LOWES CREEK MARYLAND · 2019. 8. 2. · LOWES CREEK MARYLAND HOUSING & MARKET NEEDS ANALYSIS iv...

LOWES CREEK MARYLAND HOUSING MARKET NEEDS ANALYSIS

CAMDEN COUNCIL SEPTEMBER 2017

LOWES CREEK MARYLAND HOUSING & MARKET NEEDS ANALYSIS

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DOCUMENT CONTROL

Job ID: J000449

Job Name: Lowes Creek Marylands

Client: Camden Council

Client Contact: Louise McMahon

Project Manager: Esther Cheong

Email: [email protected]

Telephone: 02 9283 8400

Document Name: LCM Housing Market Needs Analysis final reissued

Last Saved: 21/9/2018 12:09 PM

Version Date Reviewed Approved

Draft 29/09/2017 JV EC

Final Draft 8/12/2017 JV EC

Final 29/08/2018 JV EC

Final reissued 20/09/2018 JV EC

Disclaimer:

Whilst all care and diligence have been exercised in the preparation of this report, AEC Group Pty Ltd does not warrant the

accuracy of the information contained within and accepts no liability for any loss or damage that may be suffered as a result of

reliance on this information, whether or not there has been any error, omission or negligence on the part of AEC Group Pty Ltd

or their employees. Any forecasts or projections used in the analysis can be affected by a number of unforeseen variables, and

as such no warranty is given that a particular set of results will in fact be achieved.

mailto:[email protected]


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EXECUTIVE SUMMARY

BACKGROUND

The Sydney Growth Centres Program was established in 2005, enabled by State Environmental Planning Policy

(Sydney Region Growth Centres) 2006 (Growth Centres SEPP) to develop new communities, homes, employment

areas, health and education facilities and key infrastructure facilities within designated greenfield areas.

The two growth centres initially established were the North West and South West Growth Centres. The North West

Growth Centre was renamed North West Growth Area and the South West Growth Centre renamed South West

Growth Area. Following the Commonwealth Government’s announcement to develop the Western Sydney Airport

at Badgerys Creek, the South West Growth Area underwent a boundary change to create Western Sydney Growth

Area (WSGA) and South West Growth Area (SWGA). A third greenfield release area in western Sydney is the

Greater Macarthur Growth Area (GMGA) which was established in 2016 to include the areas of Wilton, Mt Gilead

and Menangle Park.

The SWGA now comprises circa 10-13 precincts, with parts of Bringelly, Rossmore and Leppington North falling

within the new boundaries however detailed alignment of both Growth Areas is still under review. The Lowes

Creek Maryland Precinct (referred to as the ‘LCM’) falls within the boundaries of the SWGA.

The Context Area is bordered by The Northern Road to the east, Greendale Road to the north, Cobbitty to the

south and the Nepean River to the west. A site in LCM is currently being progressed for early release and rezoning

as per the Precinct Acceleration Protocol (PAP) program.

AEC Group (AEC) have been engaged by Camden Council to prepare a Housing Market Needs Analysis (the

Study) to inform precinct planning. Collectively, LCM and the Context Area are referred to as ‘the Study Area’.

PURPOSE & APPROACH

The broad objective of the Study is to provide an understanding of demand for housing and market appetite for

different dwelling typologies and densities within the South West Growth Area (SWGA). The Study is to assist

Council in the preparation of a structure plan and Indicative Layout Plan (ILP) for LCM.

AEC’s scope comprises the following tasks:

• Review of background information and statutory planning framework, including previous housing studies.

• Identify economic and market trends that influence future housing requirements in the SWGA and surrounds.

• Investigate the nature of housing supply and development activity in the SWGA and surrounding markets.

• Project housing demand (in different growth scenarios) for the SWGA.

• Identify the capacity of LCM (and Context Area) to ‘capture’ and accommodate projected housing demand.

• Make recommendations to accommodate residential growth effectively in LCM and the Context Area.

KEY FINDINGS

Economic and Market Trends

Lower than expected actual dwellings growth compared to projected growth over the 2011-2016 period resulted in

a foregone opportunity to meet housing demand. This resulted in an unmet housing need, characterised by rising

rents and prices and rising household sizes across parts of Sydney.

Housing affordability within metropolitan Sydney is a focal point of public commentary and recent Federal and State

government focus. The transition to higher density living has been inevitable as a result of rising house prices,

lifestyle preferences for low maintenance property with high amenity and a shrinking average family size. That said,

in areas of western Sydney where there is availability of existing houses at comparable pricing, market acceptance

of high-density product has been slower as detached houses compete with new apartment product.


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With affordability becoming a key consideration for many younger households, the shift towards smaller dwellings

and lot sizes in many greenfield precincts such as the NWGA and SWGA has gained momentum over the past 12-

24 months. Developers have responded in-kind within the SWGA; numerous residential subdivisions progressed

over the course of 2017 have comprised high proportions of lots sized from 225sqm to 300sqm.

Affordability and level of surrounding infrastructure drives market preference and compromise in the SWGA. Market

observations indicate lots sub-300sqm and/or house and land packages sub-$700,000 are particularly appealing

to first home buyers (FHBs). This has also transcended into appeal for medium-density style product, where strong

interest for land and dwellings on lots circa 200sqm has generated strong responses from the market.

Whilst smaller lots are continuing to receive swift take-up rates, the most popular lot sizes remain at 350sqm-

400sqm. Two door garages are particularly popular, owing to the lack public transport options in many estates and

two-car lifestyle of purchasers. The importance of garages is strong despite availability of public transport in some

precincts. Car spaces are of even more importance in areas where no transport alternatives exist (e.g. Cobbitty).

Owner occupiers are understood to be the dominant purchaser cohort in the SWGA accounting for circa 60%-65%

of all buyers. Of these FHBs and young families are particularly dominant, many relocating from the major centres

of South-West Sydney such as Campbelltown and Liverpool whilst others are relocating from Western Sydney (e.g.

Penrith LGA). A strong investor market is also active within the SWGA with strong interest observed from Sydney-

based investors.

Dwelling Projections

A number of critical developments have occurred over the 2015-2017 period, including funding and planning for

Western Sydney Airport (target 2026 opening), designation of the ‘Western City’ as Sydney’s third city and

government commitment to significant catalytic infrastructure capital works programme.

We have modelled demand scenarios wherein 20% and 30% capture of metropolitan Sydney housing demand is

redistributed to the GAs (South West, North West, Western Sydney and Greater Macarthur) to facilitate housing

opportunities close to future employment centres in the Western City.

Projected Housing Demand

Based on recent census population and dwellings data (2016) as well as DPE’s latest population projections

(September 2016) housing demand was projected by applying the following assumptions and steps:

1 Percentage capture of metropolitan Sydney new housing demand in Growth Areas

a Scenario 1 is based on an expectation of 20% capture of new housing demand in metropolitan Sydney,

which results in a redistribution of dwelling demand to GAs for development. This is termed the ‘Lower

Growth Scenario’.

b Scenario 2 is premised on a 30% capture of new housing demand and residential activity in the rest of

metropolitan Sydney, which is redistributed to the GAs. This is termed the ‘Higher Growth Scenario’.

2 Growth Areas distribution (South West, North West and Greater Macarthur) using qualitative weighted

distribution criteria regarding the anticipated ‘attractiveness’ of each GA relative to each other.

GAs considered in the demand modelling are the former South West Growth Centre (which is now comprised

of South West and Western Sydney GAs), North West GA and Greater Macarthur GAs.

3 Distribution of projected demand to LCM and the Context Area by considering respective supply capacity.

Table ES.1 indicates dwelling demand projections in aggregate for the GAs (South West, Western Sydney, North

West and Greater Macarthur) to 2036.


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Table ES.1: Dwelling Demand Projections by Scenario for GAs (in Aggregate)

Growth Area 2016 2021 2026 2031 2036 Change (2016 to 2036)

Scenario 1 (Lower Growth Scenario)

SWGC* 9,131 21,638 34,893 49,332 64,803 55,672

NWGA 13,465 27,135 39,309 51,530 63,637 50,172

GMGA 10,647 15,712 21,603 27,517 34,131 23,484

Scenario 2 (Higher Growth Scenario)

SWGC* 9,131 27,492 46,728 67,604 89,928 80,797

NWGA 13,465 33,533 51,201 68,869 86,339 72,874

GMGA 10,647 18,083 26,632 35,183 44,727 34,079

*Combination of both SWGA and WSGA excluding Western Sydney AirportSource: AEC, DPE (2014), DPE (2016)

Projected housing demand in South West and Western Sydney GAs to 2036 requires nearly 55,700 and 80,100

additional dwellings in the Lower Growth and Higher Growth scenarios respectively.

Market Demand and Potential Supply Capacity

The opportunity and role for LCM and the Context Area to meet some of the projected demand depends on:

• Availability of services infrastructure.

• Existing lot and ownership patterns.

• Market demand and capacity/willingness to pay for dwellings.

• Nature and magnitude of developer interest.

Market analysis demonstrates strong demand for dwellings in the SWGA which is considered an appropriate proxy

for likely demand at LCM and the Context Area. Affordability issues in conjunction with lifestyle reasons is seeing

a continuing trend towards owner occupier purchasers favouring smaller, denser product.

Looking forward, while smaller and denser residential product is expected to increase, detached houses are still

expected to form the majority of dwelling type, followed by row housing/semi-detached/townhouses and then by

units/apartments. The ability of higher-density product to attract demand within LCM will be largely tied to planned

infrastructure and amenity improvements within the area.

Profile of Market Demand

Market preferences and attitudes are different compared to 10 years ago when the first structure planning for the

South West Growth Centre was completed. Households today (families, couples and lone persons alike) value

lifestyle and convenience. These values pervade all elements of choice including housing choice. While a large

backyard may still be sought after by some, it is generally a reducing requirement driven by cost and attitudes

towards convenience.

The gradual shift towards smaller lot and dwelling sizes is therefore a function of both affordability issues and

lifestyle choices. That said, the former has the greatest level of impact on housing demand within the SWGA as

evidenced from market observations.

Housing affordability and level of infrastructure/amenity provision will continue to influence market preference and

product acceptability in the region. Whilst the newer estates within the SWGA may be of better quality than older

stock within established residential areas around the Liverpool and Campbelltown CBDs, the similar (and in some

cases higher) price points sought within the SWGA will conceivably see more prospective purchasers weigh up

options closer to existing retail amenity and employment opportunities in the short term.

Despite a general fall in investor activity across metropolitan Sydney, investors are notably active in estates where

larger blocks are available. This cohort typically seeks opportunities for dual occupancy and secondary dwellings.

The affordability threshold analysis indicates a greater tolerance of household incomes to rental prices.


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Housing Typology and Mix

Proximity of LCM to the future Marylands train station and retail centre influences its role for higher density product

(units and apartments) compared to the broader Context Area. Detached product is still expected to be the

dominant typology. Table ES.2 recommends potential dwelling mixes in Lower and Higher density scenarios.

Table ES.2: Product Typology and Mix (Lower Density and Higher Density Scenario)

Study Area Dwelling Type (%) Detached Dwellings (%)

Detached Med Density Flats/Units <350sqm 350-450sqm >450sqm

Overall

Context Area 75%-80% 15%-20% 0%-5% 20%-30% 60%-70% 10%

Lowes Creek and Maryland 70%-75% 20%-25% 5%-10% 30%-35% 55% 10%-15%

Lower Density Scenario

Context Area 80% 20% 0% 20% 70% 10%

Lowes Creek and Maryland 70% 25% 5% 30% 55% 15%

Higher Density Scenario

Context Area 75% 20% 5% 30% 60% 10%

Lowes Creek and Maryland 70% 20% 10% 35% 55% 10%

Source: AEC, DPE

The quantum of units that could be provided at LCM would ultimately depend on the respective capacity of retail

centre/s to accommodate multi-unit housing in buildings of 2-4 storeys and 6-8 storeys. Proximity to public transport

and scale of retail facilities are key determinants of the viability of higher density product.

Table ES.3 assigns weighted average densities by dwelling type, mix and lot size result in the Lower and Higher

density scenarios (to calculate average densities in LCM and Context Area).

Table ES.3: Market Densities to Build-Out

Study Area Net Dev. Area

Average Density (dw/ha)

Potential Dwellings


Detached Med Density Flats/Units


Context Area 517.0ha 20.8 10,744 17.5 33.8 67.5

Lowes Creek and Maryland 265.8ha 24.3 6,465 17.9 33.8 67.5

782.8ha 22.0 17,209


Context Area 517.0ha 23.7 12,254 18.1 33.8 67.5

Lowes Creek and Maryland 265.8ha 26.4 7,009 18.4 33.8 67.5

782.8ha 24.6 19,263

Source: AEC, DPE

If the Context Area had the environmental capacity to accommodate 17,500 to 20,000 additional dwellings to 2036,

that would represent a capture of 22%-24% of projected housing demand in the Higher Growth Scenario.

Application of household occupancy rates (in line with DPE’s demography unit’s interpretation of the 2016 census

data) result in 19,874 persons and 20,960 persons in the Lower Density and Higher Density scenarios

respectively.

Recommendations for Context Area and Lowes Creek Maryland Precinct

The Study findings and recommendations are predicated on the following assumptions:

• Marylands train station operational in 2036 likely located approximately 700m east of Northern Road.

