Industrial land values on the Central Coast have shown solid growth over the past few years, and we expect more growth to come. This is great news, as an increase in land value signifies an increase in the strength of the economy, meaning the Central Coast is a very healthy region to be investing in.
This article outlines the key drivers that have contributed to this growth, so you as a developer or owner-occupier can identify the right investment opportunities for you.
Positive drivers for the land value growth
Continued low interest rates
Low interest rates help to underpin values for developers looking to on-sell strata title units. It has also made development appealing for owner-occupiers looking to purpose build a facility, and has attracted strong interest from buyers looking to own a factory rather than lease one. Ultimately what all this means is greater growth.
Growth in sale values for improved land
As briefly touched on above, occupiers and investors have been taking advantage of the low interest rates and buying their own properties, rather than renting. This creates demand and therefore uplift in the values of existing buildings and/or developments.
The increased value for improved (developed) land has a flow on effect to the value of land because:
a) There is better margin for developers to purchase land and then on-sell the completed development.
b) An owner-occupier may get better value from buying land and developing to suit their needs, rather than buying an existing building.
This creates a balancing act where the value of existing buildings increases, and generates more demand for land. Land values then rise as a result of this increased demand, which in turn creates more value in improved land (existing buildings), and the cycle continues.
Good value in our residential market
This may not seem immediately intuitive, but more and more people have been relocating from Sydney and Greater Sydney to the Central Coast, thanks to the value and quality of life we offer – housing is comparatively more affordable, together with a more relaxed lifestyle close to the beachside.
Alongside this, many look to relocate their businesses here too, as it offers greater convenience and again they’re able to capture a better value proposition. So all this adds an extra layer of demand in our market, which has helped to drive growth in the industrial market.
Industrial land values in Sydney have sky-rocketed in the past few years
In the last number of years, industrial land values in and around Sydney have increased exponentially. Core industrial markets, such as Wetherill Park, have seen land sales increase up to $1,500 per sqm – that’s around 6x higher than the average rate on the Central Coast.
Even outer areas of Western Sydney are achieving rates up to $1,000 per sqm, or around 4x our average rate.This shows that the increase in demand is sprawling and values are rising significantly across a broader region.
Due to these increases, buyers are looking for better ‘value’ in nearby markets. These buyers are a mix of developers and owner-occupiers, which is generating further demand in our local market.
Faster travel times to Sydney and beyond
As infrastructure improvements continue to be made, the Central Coast has become increasingly popular. Better roadways and more direct routes mean greater efficiencies for transport and logistics, and the soon to be completed north-connex will create faster connections from the Coast to Sydney.
This again makes the Coast a viable and competitive option.
What this means for you as a developer or owner-occupier
As you can see, here on the Central Coast there have been, and continue to be, many positive drivers contributing to the popularity of the region and the growth of our industrial market.
Seeing how values have grown in nearby industrial markets too, we are excited for the further growth that lays ahead in our region.
So if you’re looking to invest, there could be some great opportunities for you on the Central Coast.
If you would like to discuss these opportunities and how they specifically relate to you, please get in touch and we’ll be happy to help.