The NSW Department of Planning recently released a “migration report” which examines migration patterns in six greenfield submarkets over the two most recent census periods. This report found that up to 72 per cent of those moving to greenfield areas come from the same local government area or a neighbouring area.
The Government has used this information to assert that the supply of land for new homes on the fringe has little direct impact on demand or house prices in more established suburbs. This may be true, although this explanation seems to overlook the fact that in the last four years, median rents for three bedroom houses in outer suburban Sydney have soared by 44 per cent. That’s an average annual increase of 9.5 per cent. Clearly land release would impact on rents in outer suburban Sydney (in our opinion).
Of the six submarkets, the top three are the Rouse Hill, Liverpool and West submarkets. Rouse Hill is the largest submarket, with the highest proportion of movers purchasing their own homes and the highest proportion of couples with children. Liverpool is the second largest submarket with 33 per cent of movers coming from the Liverpool council area and 25 per cent from the neighbouring Fairfield council area. The “West” submarket is the third largest with 61 per cent of movers from Blacktown and Penrith council area and around 11 per cent from seven adjacent local councils including Parramatta, Holroyd and Blue Mountains.
The report says that there are a number of demand drivers such as housing preference, affordability and location. However, one of the most important drivers is demographic change in the region.
The full report is here and the Government media release is here.