• Marylands retail centre (potential 30,000sqm) with large commuter car park.

• Upgrade works to Northern Road to commence shortly to eventually be three lanes in each direction, forming

a physical barrier between the Context Area and Marylands station.

• Two link roads are proposed to run east-west through the Context Area and a sub-arterial road is proposed to

run north-south through the western section of the LCM precinct.


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The likely timing of development in the Context Area and LCM relate directly to provision of regional and services

infrastructure. It is reasonable to presume that industry will meet the market and leverage opportunities as available.

• Spatial Distribution

The spatial distribution of dwelling types should have regard to their relative location with respect to proximity

to public transport nodes (present and future) and retail facilities. Lower density product should be located

around the fringe/frame of a precinct. Market acceptability and viability of higher density product in greenfield

settings is underpinned by proximity to public transport and retail amenity.

• Shift in Focus towards Smaller Dwellings

The direct relationship between affordability (and lifestyle) and smaller lot sizes is well-established, and will

likely persist over the medium-term. The shift towards medium-density and higher-density accommodation is

also growing - townhouses, villas and apartment products have wide market acceptance in the more mature

North West market while precincts such as Edmondson Park and Leppington (within the SW) are poised to

deliver a notable quantum of higher density product over the next 5-7 years.

Tracking the market response to new medium-density and higher-density product within the SWGA is crucial

to delivering an appropriate typology mix in the Context Area, as well as timing of release of such product. The

success of higher density product will be dependent on the quality of amenity that can be established.

• Higher Density Dwellings

Given that retail facilities are not incubators but followers of population growth, the retail centre is unlikely to

be established until such time as a critical mass of residents is established. This follows that any higher density

dwelling product will be a longer term proposition.

• Take-up Rates

At present, a shortage of serviced land has propelled land and dwelling prices. While an undersupply would

ordinarily result in high take-up rates, prevailing price levels have had a dampening effect on demand. While

there is underlying demand, effective demand (the capacity of the market to pay) is challenged.

Assuming pricing is at an equilibrium level, conventional wisdom would suggest a conservative take-up rate

starting from 150-200 lots per annum to potentially a peak of 300-400 lots per annum per estate. Nevertheless,

astute marketing, upfront delivery of community infrastructure and product branding have been observed to

result in phenomenal take-up exceeding 500 lots per annum in some estates even in the first year.

Role of the Study Area

Market preferences and attitudes are different compared to 10 years ago when first structure planning for the South

West Growth Centre was completed. Households (families, couples and lone persons alike) value lifestyle and

convenience. These values pervade all elements of choice including housing choice. While a large backyard may

still be sought after by some, it is generally a reducing requirement driven by cost and convenience.

By applying average densities in Table ES.3 to the Context Area and LCM have a combined dwelling capacity of

25,000 to 30,000 dwellings, representing 30%-35% of projected demand in the Higher Growth Scenario to 2036.

Even though the South West GA may have a theoretical dwelling capacity, it is possible not all land will be

developed. Landowner objectives, motivations and personal circumstances may not necessary align with

development imperatives and in precincts where ownership is highly fragmented, development take-up is expected

to be less than the theoretical capacity for dwellings.

Where housing formats and densities are market-supported (per dwelling types and mix in Table ES.2) it is

necessary to ensure there is greater dwelling capacity than is projected to 2036. The establishment of the Western

City and full operation of the Western Sydney Airport is likely to be beyond the projection timeframe and accordingly

it is prudent to ensure land supply is able to respond to housing demand.

Large swathes of land in majority control close to Bringelly Road (envisaged as a future mixed enterprise corridor)

and future Marylands train station are valuable opportunities. LCM presents an excellent opportunity to meet

housing demand and assist in alleviating pressure on dwelling prices.


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TABLE OF CONTENTS

DOCUMENT CONTROL .......................................................................................................................................... I

EXECUTIVE SUMMARY ........................................................................................................................................ II

TABLE OF CONTENTS ....................................................................................................................................... VII

1. INTRODUCTION ............................................................................................................................................ 1

1.1 STUDY BACKGROUND AND BRIEF ................................................................................................................... 1

1.2 SCOPE AND APPROACH ................................................................................................................................. 1

1.3 STUDY STRUCTURE ...................................................................................................................................... 2

2. THE STUDY AREA ........................................................................................................................................ 3

2.1 GROWTH AREAS AND PRECINCTS ................................................................................................................... 3

2.2 PLANNING POLICY FRAMEWORK ..................................................................................................................... 5

2.3 SOCIO-ECONOMIC ANALYSIS ......................................................................................................................... 8

2.4 INFRASTRUCTURE PROGRAMME ................................................................................................................... 14

2.5 IMPLICATIONS FOR HOUSING DEMAND .......................................................................................................... 16

3. ECONOMIC AND MARKET CONTEXT ...................................................................................................... 18

3.1 ECONOMIC TRENDS AND DRIVERS ................................................................................................................ 18

3.2 MARKET ACTIVITY ...................................................................................................................................... 19

3.3 IMPLICATIONS FOR HOUSING DEMAND .......................................................................................................... 24

4. PROJECTED DEMAND AND SUPPLY CAPACITY ................................................................................... 26

4.1 INTRODUCTION ........................................................................................................................................... 26

4.2 DWELLING DEMAND PROJECTIONS ............................................................................................................... 27

4.3 MARKET DEMAND AND POTENTIAL SUPPLY CAPACITY .................................................................................... 28

4.4 FACTORS AFFECTING HOUSING SUPPLY ....................................................................................................... 30

4.5 IMPLICATIONS FOR HOUSING SUPPLY ........................................................................................................... 32

5. CONCLUSION AND RECOMMENDATIONS .............................................................................................. 34

5.1 TRENDS AND INFLUENCING FACTORS ............................................................................................................ 34

5.2 DEMAND FOR HOUSING IN STUDY AREA ........................................................................................................ 35

5.3 TIMING AND STAGING .................................................................................................................................. 37

5.4 ROLE FOR STUDY AREA .............................................................................................................................. 38

REFERENCES...................................................................................................................................................... 39

APPENDIX A: WESTERN SYDNEY INFRASTRUCTURE PLAN MAP ............................................................... 40

APPENDIX B: DEVELOPMENT PIPELINE ......................................................................................................... 41

APPENDIX C: HOUSING DEMAND PROJECTION METHODOLOGY ............................................................... 47


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1. INTRODUCTION

1.1 STUDY BACKGROUND AND BRIEF

A Plan for Growing Sydney (DPE, 2014) identified the former South West Growth Centre (now the South West

Growth Area and Western Sydney Growth Area) as an important greenfield location for new housing and

employment opportunities.

The Lowes Creek Maryland Precinct (referred to as the ‘LCM’) falls within the boundaries of the South West

Growth Area. LCM is within a broader context area of approximately 1,334ha of rural land bordered by The Northern

Road to the east, Greendale Road to the north, Cobbitty to the south and the Nepean River to the west.

A large landowner within LCM has commenced discussions with the Department of Planning and Environment

(DPE) for release of a 517 parcel of land (referred to as LCM) in accordance with the Precinct Acceleration Protocol

(PAP) which allows proponents to progress planning and development of land within Growth Areas earlier than

contemplated by DPE.

AEC Group (AEC) have been engaged by Camden Council (Council) to prepare a Housing Market Needs Analysis

(the Study) for LCM in response to the PAP-initiated rezoning proposal. Collectively, LCM and the Context Area

are referred to as ‘the Study Area’.

The broad objective of the Study is to assist Council understand demand for housing and market appetite for

different dwelling typologies and densities within the South West Growth Area (SWGA), and in particular

implications for future development of LCM and the Context Area.

1.2 SCOPE AND APPROACH

The overarching objective of the Study is to carry out economic and property market analysis to assist Council in

the preparation of a structure plan and Indicative Layout Plan (ILP) for LCM.

AEC’s scope comprises the following tasks:

• Review of background information and statutory planning framework, including previously completed housing

studies.

• Identify economic and market trends that influence future population and housing requirements in the SWGA

and surrounds.

• Investigate the nature of housing supply and development activity in the SWGA and surrounding markets.

• Project housing demand (in different growth scenarios) for the SWGA having regard to:

o Overall projected population growth in metropolitan Sydney.

o Changes in households and socio-demographic profile.

o Employment opportunities and growth.

o Expectations of infrastructure investment.

o Affordability of, and capacity of households to pay for housing.

• Assess and identify the capacity of LCM (and the Context Area) to ‘capture’ and accommodate projected

housing demand.

• Make recommendations to facilitate and accommodate residential growth effectively in LCM and the Context

Area.

Should a Housing and Market Needs Analysis be carried out for the broader SWGA, we highlight the findings of

this Study may require revision, specifically with respect to LCM and the Context Area’s role and capacity to

accommodate housing in the context of other precincts in the GA.


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1.3 STUDY STRUCTURE

This report focuses on the Lowes Creek Maryland Precinct and its potential role in accommodating population

and dwelling growth.

Chapter 2 provides an overview of the Study Area, including its context within the Growth Area, the applicable

planning policy framework, socio-demographic characteristics and expected infrastructure programme.

Chapter 3 investigates economic and market trends which influence market demand for housing and development.

Market activity is investigated including type of residential product, take-up and price points observed in the South

West region. Development activity is also investigated by examining the level and nature of developer interest, site

assembly and prices paid for development sites.

Chapter 4 projects housing demand (metropolitan Sydney in aggregate) and distributes the aggregate demand to

the Growth Areas based on a number of push/pull factors including the capacity of each growth area (from a

theoretical, services and market capacity) to accommodate that demand.

Chapter 5 analyses the implications of the analysis in the preceding chapters, focusing on the potential capacity

of the Study Area to accommodate projected housing demand in various housing formats and types.

We highlight the role and capacity for the Study Area to accommodate housing demand is considered in isolation,

without consideration to the role and capacity of other precincts in the SWGA.


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2. THE STUDY AREA

2.1 GROWTH AREAS AND PRECINCTS

The Sydney Growth Centres Program was established in 2005 by the NSW Department of Planning and

Environment and Commonwealth Government via the introduction of the State Environmental Planning Policy

(Sydney Region Growth Centres) 2006 (Growth Centres SEPP). The intention of the Growth Centres Program was

to develop new communities, homes, employment areas, health and education facilities and key infrastructure

facilities within designated greenfield areas.

The two growth centres initially established included the former North West Growth Centre and the South West

Growth Centre. The North West Growth Centre (NWGC) is now referred to as the North West Growth Area and

the South West Growth Centre (SWGC) has undergone a boundary change to create the South West Growth Area

(SWGA) and Western Sydney Growth Area (WSGA).

Following the Commonwealth Government’s announcement to develop the Western Sydney Airport at Badgerys

Creek, the Western Sydney Growth Area (WSGA) was established for lands surrounding the proposed airport site.

As a result, the boundaries of the former SWGC have been realigned.

The Greater Macarthur Growth Area (GMGA) was established in 2016 to include the areas of Wilton, Mt Gilead

and Menangle Park.

Of particular relevance to this Study is the South West, Western Sydney and Greater Macarthur Growth Areas.

Former South West Growth Centre

The former South West Growth Centre was approximately 17,000ha in size and straddled the local government

areas of Liverpool, Camden and Campbelltown. The SWGC comprised 18 precincts, eight of which have been

released and/or rezoned for urban development.

Several major employment hubs are located just outside the former SWGC including Liverpool, Fairfield and

Campbelltown CBDs which incorporate major health, educational and retail facilities. Completion of the South West

Rail Link has been instrumental in ‘opening up’ access to and from the region to employment opportunities beyond.

Realignment of Boundaries

In line with formal commitment of Commonwealth funding to the Western Sydney Airport in 2017, the former SWGC

was realigned to form the Western Sydney and South West Growth Areas. The realignment has broadly resulted

in precincts north of Bringelly Road becoming part of the Western Sydney Growth Area with the remaining precincts

south of Bringelly Road forming part of South West Growth Area. Edmondson Park is understood to no longer fall

within a Growth Area following rezoning of the precinct in 2008.

The South West Growth Area now comprises circa 10-13 precincts, with parts of Bringelly, Rossmore and

Leppington North falling within the new boundaries however it is understood that detailed alignment of both Growth

Areas is still under review.

Figure 2.1 illustrates the broad boundary realignment and the newly created SWGA and WSGA.


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Figure 2.1: Boundary Realignment, SWGA and WSGA

Source: DPE

Greater Macarthur Growth Area

The Greater Macarthur Growth Area (GMGA) was formed in 2016 and comprises a number of precincts including

Menangle Park, Mt Gilead, West Appin and Wilton New Town. To date, Wilton New Town is the only precinct

recognised under the Growth Centres SEPP as a Growth Area however it is understood the entirety of the GMGA

will be formally gazetted shortly.

The Wilton New Town, Menangle Park, Mt Gilead and West Appin regions represent new land release areas

opportunities in the GMGA. Several developments have already been progressed within these regions, with a

number of planning proposals for Wilton, Mt Gilead and Menangle Park currently under assessment as per the

Precinct Acceleration Protocol (PAP) program.

