Terry’s View: Follow The Infrastructure Trail
One of the fundamental factors that can turn a real estate location into an out-performer is investment in new infrastructure – and right now, Australia is investing more than ever before.
The level of infrastructure investment currently occurring in the nation is unprecedented, in my experience, which is more than 40 years of researching and writing about real estate issues. Projects underway or completed in 2024 across Australia totalled well over $500 billion, with another $370 billion worth in the advanced stages of planning.
These projects include hospitals, universities, airports, motorways, rail links, ship-building enterprises and major energy projects like wind and solar farms. Partly, at least, the level of construction of big infrastructure developments was inspired by the economic damage caused by the Covid lockdown periods and a desire by governments to bring on big-ticket projects to generate economic activity and jobs to avoid recession.
These developments can have huge impacts on property markets because they create demand for workers and for businesses that provide products and services. And the impacts can be long-lasting. Suppose a new $1 billion hospital is planned. In that case, it may create 3,000 or 4,000 jobs in construction – but have an even bigger impact after it is completed because there are often as many as 6,000 jobs in the operation of this major facility.
I recently conducted an analysis of infrastructure investment in the capital cities and regional areas of Australia on a per capita basis – in other words, the level of spending relative to the population of the city or regional jurisdiction.
And the places with the biggest impacts from current and planned infrastructure were Darwin, Brisbane, Adelaide and Melbourne, among the capital cities, and the regional areas of Queensland and South Australia.
It’s a key factor to look for when considering good places to buy for future capital growth. A location with a big program of infrastructure development will always have rising house prices.
