”

Growing demand for property

NAB is equally bullish about the residential property market which it says will continue to benefit from the population explosion that is already transforming western Sydney.

The bank predicts that established business hubs such as Parramatta will attract further development activity, alongside a number of emerging suburbs that are also set to blossom.

“The GWS property market is a rapidly evolving space and it’s thrilling to watch the transformation of the region happening before our eyes,” according to the NAB Horizons report.

St Marys (Carson on the Park) and Merrylands (The Gladstone Village) are among the region’s top performing suburbs recording year on year price rises of 15% and 13.6% respectively for the period ending May 2024.

The report says the GWS property market will continue to evolve rapidly over the next few years – providing opportunities for homeowners, businesses and investors alike.

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Sources:

[1] Australia’s Engine Room (NAB Horizons Special Report).

[2] Western Sydney University website