Lowes Creek Maryland Precinct

The Context Area and Lowes Creek Maryland Precinct (LCM) fall within the boundaries of the SWGA. The

Context Area comprises rural land on the westernmost border of the SWGA, bordered by The Northern Road to

the east, Greendale Road to the north, Cobbitty to the south and the Nepean River to the west.

The lands are currently utilised for farming, agricultural and rural residential uses and was designated for future

urban development within Growth Centres SEPP as part of the former SWGC.

A 266ha site (LCM) within the Context Area is currently being progressed for early release and rezoning as per the

Precinct Acceleration Protocol (PAP) program. LCM is located circa 9km north-west of Narellan Town Centre and

7km west of the Leppington Railway Station and town centre and includes a 3km frontage to The Northern Road.

A Structure Plan is currently being prepared for LCM in accordance with a Voluntary Planning Agreement entered

into by the Proponent. The Structure Plan is understood to incorporate a broader catchment beyond the Site’s

boundaries, including the parts of the Lowes Creek, Marylands and Bringelly precincts.


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LCM comprises several large lots with little built form observed thereon. A number of lots fronting The Northern

Road are not in contiguous ownership however are included within the overall boundaries of LCM. Lowes Creek

bisects the Site and runs east-west through its centre.

2.2 PLANNING POLICY FRAMEWORK

This section focuses on the policy framework that enables development and delivery of the Growth Areas.

2.2.1 Greater Sydney Region Plan

The Greater Sydney Region Plan (the Region Plan, GSC, 2018a) seeks to accommodate the needs of Sydney’s

growing population into a metropolis of three cities: Western Parkland City, Central River City and Eastern Harbour

City, building on a vision where most residents live within 30 minutes of their jobs, education and health facilities.

The Study Area is located in greatest proximity to the new Western Parkland City.

Figure 2.2: Greater Sydney Region Plan

Source: GSC (2018a)

The Western Sydney Airport is the focus of the Western Parklands City; the City to comprise an ‘aerotropolis’ with

an employment hub of knowledge-intensive jobs focused on transport and logistics, advanced manufacturing and

health and education. As the only ‘greenfield’ city,; the Western Parklands City is envisaged to be well-designed

and provide new neighbourhoods with a high level of amenity and employment choice.

The Liveability Direction (Housing the City) aims to increase housing completions (by type) to support the rapidly

growing population of Greater Sydney. The draft Region Plan identifies a need for an additional 725,000 homes

across Greater Sydney by 2036 with development of housing targets and housing strategies are identified as key

actions in order to secure the sustained, long-term delivery of new housing across Greater Sydney.


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The Region Plan identifies where new housing is to be delivered based on the current infrastructure program and

NSW Government’s Growth Area Program. The Western Parkland City is identified as playing a major role in

accommodating new housing, accounting for circa 25% of the housing supply target to 2036.

Table 2.1: Housing Targets, 2016-2036 (Greater Sydney Region Plan)

District 2016-2021 Housing Supply Target 2016-2036 Housing Supply Target

Central City 53,500 207,500

Eastern City 46,550 157,500

Western City 39,850 184,500

North 25,950 92,000

South 23,250 83,500

Greater Sydney 189,100 725,000

Source: GSC (2018a)

The South West is identified as playing a major role in delivering new housing over the medium to long-term.

2.2.2 Western City District Plan

Building upon the strategic aims and objectives outlined in the Region Plan, the Western City District Plan (referred

to as the ‘District Plan’) sets out a 20-year vision, priorities and actions for Greater Sydney’s Western Parkland

City, which includes the local government areas of Blue Mountains, Camden, Campbelltown, Fairfield,

Hawkesbury, Liverpool, Penrith and Wollondilly.

The District Plan identifies five major housing markets, namely Fairfield, Liverpool, South West (including the South

West and Greater Macarthur Growth Areas, Penrith-Blue Mountains and North West). The District Plan recognises

the different role each of these markets in providing different housing in response to varying levels of demand.

Whilst recognising market factors, the District Plan also considers local housing strategies in developing housing

targets for each respective LGA.

The District Plan outlines a five-year housing target of 11,800 new dwellings for Camden LGA by 2021. This

equates to just under 30% of the total five-year housing target for the Western City District.

Table 2.2: Western City District Housing Supply Targets

Local Government Area 2016-2021 Housing Supply Target

Blue Mountains 650

Camden 11,800

Campbelltown 6,800

Fairfield 3,050

Hawkesbury 1,150

Liverpool 8,250

Penrith 6,600

Wollondilly 1,550

Western City 39,850

Source: GSC (2018b)

A key action of the District Plan is for local councils to prepare housing strategies which outline how delivery of the

five-year housing target will be achieved, in addition to a 6 to 10-year housing target. Housing strategies should

also outline the capacity of local government areas to contribute to the long-term strategic housing target for District.

In addition to providing housing targets, the District Plan also outlines a centres hierarchy for the Western City; the

hierarchy based on the role, function, size and catchment of each centre as well as future expected residential

development and population.

The economic and employment benefits of the Western Sydney Airport (WSA) and their implications for the

Western City District are broadly outlined in the District Plan. The ability of the SWGA to leverage off this game-

changing piece of infrastructure by providing a range of housing types in close proximity to the WSA is a key

strategic goal of the District Plan, serving to further develop the Western City.


7

‘Western City’

A central component of the Draft Plan is the establishment of the ‘Western City’ - a city centred around the Western

Sydney Airport and Badgerys Creek Aerotropolis which will create a once-in-a-generation economic boom, bringing

infrastructure, businesses and knowledge-intensive jobs for residents.

Planning for the Western Sydney Airport and Badgerys Creek Aerotropolis will be coordinated through the Western

Sydney City Deal which will involve collaboration between the Greater Sydney Commission, Australian

Government, NSW Government and local councils of Blue Mountains, Camden, Campbelltown, Fairfield,

Hawkesbury, Liverpool, Penrith and Wollondilly.

The significant investment into the region supported by long-term strategic planning has direct implications for the

Study Area’s importance as a residential area supporting the future Western City.

2.2.3 Residential Planning Controls

Development control plans provide the planning, design and environmental objectives and controls against which

development applications are assessed. In accordance with respective development control plans, minimum lot

sizes for each dwelling type must comply with the minimum lot size provisions permitted by the Growth Centres

SEPP.

Given the Study Area falls within the Camden LGA boundaries, future urban development within the Study Area

will be governed by both the Growth Centres SEPP and future amendments to the Camden Growth Centre

Precincts Development Control Plan 2014.

State Environmental Planning Policy (Sydney Growth Areas)

The Growth Centres SEPP is an environmental planning instrument prepared under the plan making provisions in

the EP&A Act. The SEPP establishes the land use zoning and development controls for all the land within the

Growth Centres. Consent authorities, such as local councils, must apply the provisions and consider the objectives

of the Growth Centres SEPP when they make planning decisions about land within the Growth Centres.

Where a precinct has not yet been released for urban development and zoned under the Growth Centres SEPP

the local planning controls contained within the relevant Council local environmental plan (LEP) apply. The Growth

Centres SEPP also requires consent authorities to consider the intended future use of land as described by the

Structure Plans and Explanatory Notes when assessing certain development applications within the Growth

Centres to ensure development proposed to proceed in advance of precinct planning does not affect the future

delivery of the Growth Centres.

Over time, as precincts are released and precinct planning is completed, land within the Growth Centres will be

rezoned by making amendments to the SEPP. This will occur after the preparation of a Precinct Plan that is guided

by the Growth Centres Structure Plans and the Development Code.

A number of mechanisms, plans and policies apply in conjunction with the Growth Centres SEPP to facilitate

delivery of housing in Sydney’s Growth Areas.

The next section investigates the socio-demographic profile of existing residents within the Study Area and broader

SWGA.


8

2.3 SOCIO-ECONOMIC ANALYSIS

In order to understand the nature of housing demand in an area, it is useful to consider both the current and

historical socio-demographic profile of residents. This is important as it provides insight into the current profile of

residents and facilitates an understanding of how that profile might have evolved over time.

This section provides a snapshot of the socio-demographic profile of the SWGA in comparison to the broader

region within which it is located, specifically the LGAs of Liverpool, Camden and Campbelltown. Where relevant,

comparisons are made to the NWGA.

The basis of the demographic analysis is the Australian Bureau of Statistics (ABS) geographical level known as

Statistical Area Level 2 (SA2), which broadly comprises 2-3 suburbs.

The SA2s (Cobbitty - Leppington and Austral - Greendale) do not align with the boundary of the newly formed

SWGA, however more broadly representing the geographies of the former SWGC. Given that market

characteristics within the former SWGC are broadly comparable, analysis of these two SA2 statistical areas is

considered useful to provide insight into the nature of households drawn to the region over the analysis period

of 2006-2016.

In order to provide a broader set of comparisons where possible the SA2s have been compared to the Local

Government Areas (LGAs) which they straddle. Accordingly, the limitations of non-aligned boundaries of the

data and analysis areas are acknowledged.

For the purposes of referencing the SA2 statistical areas analysed, “former SGWC” is used.

Figure 2.3: SWGA Analysis Area

Source: ArcGIS, AEC

Mulgoa – Luddenham –Orchard Hills

Warragamba -Silverdale

The Oaks - Oakdale

Camden –Ellis Lane

Elderslie –Harrington Park

Badgerys Creek

Horsley Park –Kemps Creek

Mount Annan – CurransHill

Claymore –Eagle Vale –Raby

Ingleburn –Denham Court

West Hoxton – Middleton Grange

Blue Mountains - South


9

2.3.1 Population

Historical Population Growth

The population in the former SWGC increased from 15,252 persons in 2006 to 27,673 persons in 2016, equating

to an increase of 12,421 persons or 81.4%. This represents an average annual increase of 6.1%. This is higher

than Camden LGA (4.7%), Liverpool LGA (2.3%) and Campbelltown LGA (1.0%).

Table 2.3: Historical Population Growth, 2006-2016

Statistical Analysis Areas 2006 2011 2016 Change (2006-2016)

No. % Avg. Annual

Former SWGC 15,252 15,924 27,673 12,421 81.4% 6.1%

Camden LGA 50,628 58,439 80,476 29,848 59.0% 4.7%

Campbelltown LGA 146,538 151,173 161,409 14,871 10.1% 1.0%

Liverpool LGA 169,868 188,088 212,232 42,364 24.9% 2.3%

Source: ABS (2017a).

The average age of residents in the former SWGC is 35.4 years. The predominant age group is 30-44 years

(22.5%), followed by 0-14 years (22.0%) and 15-29 years (21.4%). These three age groups are also the

predominant age groups for Camden, Campbelltown and Liverpool LGAs, albeit the 0-14 year age cohort is the

most prevalent age group for these three regions. The dominant age group of 30-44 years represents the household

formation years and expectedly result in commensurate high concentrations in children aged 0-14 years.

Household Structure

The former SWGC contains a high proportion of family households (78.3%), followed by lone person households

(12.5%), consistent with Camden, Campbelltown and Liverpool LGAs.

Table 2.4: Household Composition, 2016

Household Type Former SWGC

Camden LGA

Campbelltown LGA

Liverpool LGA

Family households 78.3% 81.6% 75.5% 77.1%

Lone person households 12.5% 13.2% 17.5% 14.6%

Group households 1.6% 1.4% 2.2% 1.6%

Other households 7.6% 3.8% 4.8% 6.6%

Total 100.0% 100.0% 100.0% 100.0%

Source: ABS (2017b).

In 2016, the majority of residents in the former SWGC owned their home with a mortgage (41.7%), followed by

those who own their home outright (30.7%) and those who rent (26.4%).

Between 2006 and 2016, the proportion of those who own their home outright declined from 46.3% to 30.7%, with

the vast majority of that decline occurring between 2011 and 2016. The proportion of those owning their home with

a mortgage increased from 29.1% to 41.7% between 2006 and 2016.

Table 2.5: Household Ownership, 2006-2016

Household Ownership 2006 2011 2016

Owned outright 46.3% 45.6% 30.7%

Owned with a mortgage 29.1% 27.6% 41.7%

Rented 23.8% 25.8% 26.4%

Other tenure type 0.8% 1.0% 1.2%

Total 100.0% 100.0% 100.0%


Table 2.6 indicates the proportion of household income utilised for mortgage repayments or rent across the former

SWGC. The area has similar proportions of income going toward mortgage repayments to Liverpool LGA at

approximately 28%. This is slightly higher than the other comparison regions.


10

Table 2.6: Housing Income and Housing Costs, 2016

Household Type Former SWGC Camden LGA Campbelltown LGA Liverpool LGA

Average Weekly Household Income $2,154 $2,210 $1,718 $1,840

Average Weekly Mortgage Repayment $597 $549 $458 $513

Average Weekly Rent $455 $444 $332 $363

% of household income spent on mortgage 27.7% 24.8% 26.6% 27.9%

% of household income spent on rent 21.1% 20.1% 19.3% 19.7%

Source: ABS (2017c).

For contextual purposes, Table 2.7 compares the former SWGC household incomes and housing costs against

those of NWGA and Greater Sydney. Mortgage costs as a proportion of household incomes in former SWGC are

marginally higher than those in NWGA and Greater Sydney. Notably, household incomes in NWGA are at higher

levels, resulting in greater tolerance to housing costs.

Table 2.7. Household Income and Housing Costs, 2016

Household Type Former SWGC NWGA Greater Sydney

Average Weekly Household Income $2,154 $2,498 $2,119

Average Weekly Mortgage Repayment $597 $626 $559

Average Weekly Rent $455 $510 $463

% of household income spent on mortgage 27.7% 25.0% 26.4%

% of household income spent on rent 21.1% 20.4% 21.9%

Source: ABS (2017c).

2.3.2 Dwellings

Historical Dwelling Growth

The number of occupied dwellings in the former SWGC increased from 4,822 in 2006 to 8,705 in 2016, equating

to an increase of 3,883 dwellings or 80.5%. This represents an average annual increase of 6.1%.

Table 2.8: Historical Population Growth, 2006-2016

Former SWGC 2006 2011 2016 Change (2006-2016)

No. % Average Annual

Separate house 4,654 4,726 8,508 3,854 82.8% 6.2%

Semi-detached, row or terrace house, townhouse 59 42 118 59 100.0% 7.2%

Flat, unit or apartment 13 26 22 9 69.2% 5.4%

Other dwelling 96 127 57 -39 40.6% -5.1%

Total 4,822 4,921 8,705 3,883 80.5% 6.1%

Source: ABS (2017a).

Dwelling Structure

The majority of occupied dwellings in the former SWGC in 2016 were separate houses (97.7%) with small

proportions of semi-detached houses (1.4%) and apartments (0.3%). The proportion of separate houses has grown

marginally since 2006.

Table 2.9: Dwelling Structure, 2006-2016

Dwellings Structure 2006 2011 2016

Separate house 96.5% 96.0% 97.7%

Semi-detached, row or terrace house, townhouse 1.2% 0.9% 1.4%

Flat, unit or apartment 0.3% 0.5% 0.3%

Other dwelling 2.0% 2.6% 0.6%

Total 100.0% 100.0% 100.0%



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For contextual purposes, Table 2.10 compares the dwelling structure of former SWGC against that of NWGA and

Greater Sydney. The former SWGC has a higher proportion of separate houses (97.7%) to that of NWGA (84.8%)

and substantially higher than that of Greater Sydney (55.9%).

Table 2.10: Dwelling Structure, 2016

Dwellings Structure Former SWGC NWGA Greater Sydney

Separate house 97.7% 84.8% 55.9%

Semi-detached, row or terrace house, townhouse 1.4% 11.3% 14.1%

Flat, unit or apartment 0.3% 1.0% 29.3%

Other dwelling 0.6% 2.9% 0.7%

Total 100.0% 100.0% 100.0%


New residential building approvals data in the table below suggests the number of separate houses as a proportion

of total new dwellings in the South West region as well as the former SWGC is declining in favour of medium and

higher density formats.

Table 2.11: Building Approvals, 2011-2017

Former SWGC and SA4s

Detached Houses

Semi-detached, Row/terrace Houses, Townhouses

Flats, Units, Attached dwellings

Total

No. % No. % No. % No. %

2011-12

Former SWGC 371 98.4% 6 1.6% 0 0.0% 377 100.0%

South West 1,387 74.1% 87 4.6% 398 21.3% 1,872 100.0%

Outer South West 1,047 79.1% 244 18.4% 33 2.5% 1,324 100.0%

2012-13

Former SWGC 657 81.0% 154 19.0% 0 0.0% 811 100.0%

South West 2,131 85.7% 260 10.5% 95 3.8% 2,486 100.0%

Outer South West 1,189 67.7% 428 24.4% 138 7.9% 1,755 100.0%

2013-14

Former SWGC 736 92.9% 11 1.4% 45 5.7% 792 100.0%

South West 2,572 65.9% 219 5.6% 1,113 28.5% 3,904 100.0%

Outer South West 1,647 79.2% 132 6.3% 301 14.5% 2,080 100.0%

2014-15

Former SWGC 1,320 98.1% 26 1.9% 0 0.0% 1,346 100.0%

South West 3,336 75.1% 255 5.7% 852 19.2% 4,443 100.0%

Outer South West 2,021 74.1% 273 10.0% 434 15.9% 2,728 100.0%

2015-16

Former SWGC 1,598 93.2% 117 6.8% 0 0.0% 1,715 100.0%

South West 3,935 73.9% 528 9.9% 859 16.1% 5,322 100.0%

Outer South West 2,334 78.3% 411 13.8% 235 7.9% 2,980 100.0%

2016-17

Former SWGC 1,760 84.1% 162 7.7% 170 8.1% 2,092 100.0%

South West 3,950 55.1% 936 13.1% 2,277 31.8% 7,163 100.0%

Outer South West 2,242 80.3% 414 14.8% 135 4.8% 2,791 100.0%

2017-18 (up to July)

Former SWGC 218 79.9% 55 20.1% 0 0.0% 273 100.0%

South West 338 45.2% 113 15.1% 296 39.6% 747 100.0%

Outer South West 228 83.5% 41 15.0% 4 1.5% 273 100.0%

Source: ABS (2017d).

While not all residential buildings approved will eventuate into construction and delivery of new housing, the above

market activity by dwelling type is indicative of the market sentiment and composition of new housing supply.


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Household Occupancy

Household occupancy rates are observed to have been steadily rising in the Camden LGA to approximately 3.13

persons per dwelling in 2016, from 3.08 persons per dwelling in 2011 and 3.06 residents per dwelling in 2006.

Table 2.12 analyses household occupancy rates observed in the Camden LGA over the 2006-2016 period

compared against the neighbouring LGAs.

Table 2.12: Household Occupancy, 2006-2016

Statistical Analysis Areas 2006 2011 2016

Camden LGA 3.06 3.08 3.13

Campbelltown LGA 2.99 2.97 2.99

Liverpool LGA 3.15 3.19 3.25

Wollondilly LGA 3.01 3.01 3.07

Source: ABS (2017a,b)

As observed from Table 2.12, household occupancy rates across the LGAs have broadly increased over the 2006-

2016 period, the rate of increase observed to be the least marked in Campbelltown LGA.

Housing Affordability Threshold

Analysis of recently released income profile data (ABS, 2016) was undertaken to determine tolerance for house

prices within the SWGA. A housing affordability threshold assessment is undertaken by assessing the household

income distribution of residents within the SWGA against loan and rental costs. This is then compared against

common housing affordability metrics (% of household income spent on housing).

It is worth noting that between 2011 and 2016 average annual household income in the South West region grew

by between 3.5% and 7% per annum. This suggests many new and more affluent households moved into the

region over the period.

Analysis of recently released income profile data (ABS, 2016) was undertaken to determine tolerance for house

prices within the former SWGC. A housing affordability threshold assessment was undertaken by assessing the

household income distribution of residents within the former SWGC against loan and rental costs. This is then

compared against common housing affordability metrics (% of household income spent on housing).


13

Table 2.13: Former SWGC Housing Affordability Threshold

Source: ABS (2017c), AEC

The above analysis is useful in several respects. ABS data indicates that the current average annual household income within the former SWGC is $112,000. Accordingly,

between 30% and 44% of the resident population falls within 10%-15% on either side of average household income. Table 2.13 (red text) indicates the income band within which

the average household income falls. Resident households that fall within these bands (based on mortgage repayment assumptions) can theoretically afford housing priced

between $540,000 and $675,000.

Market investigations indicate a popularity for product priced below $700,000-$750,000. The affordability threshold analysis indicates fewer than 30% of current residents can

afford this level of pricing, conceivably either settling for a product of smaller format or renting. Similar analysis of the Liverpool and Campbelltown suggests residents within

these LGAs have even less capacity to pay for housing given their respectively lower median household incomes.

As household incomes increase, their capacity to pay for housing also rises (as a proportion of their income) before falling into mortgage stress. The 30% commonly adopted

threshold for mortgage stress is typically applied to lower income households.

Household Income

% of Households who can afford

Household Income

(Weekly)

Rental Weekly Rental

Ownership Monthly Loan Deposit Home Affordability

$20,750 94% $399 25% $100 30% $519 $73,396 $7,340 $80,736

$33,750 87% $649 24% $156 35% $984 $139,276 $13,928 $153,204

$41,550 81% $799 30% $240 35% $1,212 $171,464 $17,146 $188,611

$51,950 75% $999 30% $300 37% $1,602 $226,632 $22,663 $249,296

$64,950 66% $1,249 30% $375 38% $2,057 $291,003 $29,100 $320,104

$77,950 58% $1,499 30% $450 40% $2,598 $367,630 $36,763 $404,393

$103,950 44% $1,999 30% $600 40% $3,465 $490,252 $49,025 $539,277

$129,950 30% $2,499 30% $750 40% $4,332 $612,874 $61,287 $674,162

$155,950 19% $2,999 30% $900 40% $5,198 $735,496 $73,550 $809,046

$181,950 12% $3,499 40% $1,400 40% $6,065 $858,118 $85,812 $943,930

$207,950 7.8% $3,999 40% $1,600 40% $6,932 $980,740 $98,074 $1,078,814

$208,000 5.5% $4,000 40% $1,600 40% $6,933 $980,976 $98,098 $1,079,073


14

Key findings of the socio-demographic analysis in the former SWGC include:

• The average annual population growth rate between 2006 and 2016 of 6.1% was higher than the Camden,

Campbelltown and Liverpool LGAs.

• An average age of 35.4 years, with the major age cohorts being 30-44 years (22.5%), 0-14 years (22%) and

15-29 years (21.4%).

• Household types are dominated by families (78.3%), similar to that of Liverpool LGA (77.1%). Lone person

households are less dominant, circa 12.5%.

• Between 2006 and 2016, the proportion of those who own their home outright declined from 46.3% to 30.7%,

with most of that decline occurring between 2011 and 2016.

• Nearly 28% of average household incomes was spent on mortgage repayments, similar to that of Liverpool

LGA but higher than the other comparison regions. Rent is more affordable with approximately 21% of

average household incomes spent on rent.

• Separate houses dominate, higher than the comparison LGAs and much higher than NWGA and Greater

Sydney. However, this will change as separate houses as a proportion of total new residential building

approvals has declined in recent years.

• The housing affordability threshold for existing residents is circa $540,000-$675,000 premised on average

annual household income.

Notwithstanding current dwelling structure, it is expected that over time there will be an inevitable shift towards

more dense forms of housing particularly given the already high proportions of household income spent on

mortgage costs and the difficulty for resident households to purchase based on current income levels.

The following section investigates the infrastructure pipeline observed within the SWGA and surrounding areas.

2.4 INFRASTRUCTURE PROGRAMME

The Study Area and broader SWGA are set to greatly benefit from a number of transport infrastructure projects at

various stages of planning and delivery. Focused on and around the Western Sydney Airport, a series of rail and

road projects if delivered will greatly improve accessibility of the Study Area and wider region.

The Western Sydney City Deal was signed between the Commonwealth Government, NSW State Government

and eight local governments of Western Sydney in March 2018.

The City Deal is a 20-year agreement to deliver on transformation of Sydney’s outer west. It delivers on a

commitment made through a Memorandum of Understanding between the Commonwealth and NSW State

Government in October 2016.

The City Deal leverages the Commonwealth Government’s $5.3 billion investment in Western Sydney Airport to

catalyse investment, development and employment opportunities.

The significant volume of infrastructure investment being planned and delivered within Western Sydney underpins

a concerted whole-of-government approach to developing the Western City as envisaged in the District Plan.

Key pieces of infrastructure investment which will influence the role of the Study Area and SWGA are discussed.

Western Sydney Airport

The Western Sydney Airport will influence the shift of economic and employment activity towards western Sydney.

Located at Badgerys Creek approximately 8km north of the Site, the WSA is expected to be operational by 2026

and service approximately 5 million passengers, rising to 10 million passengers in 2031 (DIRD, 2016). Long-term

projections suggest the WSA is expected to accommodate approximately 82 million passengers per annum by

2063.


15

The Western Sydney Airport will provide obvious access benefits for residents within Western Sydney and convey

major economic and employment opportunities upon commencement of operations. Employment projections

indicate the WSA will accommodate circa 28,000 direct and indirect jobs by the early 2030’s (DIRD, 2016).

The project is being funded off-budget via the newly established government-controlled Western Sydney Airport

Corporation with expenditure to be regained via a potential sale of the Western Sydney Airport Corporation to the

private sector.

South West Rail Extension

The South West Rail Extension was one of six options considered in the joint Commonwealth and NSW

Government Western Sydney Rail Needs Scoping Study which is investigating potential routes to support the

Western Sydney Airport.

The Extension would spur west from the existing South West Rail Link terminus in Leppington to Bringelly from

which the Extension would travel north to the T1 Western Line at St Marys and south to the T2 South Line at

Narellan. New stations would include Rossmore, Bringelly, North Bringelly, Oran Park and the Western Sydney

Airport at Badgerys Creek. Additional stations along the proposed route, including Marylands, are also being

considered.

Figure 2.4: Proposed South West Rail Extension

Source: TfNSW (2016)

Whilst yet formally confirmed or funded, the South West Rail Extension is understood to be the preferred rail option

identified in the Scoping Study given recent announcements made by TfNSW. The likely timeframe for delivery of

the Extension would be circa 2036. For the purposes of this Study, instructions from DPE are to assume delivery

of the South West Rail Extension, including a Marylands train station, will be operational by 2036.


16

Western Sydney Infrastructure Plan

The key strategic document guiding the planning and delivery of road infrastructure within Western Sydney is the

Western Sydney Infrastructure Plan (RMS, 2016), a joint Commonwealth and NSW Government strategic 10-year

project planned to deliver circa $3.6 billion road infrastructure investment. The key objective of the Plan is to support

and capitalise on the benefits of WSA, with an upshot being the drastically improved accessibility for precincts

within the SWGA, including the Study Area.

The Plan comprises funding for a mix of major and local road upgrades. Significant projects currently funded under

the Plan with direct implications for the Study Area include:

• Bringelly Road Upgrade ($509 million)

A 10km upgrade of Bringelly Road is being delivered across two stages between Camden Valley Way at

Leppington and The Northern Road at Bringelly. Part of the upgrade will involve increasing Bringelly Road from

two lanes to a six lane divided road through the future Leppington Town Centre with the remainder increasing

to a four lane divided road with capacity for two additional lanes in the future. Both stages of the upgrade are

currently under construction with Stage 1 scheduled for completion in late 2017 with Stage 2 due for completion

in 2020.

• The Northern Road Upgrade ($1.6 billion)

The 35km upgrade of The Northern Road from The Old Northern Road (Narellan) to Jamison Road (South

Penrith) is delivered in six stages. Stage 1 (Old Northern Road, Narellan to Peter Brock Drive, Oran Park)

involves the construction of 3.3km new road, currently under construction and due for completion in 2018.

Stage 2 will comprise circa 11km of upgrade roadway featuring six lanes and six intersections, including a

major interchange at The Northern Road and Bringelly Road. Stage 2 construction is expected to commence

in late 2017 with completion scheduled for 2020. The Site has a direct frontage to this section of the upgrade

and will benefit significantly from the increased north-south access.

The remaining stages are currently in planning stages with completions also scheduled for 2020.

• M12 Motorway ($1.25 billion)

The 14km M12 motorway is proposed to connect the M7 Motorway near Cecil Hills to The Northern Road at

Luddenham, providing direct access from the Sydney motorway network to the Western Sydney Airport. The

roadway is to be motorway grade with four lanes, potentially expanded to six lanes in the future. The project is

expected to commence in 2020 with completion scheduled for 2024.

A map of works for the Western Sydney Infrastructure Plan is annexed as Appendix A.

Outer Sydney Orbital

The Outer Sydney Orbital would comprise a 70km major motorway linking the Hills LGA in the north (Windsor

Road) to the Camden LGA in the south (Hume Highway) with an associated freight rail line being considered to

run parallel to the proposed motorway. The project is set to dramatically improve freight connectivity between

metropolitan Sydney and regional NSW. Funding for early planning has been provided with technical studies

currently being tabled; should the project receive Government endorsement completion would be post 2036.

The proposed corridor route for the Outer Sydney Orbital is significant given it falls adjacent the western boundary

of the Study Area and thus would provide further access options for future residents.

The next section discusses the implications for planning policies, demographic findings and infrastructure

programme for future housing demand in the Study Area.

2.5 IMPLICATIONS FOR HOUSING DEMAND

Lower than expected actual dwellings growth compared to projected growth over the 2011-2016 period resulted in

a foregone opportunity to meet housing demand. This resulted in an unmet housing need, characterised by rising

rents and prices and rising household sizes across parts of Sydney.

Strategic planning, sociodemographic characteristics and infrastructure investment jointly influence the demand for

housing within the Study Area.


17

Key factors that will influence demand for land and housing within the Study include:

• Location within the established South West Growth Area which has gathered momentum and status as a

residential area since initial release in 2005.

• Concerted, whole-of-government agenda to establish the region as a major residential and employment

generating area servicing the Western City focused around Western Sydney Airport.

• Significant volume of infrastructure investment (being delivered and in the pipeline) including the Western

Sydney Airport, South West Rail Extension and number of major and local roadway projects which will allow

for the mass movement of people at the international, interstate and local level.

• Household occupancy rates which have shown an upward trend, particularly in LGAs where new subdivisions

in greenfield/release areas are prevalent.

• Nearly 28% of average household incomes were spent on mortgage repayments, similar to that of Liverpool

LGA but higher than the other comparison regions. Rent is more affordable with approximately 21% of average

household incomes spent on rent.

• Separate houses comprise nearly all of the housing, higher than the comparison LGAs and much higher than

NWGA and Greater Sydney. However, this will likely change as separate houses as a proportion of total new

residential building approvals has declined in recent years in favour of higher densities and smaller format

product.

• The housing affordability threshold for existing residents within the former SWGC is circa $540,000 and

$675,000 premised on average annual household income. There is little remaining capacity to tolerate much

greater price levels.

These key implications suggest that the Study Area will play an important role to accommodate housing demand,

albeit the outlook for continued price growth across the wider SWGA is fragile given current income levels.


18

3. ECONOMIC AND MARKET CONTEXT

This chapter investigates current market dynamics influencing the supply and demand of residential property within

the SWGA and surrounds.

3.1 ECONOMIC TRENDS AND DRIVERS

A softening of economic conditions in metropolitan Sydney’s residential market is widely commented upon amid

strong supply completions in certain markets. Despite tightening lending restrictions and low wage growth, the

long-term outlook for the Sydney residential market is good, underpinned by strong fundamentals including:

• Strong projected population growth.

• Historically low interest rates.

• Relatively low unemployment rates.

• Historic undersupply resulting in significant housing shortfall and pent up demand.

These core fundamentals ultimately form the core drivers to demand. It is an undisputed fact that dwelling

completions over the last decade have fallen well below the number needed to meet underlying demand. This

resulted in rapid house and rental price growth since 2013-14 with recent supply yet to have a substantial impact

on price growth in many markets. Recent census data indicates population growth over the 2011-2016 period

exceeded expectations however dwellings growth fell short of previous projections.

Housing affordability within metropolitan Sydney is a focal point of public commentary and recent Federal and State

government policy. The transition to high-rise living has been inevitable as a result of rising house prices, lifestyle

preferences for low maintenance property with high amenity and a shrinking average family size. That said, in

areas of western Sydney where there is availability of existing houses at comparable pricing ($600,000-$800,000),

market acceptance of high-density product has been slower as detached houses compete with new apartment

product.

With affordability becoming a key consideration for many younger households, the shift towards smaller dwellings

and lot sizes in many greenfield precincts such as the NWGA and SWGA has gained momentum over the past 12-

24 months. Developers have responded in-kind within the SWGA; numerous residential subdivisions progressed

over the course of 2017 have comprised high proportions of lots sized from 225sqm to 300sqm.

South West Growth Area

Affordability and level of surrounding infrastructure drives market preference and compromise in the SWGA.

Anecdotal evidence from local agents notes <300sqm lots and/or house and land packages are particularly

appealing to first home buyers (FHBs) given their more ‘manageable’ price points (sub-$700,000 in most cases).

This has also transcended into appeal for medium-density style product, where strong interest for land and H&L

packages on lots circa 200sqm has generated strong responses from the market. For example, the recent release

of townhouse product at Arcadian Hills (Cobbitty) in mid-2017 was met with swift take-up rates from the FHB

contingent.

Whilst smaller lots are continuing to receive swift take-up rates, the most popular lot sizes remain at 350sqm-

400sqm. Two door garages are particularly popular, owing to the lack of alternative public transport options in many

estates throughout the SWGA and two-car lifestyle of purchasers. Many marketing agents have noted that some

buyers have opted for a 3 bed, 2 bath, 2 door garage product over a 4 bed, 2 bath, 1 door garage product. The

importance of car spaces remains strong in precincts despite where public transport options exist (Edmondson

Park). Car spaces are of even more importance in areas where no transport alternatives exist (e.g. Cobbitty).

Owner occupiers are understood to be the dominant purchaser cohort in the SWGA accounting for circa 60%-65%

of all buyers. Of these FHBs and young families are particularly dominant, many relocating from the major centres

of South-West Sydney such as Campbelltown and Liverpool whilst others are relocating from Western Sydney

(Penrith LGA). A strong investor market is also active within the SWGA with strong interest observed from Sydney-

based investors.


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3.2 MARKET ACTIVITY

This section contains a summary of general market activity observed across the SWGA based upon informal

discussions with local marketing agents and development managers in addition to reference to industry databases.

Buyer profile, pricing and market preferences provide insight into the likely market demand for residential product

within the Study Area.

3.2.1 Lots/House and Land Packages

Price growth across the major land estates within the SWGA has tempered over the course of 2017 with the major

estates recording growth of circa 1% with the exception of New Breeze at Bardia and Willowdale at Leppington

which have observed strong upward movements (circa 12%-18%). However, local sales and marketing agents

have noted a distinct uptick in buying activity following the commencement of stamp duty concessions for FHBs in

July 2017; many estates are understood to now be considering price increases of circa 5% in Q1 2018 to align with

new stage releases.

Lot prices vary and range from $350,000 up to >$700,000 depending on land size, location and quality of the

respective estate. House and land package pricing is subject to similar variables, ranging from $650,000 to

$1,100,000, the latter being observed in more established markets such as Edmondson Park. Completed

townhouse product, owing to their affordability, has also become readily accepted by the market. Strong take-up

rates have been observed for such product at Oran Park Town and Arcadian Hills with completed townhouses on

sub-220sqm lots achieving $600,000-$700,000.

Anecdotal evidence from local agents indicates that whilst owner occupier buyers are predominantly Australian

born, many estates are observed to be attracting strong interest from first and second generation migrants often of

Indian or Sub-Saharan descent. Proximity to places of worship can have direct implications on the appeal of estates

to such buyers; for example over 85% of purchasers at the New Breeze estate at Bardia are understood to be of

Sub-Saharan descent with the location of several Hindu and Sikh temples within a 10km-15km radius a major

driver.

Local agents note that the established markets such as Edmondson Park, Austral and Leppington tend to generate

stronger levels of enquiries from buyers following the completion of the South West Rail Link. Development within

these markets is observed to be focusing on the provision of smaller lot sizes and typologies as developers leverage

their proximity to rail infrastructure. H&L packages have increasingly exceeded the buying capacity of many FHBs

in the major estates with upgraders and investors more attracted to such product. For example, 450sqm lot H&L

packages at Willowdale Estate comprising 4-5 bedrooms are now priced circa $800,000-$900,000.

Observations in the following estates are indicative of market activity and trends currently observed within the

SWGA and surrounds.

• Arcadian Hills, Cobbitty

The Arcadian Hills estate comprises 180 lots across circa 65ha approximately 2km west of the Oran Park town

centre and is located adjacent the southern border of the Study Area. Lots range from 300sqm to 665sqm with

both vacant blocks and H&L packages available. Overwhelming majority of buyers are owner occupiers who

already reside within South West Sydney; many being young families relocating from Liverpool, Campbelltown

and surrounding suburbs. An upswing in demand from FHBs has been observed since Q3 2017 as a result of

the stamp duty changes for this buyer cohort.

Affordability is the primary driver at the estate given the dominance of the FHB cohort; H&L packages below

$700,000 are the most demanded product typology with smaller vacant blocks (300sqm-350sqm) priced circa

$400,000-$450,000 also popular as total land and building costs can be kept to circa $700,000-$750,000. A

total of 12 townhouses have been released to date (185sqm-250sqm internal) on small lots 200sqm-225sqm;

these were quickly absorbed by the market given their affordability.

• Oran Park Town, Oran Park

The Oran Park Town is the primary estate within Oran Park with approximately 8,000 dwellings targeted for

delivery. Jointly developed by both Landcom and Greenfields Development Company, the estate has sold

approximately 4,000 lots to date with keen interest observed over the course of 2017.


20

Good demand is observed from investors and owner occupiers alike; both buyer cohorts accounting for

approximately half of sales to date. Vacant blocks between 375sqm and 400sqm have been most popular to

date amongst owner occupiers given their manageable price points ($400,000-$415,000) and good site

capacity for construction of relatively large dwellings (4 bedroom, 2 door garage). Investors are targeting larger

lots (>450sqm) with potential for further subdivision or dual occupancies. This has further pressured many

FHBs into opting for more affordable, smaller lots.

A strong response to medium-density townhouse product has been received in recent releases over the course

of 2017; provision of a larger release of townhouse-style lots sized between 250sqm and 300sqm is expected

over the coming 6-12 months.

• Station Rise, Edmondson Park

Located circa 500m north of the Edmonson Park train station, the Station Rise estate was recently released in

early 2017 and comprises approximately 50 lots being delivered as both vacant blocks and H&L packages.

This scale of estate is typical in the current Edmondson Park market where large numbers of smaller

developers dominate the development pipeline. The estate is approximately 80% sold to date with local agents

noting a spike in interest over the past 3-6 months.

Lots range from 350sqm to 550sqm and similar to broader market activity FHBs dominate the 350sqm-400sqm

bracket due to lower price points. To date, the buyer profile has been slightly slanted to investors, comprising

circa 60% of all purchases thus far. Larger H&L packages (475sqm-550sqm) often comprise an additional

granny flat to the rear; these packages are securing sale prices circa $1m to $1.1m. The investor cohort has

had a large amount of interest from Chinese international investors to date, with the local selling agent

indicating this has allowed for strong price increases over the course of the year.

Owner occupiers are a strong mix of both FHBs and upgraders, the vast majority of these relocating from

nearby centres of Liverpool and Campbelltown. Upgraders from these areas are seeking new, better quality

accommodation with many relocating from older townhouses or apartments.

• Parklands, Austral

The Parklands estate within Austral is approximately 1km west of the M7 Motorway in the northern section of

Austral. The estate comprises a total 45 lots ranging from 270sqm to 550sqm with just over 50% of all lots

sized below 350sqm.

Given their small size, the estate has attracted strong demand from the FHB cohort opting for lots below

350sqm as prices for such stock are circa $380,000-$420,000. The local agents note that many buyers are

limited to circa $700,000 total land and build cost, with strong competition in Stage 1 of release seeing smaller

lots quickly absorbed prior to lots >400sqm.

The estate is approximately 70% sold to date with the local agent noting swift take-up rates since

commencement of the FHB stamp duty discount in July 2017. Similar to many other estates nearby, owner

occupier buyers are predominantly relocating from existing centres within western Sydney, including Fairfield,

Liverpool and Campbelltown.

3.2.2 Apartments

Edmondson Park and Leppington are the only sub-markets within the former SWGC which have progressed

marketing for apartment products with three projects observed to date - 240 Croatia Avenue, Edmondson Park

(105 apartments, 4 storeys), 5 Rynan Avenue, Edmondson Park (110 apartments, 4 storeys) and 202 Byron Road,

Leppington (534 apartments, 9 storeys across five buildings).

Informal discussions with marketing agents indicate take-up rates have been swift with the initial release of 240

Croatia Avenue (27 apartments) selling out over a three-month period following release in February 2017 (average

of 9 sales per month), with the second stage due to be released in Q4 2017. The site is well-located within 700m

of the Edmondson Park train station.

A slower response was received to 5 Rynan Avenue with the second stage of 25 apartments released in mid-2016

and selling out in December 2016, equating to 3-4 sales per month. This is understood to be largely a result of the

sites distance from Edmondson train station, which is some 2km to the south.


21

202 Byron Road in Leppington is currently seeking expressions of interests prior to the initial release in Q4 2017.

Located approximately 600m east of Leppington train station, the mixed-use development is currently under review

by Camden Council. Indicative pricing for two bedroom units is circa $600,000-$650,000, which is in line with the

sales achieved for similar product at 240 Croatia Ave, Edmondson Park.

Local agents note that given the immaturity of the high-density market within the SWGA, the value proposition

afforded to apartment product must be strong enough to attract buyers who would otherwise choose new low-

density housing or medium-density housing. For example, strong market resistance to 3 bedroom units is noted

at 5 Rynan Avenue given their price points largely comparable to housing on small lots (300sqm) or medium-

density townhouses which are typically sub-$700,000.

Unit sizes observed at three apartment developments currently being offered are slightly larger than units within

more established high-density markets as developers compete with similarly priced low and medium density

product.

Residential unit mix is highly focused on two bedroom product with a review of the residential pipeline indicating

most developments have at least 50% as two bedroom units. One bedroom apartments are also well represented;

ranging from 20% to 40% of the unit mix. Three bedroom apartments are not heavily featured in current apartment

developments owing to their respective price points which approach house and land packages.

Table 3.1 analyses the unit mix of the higher density development pipeline observed in Edmondson Park and

Leppington.

Table 3.1: Residential Unit Mix

Address Units Unit Mix

Studio 1 bed 2 bed 3 bed

No. % No. % No. % No. %

Edmondson Park

5 & 15 Rynan Av 110 0 0% 24 22% 69 63% 17 15%

245 Croatia Av 105 11 10% 11 10% 72 69% 11 10%

190 Croatia Ave 94 0 0% 19 20% 70 74% 5 5%

Leppington

120 Ingleburn Rd 672 0 0% 263 39% 358 53% 51 8%

202 Byron Rd 534 0 0% 60 11% 448 84% 26 5%

107 Ingleburn Rd 397 0 0% 90 23% 191 48% 116 29%

76 Rickard Rd 250 0 0% 26 10% 207 83% 17 7%

Source: Cordell Connect

The next section analyses current development activity observed within the SWGA and surrounds.

3.2.3 Development Pipeline

A flurry of development activity is currently observed within the SWGA and nearby areas with large volumes of

development observed within the pipeline at various stages of delivery.

Leppington and Leppington East (Denham Court), Oran Park, and Gregory Hills (Turner Road) are the dominant

precincts within the new boundaries of the SWGA. Precincts such as Austal and Edmondson Park within the former

SWGC also exhibit significant levels of development proposals, as does Spring Farm and Gledswood Hills. The

GMGA land release areas are also poised to deliver vast numbers of new dwellings, albeit being at earlier stages

of planning and delivery.

Table 3.2 identifies approximately 13,000 dwellings are currently proposed within the SWGA pipeline either in the

planning or delivery stage. Whilst not all of these will eventuate into construction and delivery of dwellings it does

provide a good indication of current market sentiment.

A comprehensive list of the development pipeline is annexed to this Study as Appendix B.


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Table 3.2: Development Activity, SWGA and surrounds

Precinct Dwellings/ Lots

Development Typology

Lots/Houses Townhouses/Villas Apartments

SWGA

Cobbitty 507 100% 0% 0%

Catherine Field* 160 100% 0% 0%

Gregory Hills 1,814 100% 0% 0%

Leppington/Leppington East (Denham Court) 8,081 61% 0% 39%

Lowes Creek* - - - -

Marylands* - - - -

Oran Park 2,344 98% 0% 2%

Total 12,906

Nearby Precincts/Suburbs

Austral 1,858 89% 0% 11%

Bringelly* - - - -

Edmondson Park 2,684 86% 1% 13%

Gledswood Hills 1,617 98% 2% 0%

Kemps Creek* - - - -

Rossmore* - - - -

Camden 447 54% 2% 44%

Elderslie 430 100% 0% 0%

Mount Annan 168 16% 84% 0%

Narellan 564 12% 27% 61%

Spring Farm 2,459 100% 0% 0%

Total 10,227

GMGA (Land Release Areas)

Menangle Park 3,400 100% 0% 0%

Mt Gilead 1,655 100% 0% 0%

Wilton 16,500 100% 0% 0%

Total 21,555

*Does not include potential pipeline as per early planningSource: Cordell Connect

As observed from Table 3.2, low-density product accounts for the vast majority of all new development proposed

within the respective markets. Higher density apartment development is only observed in Leppington and

Edmondson Park, with almost 40% of all new dwellings proposed in Leppington apartment product. This is

particularly telling of the future nature of the Leppington precinct given its role as a major centre within the SWGA.

The volume of ongoing development activity as well as development which is proposed in the pipeline indicate a

dominance of activity in precincts where landholdings are controlled by a number of key developers and where

smaller developers have been able to assemble sites. These include the precincts Leppington/Leppington East,

Oran Park, Edmondson Park and Gregory Hills (Turner Road).

Nearby greenfield and established centres are also poised to deliver significant volumes of new dwellings,

particularly in Austral, Edmondson Park, Gledswood Hills and Spring Farm. Further south, the greenfield precincts

within the GMGA are also poised to contribute strong numbers of new dwellings, albeit delivery likely to occur over

the longer-term.

Significantly, precincts within the SWGA and surrounds not as yet released for development will further add to

the residential pipeline over time. Precincts such as Bringelly, Catherine Field, Kemps Creek, Rossmore (and

the Study Area) could contribute circa 52,000 additional dwellings by 2035.


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3.2.4 Development Site Sales

A large number of number of development site sales across the established precincts of Austral, Edmondson Park

and Leppington have been observed over the course of 2017 with a limited number of sales in nearby precincts

yet to be released for precinct planning such as Bringelly and Catherine Field.

Prices paid for development site sales within Austral and Edmondson Park have risen commensurate with end sale

values of lots and H&L packages; recent sales equating to $1.6m/ha up to $3.5m/ha depending on zoning and

location. For example, the recent sales of 185 Fourteenth Avenue, Austral (2.02ha) and 90 Croatia Avenue,

Edmondson Park (2.04ha) sold in mid-2017 for $7m and $4.4m, respectively.

Leppington is achieving slightly lower sales prices, ranging from $1.5m/ha to $3m/ha. For instance, 66 Rickard

Road (2.01ha) and 48 Dickson Road (3.08ha) sold in mid-2017 for $4.25m and $9.3m, respectively. Lower prices

are expectedly observed within precincts yet to be released for precinct planning; Catherine Field and Bringelly are

currently achieving sales prices circa $1m/ha to $1.7m/ha.

Overall, prices paid for development sites across the SWGA have been observed to have risen circa 15% to 30%

over the 2015-2017 period.

3.2.5 Summary of Findings

With sustained buyer interest observed across the SWGA, capacity of households to bear continued price growth

is a growing issue. As evidenced from the housing affordability analysis in Chapter 2, the affordability threshold

within the SWGA and Liverpool and Campbelltown LGAs (where a large component of demand is currently derived

from), is already strained with current asking prices for many land and H&L packages approaching or exceeding

households’ affordability thresholds.

Figure 3.1 depicts the trajectory of price growth over 2007-2016 in the SWGA and LGAs that the GA straddles.

Aggregated sale and rental price growth in the broader LGAs (Camden, Campbelltown and Wollondilly) has been

robust, with sale price growth particularly strong in the last five years in an environment of low interest rates.

Notably, the rate of land price growth in the South West has been double digit in recent years, though the price

data is reported on a rate per square metre and is likely due to an increasingly prevalence of smaller format housing.

Figure 3.1: Aggregate Price Growth, Broader LGAs and SWGA

Source: HNSW (2017a), HNSW (2017b), UDIA (2017)

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Gro

wth

Rate

s (%

)

Rental Price Growth (LGAs) Sale Price Growth (LGAs)

Land Price ($/sqm) Growth (SWPGA)


24

Price rises are conceivably approaching a tipping point where purchasers are evaluating location options - whether

they compromise on size and select smaller format accommodation close to established centres (e.g. Liverpool)

or if they compromise on location and purchase house and land in the South West that might be further away from

existing retail and urban amenity. The growing shift towards higher density residential product is only set to

strengthen as a result.

Market demand and interest for residential blocks and dwellings are without exception observed to be strong across

projects that have been released for sale. Informal discussions with marketing agents consistently identify that

small lots (250sqm-350sqm) are the most marketable due to affordable price points, with a growing acceptability

of townhouse type product circa 225sqm.

With circa 13,000 dwellings observed in the SWGA pipeline (primarily within Leppington), the development pipeline

appears strong. Neighbouring precincts north of Bringelly Road and further south in the GMGA are also poised to

deliver significant volumes of new dwellings over the short and long term.

3.3 IMPLICATIONS FOR HOUSING DEMAND

Market preferences and attitudes are different compared to 10 years ago when the first structure planning for the

South West Growth Centre was completed. Households today (families, couples and lone persons alike) value

lifestyle and convenience. These values pervade all elements of choice including housing choice. While a large

backyard may still be sought after by some, it is generally a reducing requirement driven by cost and attitudes

towards convenience.

The gradual shift towards smaller lot and dwelling sizes is therefore a function of both affordability issues and

lifestyle choices. That said, the former has the greatest level of impact on housing demand within the SWGA as

evidenced from market observations.

Lots

An analysis of market activity reveals a significantly price sensitive market, households generally purchase

according to their financial capacity often in compromise of spatial and size requirements. Our enquiries note the

following market observations:

• Small lots (<350sqm)

Small lots are subject to intense market competition amongst price sensitive buyers, predominantly the FHB

cohort. Pricing for small lots varies depending on location and quality of the estate, however most typically fall

within the $340,000-$400,000 range. This a crucial consideration for this market who typically seek to keep

total dwelling costs (including construction) below $700,000.

The proportion of small lots within the major estates is larger in newer subdivisions as developers seek to

respond to a shift in market preference. For example, the 166-lot subdivision “Aspect” at 221 Fifth Avenue,

Austral has 65% of lots ranging from 225sqm to 300sqm.

• Medium lots (350sqm-450sqm)

Medium sized lots comprise the majority of lots within the major land estates across the SWGA. These lots are

typically priced between $420,000 and $450,000, however several prominent estates have achieved sales

from $460,000 to $490,000. After building construction and other costs, total cost of a dwelling approaches

$800,000 or more. These lots are nevertheless still a popular product with buyers, particularly the upgrader

market who may be less price sensitive than the FHB market.

• Large lots (>500sqm)

Large sized lots are not heavily featured in the major estates across the SWGA and even less so in more

recent subdivisions. These lots typically transact for >$700,000 and are primarily sought by the investor market

seeking to further subdivide or construct dual occupancy dwellings. Whilst less marked than smaller sized lots,

demand remains steady as observed from strong take-up of larger sized lots at Oran Park Town. This trend is

further observed to the south in the GMGA, where approximately 70% of buyers at the Macarthur Heights

estate have been investors targeting lots circa 500sqm-550sqm.


25

Coinciding with strong market interest for smaller sized lots, market trends in the SWGA are underpinned by

growing popularity of medium-density product (<300sqm) and, to a degree, higher-density product (flats and

apartments).

Townhouses and Villas

Whilst developers have yet to progress significant volumes of medium-density product (townhouses, villas, semi-

detached housing) within new estates across the SWGA, many estates have been observed to be ‘testing the

waters’ with small releases of such product, e.g. Arcadian Hills, Oran Park Town. Market response to such product

has been strong, particularly given these completed product can be brought to market circa $600,000-$700,000.

Informal enquiries indicate that developers will be further increasing such products over the coming 6-12 months

with lots circa 225sqm to 300sqm.

Apartments

Multi-unit living is perceived to be associated with a low maintenance and convenience lifestyle that is accessible

to a range of amenity and entertainment options. Acknowledging that many people are drawn to multi-unit living for

these lifestyle reasons, equally important are the issues of choice and affordability.

The markets with existing train stations (Edmondson Park and Leppington) are the sole precincts observed to be

accommodating new apartment development. The development of the Leppington town centre is a major driver

behind the quantum of high-density proposed therein; with circa 40% of new dwellings proposed being units and

apartments.

Market acceptance to such product within the SWGA remains relatively untested given only three developments

have been brought to market to date. Market response to these projects has been directly related to their proximity

to train stations with sites such as 5 Rynan Avenue which is 2km from the Edmondson train station suffering from

longer marketing periods.

Market resistance is particularly observed to larger three bedroom product given their respective price points are

comparable to small lots or completed medium-density product which is more readily accepted by the market.

Despite this, as the SWGA continues to mature and amenity increases the market for higher density product will

undoubtedly expand. This will be exacerbated if land prices continue to increase while incomes growth remain soft.

Progress and volume of development activity is underpinned by the ability to assemble sites at competitive prices.

The availability of services infrastructure and development capability of land influence landowner and price

expectations.

A myriad of factors influences the supply of housing. These and the market signals observed in this section will be

further examined in the next chapter.


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4. PROJECTED DEMAND AND SUPPLY CAPACITY

Land use planning is a complex matter, long term in nature and ultimately more influenced by structural change

rather than market/cyclical factors. As a consequence, planning for immediate needs is categorically less complex

than trying to predict what those needs might be in the future. This chapter considers future expected housing

demand and the corresponding capacity of the Study Area to accommodate that demand.

4.1 INTRODUCTION

Projections of housing demand for the Study Area as a whole as well as each Growth Area were developed using

the methodology outlined in Appendix C. We highlight these are developed using DPE’s population projections

data (2016 release) as a base.

In brief, three models were used in developing these projections.

• A ‘ratio model’, which takes official projections from DPE (2016) for metropolitan Sydney and applies a shock

to the official projections that results in population and households being transferred to the GAs (greenfield

areas) from the rest of metropolitan Sydney.

• An ‘equation model’, which uses historic econometric relationships for metropolitan Sydney local government

areas between changes in dwelling stock and factors such as relative prices, distance friction (to the CBD),

changes in households, and employment patterns. These relationships are then applied to the GAs to project

dwelling demand, using results from the ratio model.

• A ‘distribution model’, which distributes GA dwelling demand projections from the equation model to each of

the Growth Areas using qualitative weighted distribution criteria regarding the anticipated ‘attractiveness’ of

each centre relative to each other. The following Growth Areas are modelled:

o The former South West Growth Centre (SWGC), which is a combination of the Western Sydney Growth

Area and South West Growth Area. These two areas were modelled in combination to be consistent with

previous modelling undertaken.

o The North West Growth Area (NWGA).

o The Greater Macarthur Growth Area (GMGA).

A previous version of the metropolitan plan for Sydney (Metropolitan Plan for Sydney 2036 released in 2010)

articulated an aspirational target split of new dwellings (i.e. 70% to be in existing suburbs and 30% in Greenfield

areas). It was further espoused that 85% of new Greenfield dwellings should be in the “Growth Centres”, or Growth

Areas as referred to in this Study. This would imply an allocation of around 25% (30% x 85%) of growth in dwellings

in Metropolitan Sydney is targeted to be in the Growth Areas. Subsequent versions and indeed the recent draft

Greater Sydney Region Plan do not contain reference to any target split of new dwellings.

The earlier Housing Market Needs Analysis for the South West Growth Area (AEC, 2015) examined two demand

scenarios, where demand in the GAs was premised on a 10% and 20% capture of new housing demand.

In light of significant government investment into the Western Sydney Airport, Badgerys Creek Aerotropolis and

anticipated rise of the Western City as well as demonstrated strong and robust demand for housing in the region,

this Study examines demand scenarios where 20% and 30% of new demand is captured by the GAs.

Scenarios Examined

Two demand scenarios were modelled within the ratio model, with the results then run through the equation model

and distribution model to project aggregate dwelling demand by each Growth Areas:

• Scenario 1: is premised on there being a 20% capture of new housing demand and consequent residential

activity of metropolitan Sydney by the GAs. This is termed a ‘Lower Growth Scenario’.

• Scenario 2: assumes a 30% capture of new housing demand and consequent residential activity of

metropolitan Sydney by the GAs. This is termed a ‘Higher Growth Scenario’.


27

A detailed summary of the results of these three scenarios for the GAs (in aggregate) is provided in Appendix C.

Table 4.1. Projections of Dwelling Demand by Scenario for the GAs in Aggregate

Scenario 2016 2021 2026 2031 2036 Change (2016 to 2036)

Scenario 1 (20%) 33,243 64,485 95,804 128,378 162,571 129,328

Scenario 2 (30%) 33,243 79,107 124,561 171,656 220,993 187,750

Source: AEC, DPE (2014), DPE (2016).

4.2 DWELLING DEMAND PROJECTIONS

4.2.1 Scenario 1 (Lower Growth Scenario)

Population

The former SWGC’s population is projected to grow from 27,673 to 190,768 residents between 2016 and 2036 in

the lower growth scenario, an increase of 163,095 people (average annual growth of 10.1%).

Table 4.2. Projections of Population by Growth Area, Scenario 1


Former SWGC 27,673 64,876 103,889 146,060 190,768 163,095

NWGA 41,195 83,050 121,249 158,836 195,132 153,937

GMGA 31,497 45,918 62,759 79,677 98,483 66,986

Source: AEC, ABS (2017a and 2017b), DPE (2014), DPE (2016).

Dwellings

Dwelling projections for the Growth Areas for the lower growth scenario (20%) are summarised in Table 4.3. The

former SWGC is projected to increase from 9,131 dwellings in 2016 to 64,803 dwellings in 2036, an increase of

55,672 dwellings over the 20 year period (average annual rate of 10.3%).

Table 4.3. Projections of Dwelling Demand by Growth Area, Scenario 1


Former SWGC 9,131 21,638 34,893 49,332 64,803 55,672

NWGA 13,465 27,135 39,309 51,530 63,637 50,172

GMGA 10,647 15,712 21,603 27,517 34,131 23,484


Household Occupancy Rates

By implication, the projections suggest the following household occupancy rates.

Table 4.4. Implied Household Occupancy Rates, Scenario 1

Growth Area 2016 2021 2026 2031 2036

Former SWGC 3.03 3.00 2.98 2.96 2.94

NWGA 3.06 3.06 3.08 3.08 3.07

GMGA 2.96 2.92 2.91 2.90 2.89


Implied household occupancy rates are ‘aggregate’ in nature, i.e. reflecting households who occupy all forms of

dwellings.


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4.2.2 Scenario 2 (Higher Growth Scenario)

Population

The former SWGC’s population is projected to grow from 27,673 to 264,057 residents between 2016 and 2036 in

the higher growth scenario, an increase of 237,057 people (average annual growth of 12.0%).

Table 4.5. Projections of Population by Growth Area, Scenario 2


Former SWGC 27,673 82,426 139,129 200,160 264,730 237,057

NWGA 41,195 102,631 157,931 212,285 264,744 223,549

GMGA 31,497 52,846 77,370 101,873 129,054 97,557

Source: AEC, ABS (2017a and 2017b), DPE (2014), DPE (2016).

Dwellings

Dwelling projections for the Growth Areas for the higher growth scenario (30%) are summarised in Table 4.6. The

former SWGC is projected to increase from 9,131 dwellings in 2016 to 89,928 dwellings in 2036, an increase of

80,797 dwellings over the 20 year period (average annual rate of 12.1%).

Table 4.6. Projections of Dwelling Demand by Growth Area, Scenario 2


Former SWGC 9,131 27,492 46,728 67,604 89,928 80,797

NWGA 13,465 33,533 51,201 68,869 86,339 72,874

GMGA 10,647 18,083 26,632 35,183 44,727 34,079



By implication, the projections suggest the following household occupancy rates.

Table 4.7. Implied Household Occupancy Rates, Scenario 2

Growth Area 2016 2021 2026 2031 2036

Former SWGC 3.03 3.00 2.98 2.96 2.94

NWGA 3.06 3.06 3.08 3.08 3.07

GMGA 2.96 2.92 2.91 2.90 2.89


Implied household occupancy rates are ‘aggregate’ in nature, i.e. reflecting households who occupy all forms of

dwellings.

4.3 MARKET DEMAND AND POTENTIAL SUPPLY CAPACITY

This section examines how market demand influences housing supply and the distribution of dwellings within the

Study Area.

Chapter 3 identified strong demand for dwellings in the broader SWGA which is considered an appropriate proxy

for likely demand in LCM and the Context Area. Affordability issues in conjunction with lifestyle reasons is seeing

a continuing trend towards owner occupier purchasers favouring smaller, denser product.

Looking forward, while smaller and denser residential product is expected to increase, detached houses are still

expected to form the majority of dwelling type, followed by row housing/semi-detached/townhouses and then by

units/apartments. The ability of higher-density product to attract demand within LCM will be largely tied to planned

infrastructure and amenity improvements within the area.


29

Planning (Target) Densities

‘Target density’ controls are generally used in neighbouring precincts within the former SWGC including

Edmondson Park (north), Austral & Leppington North, East Leppington and Catherine Fields (part) where average

densities range from 10dw/ha to 28dw/ha.

The following density targets are applied to residential zones in each precinct.

• Low density - 12.5dw/ha to 20dw/ha.

• Medium density - 20dw/ha to 40dw/ha.

• High density - 40dw/ha.

Indicative lot sizes envisaged by density provisions in the Growth Centres Development Code are classified below:

• Townhouses, semi-detached and detached small dwellings (up to 350sqm).

• Detached medium dwellings (350sqm-450sqm).

• Detached large dwellings (450sqm).

Development at higher densities than the target density controls is permitted however the maximum number of

dwellings is controlled by stipulated minimum lot sizes in each precinct. Higher density development is not

anticipated to occur unless access to transport, employment and other services are available.

Density targets for the Study Area have not yet been developed.

Market Densities

Analysis of market activity suggests that residential typologies are becoming increasingly focused on smaller lot

sizes, as market acceptance of small lot housing and denser product is growing.

Having consideration to what appears to be a structural shift in the market, Table 4.8 and Table 4.9 outline potential

market densities for the Study Area. Detached product is still expected to be the dominant typology, a function of

general market expectations.

The quantum of units that could be provided at LCM would ultimately depend on the respective capacity of retail

centre/s to accommodate multi-unit housing. Proximity to public transport and scale of retail facilities are key

determinants of the viability of higher density product.

Table 4.8: Product Typology and Mix (Lower Density and Higher Density Scenario)



Overall

Context Area (excluding LCM) 75%-80% 15%-20% 0%-5% 20%-30% 60%-70% 10%

LCM 70%-75% 20%-25% 5%-10% 30%-35% 55% 10%-15%


Context Area (excluding LCM) 80% 20% 0% 20% 70% 10%

LCM 70% 25% 5% 30% 55% 15%


Context Area (excluding LCM) 75% 20% 5% 30% 60% 10%

LCM 70% 20% 10% 35% 55% 10%

Source: AEC, DPE

The residential mixes presented in Table 4.8 are calculated to equate to average dwelling densities for LCM and

the Context Area.


30

The following average densities are assumed:

• Detached dwellings:

o 22.5 dwellings per hectare (average 300sqm block).



• Medium density dwellings: 33.8 dwellings per hectare (average 200sqm block).

• Flats/units: 67.5 dwellings per hectare (average 100sqm site area per unit).

The average densities are then applied to the respective developable areas to calculate the total dwelling potential

assuming a build-out of the areas, i.e. 100% of developable land is developed.

Table 4.9: Market Densities to Build-out



Potential Dwellings




Context Area (excluding LCM) 517.0ha 20.8 10,744 17.5 33.8 67.5

LCM 265.8ha 24.3 6,465 17.9 33.8 67.5

Total 782.8ha 22.0 17,209



LCM 265.8ha 26.4 7,009 18.4 33.8 67.5

Total 782.8ha 24.6 19,263

Source: AEC, DPE

By applying lower average densities (lower density scenario), the theoretical capacity of Context Area (excluding

LCM) is 10,744 dwellings whilst LCM could conceivably accommodate 6,465 dwellings. In total, the entire Study

Area could accommodate a potential total of 17,209 dwellings under the Lower Density Scenario.

By applying the higher average densities assumed in the Higher Density Scenario, the theoretical capacity of

Context Area increases to 12,254 dwellings whilst LCM could potentially accommodate 7,009 dwellings.

Accordingly, the entirety of the Study Area could conceivably accommodate 19,263 dwellings under the Higher

Density Scenario.

If the Context Area (and LCM) had the environmental capacity to accommodate 17,500 to 20,000 additional

dwellings to 2036, that would represent a capture of 22%-24% of projected housing demand in the High Growth

Scenario (refer to section 4.2.2).

While the Context Area (and LCM) are discrete areas with development capacity in and of themselves, their overall

development role will be influenced by development capacity elsewhere in the GA.

The next section considers the various factors which influence the supply of housing within the SWGA.

4.4 FACTORS AFFECTING HOUSING SUPPLY

There are a considerable number of factors affecting the deliverability of new/additional housing and rarely is a

single factor the only cause for low housing supply activity. It is important to understand that urban land is subject

to pressures for development which directly affect their land values and feasibility of developing into higher and

better uses.

Landowner expectations are often directly linked to planning controls, their value expectations moving upwards in

tandem with rezoning or upzoning of areas.


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Land Value and Site Assembly

In order to economically acquire and develop land a proposed use must translate into a higher value than the

existing use including any improvements on the land (or ‘As Is’ value). Development will only occur where a

proposed use is valuable enough to displace an existing use. While existing improvements may be dated and due

for replacement, they may still be providing a good level of functional utility and thereby be relatively valuable.

The acquisition of land can be a high-risk and high-resource activity for developers, particularly where numerous

parcels of land have to be amalgamated prior to development. Further exacerbating the issue of site fragmentation

is that in many Greenfield areas, while land may be appropriately zoned for urban development, an ‘agenda of

development’ may not necessarily align with that of landowners who have other objectives for their landholdings.

There is notable sales activity of development sites in Austral and Edmondson Park and prices paid are among the

highest in the former SWGC, in the order of $3m/ha-$3.5m/ha of site area. In comparison, prices paid for sites in

Leppington are slightly lower ($1.5m/ha-$3m/ha) whilst precincts in Catherine Fields have transacted for the lowest

sale prices in recent times ($1m/ha-$1.7m/ha). This is conceivably reflective of development-ready status of some

precincts over others.

Landowner expectations are often directly linked to planning controls and regardless of financial feasibility, value

expectations moving upwards with rezoning or upzoning of areas to accommodate higher densities. This is

distinctly observed in the Edmondson Park precinct where following the immediate availability of services

infrastructure, landowner expectations have swiftly adjusted.

Underlying and Effective Demand

Residential markets are diverse. Market acceptance for higher density product is good within capital cities (and

inner suburbs in those cities), hence end sale prices of the completed product justify the higher cost of construction.

In many cases effective demand (i.e. the capacity and willingness of households to pay), rather than underlying

demand, is relevant for development feasibility. The ability of households to pay for housing underpins the type

and nature of development the market can respond with.

An analysis of household income bands provides insight into the financial ability of households in SWGA to pay for

housing (cost of purchase or rent).

• Approximately 70% of households in the SWGA cannot afford a new dwelling price of $675,000 without falling

into mortgage stress1.

• At the average household income ($2,154/week), a household can only afford to purchase a dwelling circa

$540,000-$675,000.

This analysis is important as an understanding of the extent and nature of market capacity/ability to pay for new

housing is important as this underpins the viability/marketability of new housing product.

Development Costs

The cost of construction varies across residential typologies and can increase substantially for example, as

buildings become taller. Service requirements will dictate that more lifts will be required so that vertical

transportation times are not compromised.

Equally important is the issue of choice. If low density residential product in the area surrounding is available at

relatively cheap prices, underlying demand for higher density product at similar prices will arguably be limited.

In deciding the amount of capital to apply to a site, i.e. how intensely the site should be developed, developer

capital will be applied to the point where incremental revenue is equal to incremental cost. A two storey dwelling

has the potential to increase construction cost by $50,000 and will therefore only be pursued if there is market

capacity and willingness to pay.

1 It is generally accepted that housing cost (rent or mortgage cost) should not exceed 30% of a household’s gross income. This measure varies

depending on the scale of the household’s income, e.g. it could be higher for households on higher incomes


32

Funding and Availability of Infrastructure

In Greenfield locations, the availability of trunk and lead-in infrastructure can be a major impediment to development

proceeding. While there is nothing precluding a prospective developer from assuming the provision of necessary

infrastructure to facilitate development of a site, the uncertainty and heavy capital cost associated with

infrastructure provision not only contributes to a perception of increased risk, it is beyond the financial capacity of

many developers.

In precincts where large landholdings are in the control of major developers, the provision of trunk and lead-in

infrastructure is in many cases incorporated as part of development, and further to the Precinct Acceleration

Protocol (PAP) provisions. This can assist to accelerate delivery where there would otherwise have been a lag in

infrastructure provision.

In precincts where lot and ownership patterns are fragmented, the ability of developers to assemble a large

development block is limited, hence there is low likelihood of developer-led infrastructure provision, e.g. Austral.

Planning and Development Controls

Planning and development controls have the ability to affect feasibility and housing supply through changes in land

use zoning and densities but also through costs associated with design requirements and securing planning

approvals (including developer contributions). Codes for parking, open space, sustainability, etc. all have the ability

to influence the cost of development.

The implementation of the Housing Diversity package has offered some flexibility in the types of housing that are

provided in the SWGA. While there is still a compliance-based cost to ensuring built form accords with development

controls, financial feasibility is offset by swifter take-up by the market on release.

In comparison with planning densities (target densities), market demand for higher density product is strong. Even

though current planning densities are meant as ‘minimums’, i.e. more dwellings can be supported, infrastructure

services can be an impediment as agencies are understood to have planned for dwelling numbers on the basis

they are ‘target densities’ rather than minimum densities.

4.5 IMPLICATIONS FOR HOUSING SUPPLY

Residential Densities

From market intelligence gathered, many developers are understood to be increasingly seeking to develop sites

within the SWGA to a denser form than was envisaged by density controls in the Growth Centres SEPP, in some

cases to double or treble the site’s original planning capacity. Our market analysis suggests that this is due to a

combination of factors:

• Housing affordability and choice

o Affordability where many households can only afford $650,000-$700,000.

o Preference shift to low maintenance housing options.

• Development feasibility

The high cost of land and with market expectations of development sites at their current levels, development

feasibility can be delicate. The offer of a diverse and viable product not only ensures market appeal it also

helps developers achieve a commercial return in a competitive environment of high land cost.

Services Capacity and Site Amalgamation

Development activity is occurring at distinct and different paces in the former SWGC. It is no surprise that precincts

like Edmondson Park, Leppington and Oran Park where large landholdings are under control of several major

developers and with immediate services capacity, are witnessing a hive of development activity.

Development sites in the region are observed to be sold as englobo sites without development approval. The

majority of these sites have historically been used for agricultural uses and are transitioning to urban uses.


33

A major factor constraining the delivery of housing is the process of site assembly. Fragmented ownership

patterns and unrealistic vendor expectations can make the acquisition of land a high-risk and high-resource

activity for developers, particularly where numerous parcels of land have to be amalgamated prior to

development and those sites that are improved with existing buildings.

Limited availability of services infrastructure additionally influences the price of land where services are available.

As an example, owing to immediate availability of services infrastructure throughout the precinct, prices for

development sites in Edmondson Park are observed to be the highest paid in the SWGA (in excess of $3.5m/ha

in some instances).


34

5. CONCLUSION AND RECOMMENDATIONS

The growth outlook for the Study Area is strong, in line with the broader SWGA. The commitment to and planning

for the Western Sydney Airport, potential South West Rail extension and numerous motorway and road network

upgrades have cumulatively positioned the broader South West region on a new trajectory of growth aligning with

strategic planning objectives for the future Western City.

The growth of suburbs such as Edmondson Park, Leppington, Oran Park and Gregory Hills over the course of

2015-2017 has positioned the SWGA as a major residential precinct within metropolitan Sydney. The delivery of

additional retail facilities and employment areas is expected to further strengthen residential demand in precincts

such as the Study Area upon release to market.

5.1 TRENDS AND INFLUENCING FACTORS

The Study Area is subject to a variety of demographic and market factors which cumulatively influence the demand

and supply of residential product.

Housing Affordability

Household affordability is a continuing challenge with many households compromising on size and spatial

requirements to make purchases within their financial capacity. Whilst the average amount of median income spent

on housing is just below the 30% affordability threshold (a positive sign), significant price growth indicates that

these new residents would now struggle to purchase property within the area at current price points. Median

household incomes within the SWGA would allow for purchases of circa $540,000-$675,000. Market observations

indicate there is limited opportunity for securing housing at the bottom end of that scale.

More significantly, housing affordability threshold analysis of the primary feeder LGAs of Liverpool and

Campbelltown indicate that housing affordability thresholds of residents therein are even lower, indicating that the

main pool of buyers purchasing new residential product within the SWGA are already financially constrained by

existing price points. Unsurprisingly, this suggests there is limited capacity for further price growth in the SWGA.

The implementation of the Housing Diversity Package in 2014 has seen developers respond to ‘meet the market’

by providing a broader range of product which includes small lot housing and unit/apartments. The Housing

Diversity package has not only allowed developers to respond to affordability pressures faced by households, it

has eased commercial and feasibility pressures resulting from difficulties in site amalgamation and high site cost.

Whilst recent initiatives such as the stamp duty exemption for FHBs has supported buyer capacity for this segment

of the market, it remains to be seen if this will continue as the market adjusts quoting prices accordingly.

The increasing issue of housing affordability has undoubtedly created a shift in market preference and development

response - as price constrained buyers opt for small lot sizes or medium density product and developers adjusting

their product to meet the market.

Lifestyle Choices and Amenity Requirements

Whilst the transition to higher density living has been inevitable amid rising house prices and falling affordability,

market observations suggest that lifestyle preferences for low maintenance property with high amenity and a

shrinking average family size have equally contributed to the rising popularity of higher density product.

Notwithstanding a growing acceptance of apartment living, the ability of the SWGA and Study Area to capitalise on

higher density product (units and apartments) will be directly influenced by the amenity offer and transport

infrastructure delivered within the area.

Employment Opportunities

The South West Rail Extension has greatly improved accessibility to major employment markets in addition to

those employment opportunities located in the surrounding major centres (Liverpool, Campbelltown, Fairfield). New

employment precincts such as Gregory Hills are augmenting the local employment offer, with the progression of

major centres including Leppington and Oran Park offering future potential employment prospects.


35

The Western Sydney Airport will undoubtedly be the major catalyst for employment growth within the South West

region over the coming decades from the mid-2020’s. The development of the Western City as envisaged in the

District Plan will serve as a major employment hub within metropolitan Sydney, servicing a much wider employee

catchment than just South West Sydney. Accordingly, the profile of the SWGA as a residential precinct that

facilitates a ’30-minute city’ will undoubtedly rise commensurate with the establishment of WSA.

5.2 DEMAND FOR HOUSING IN STUDY AREA

Based on research and analysis of market activity and household preference in the South West region, a number

of recommendations are made for the Context Area and the Lowes Creek Maryland Precinct.

Profile of Market Demand

Housing affordability and level of infrastructure/amenity provision will continue to influence market preference and

product acceptability in the region. Price rises are conceivably approaching a tipping point where purchasers are

evaluating their location options - whether they compromise on size and select smaller format accommodation

close to established centres (e.g. Liverpool) or if they compromise on location and purchase house and land in the

South West that might be further away from existing retail and urban amenity.

Whilst the newer estates within the SWGA may be of better quality than older stock within established residential

areas around the Liverpool and Campbelltown CBDs, the similar (and in some cases higher) price points sought

within the SWGA will conceivably see more prospective purchasers weigh up options closer to existing retail

amenity and employment opportunities in the short term.

The principle of substitution refers to the number of reasonable alternative markets a purchaser can consider. For

example, prospective purchasers seeking accommodation in Oran Park may also consider Arcadian Hills in Cobbity

given their similar location and price points. However, Edmondson Park may not be considered a direct substitute

given the existing train station and higher price points. Price points generally dictate the substitutability of residential

property markets.

Despite a general fall in investor activity across metropolitan Sydney, investors are notably active in estates where

larger blocks are available. This cohort typically seeks opportunities for dual occupancy and secondary dwellings.

The affordability threshold analysis indicates a greater tolerance of household incomes to rental prices.


Household occupancy rates (on an overall/aggregate basis) are observed to have been rising over the 2006-2016

period. Table 2.12 indicates that household occupancy in LGAs that incorporate large swathes land for lower

density formats increasing more markedly.

On an overall basis, household occupancy rates in the LGAs of Camden, Liverpool, Campbelltown and Wollondilly

ranged from 2.99 to 3.25 persons per dwelling in 2016.

Council has advised that interpretation of 2016 census data by DPE’s demography unit indicates the following

household occupancy rates are appropriate:

• Low-low density single dwellings - 3.6 persons

• Low density single dwellings - 3.4 persons.

• Semi-detached, row housing - 2.9 persons.

• Flats, units, apartments - 2.3 persons.

These rates are applied to housing typology and mix in the next section and compared to the overall/aggregate

rates analysed in Table 2.12.

Housing Typology and Mix

It is assumed LCM is located generally closer to the future Marylands train station and retail centre, accordingly

playing a role in accommodating a greater proportion of smaller format housing (higher density product such as

units and apartments) compared to the broader Context Area.


36

Detached product is still expected to be the dominant typology, a function of general market expectations. The

following typology mix could potentially be considered in LCM and the Context Area. Table 5.1 recommends

potential dwelling mixes in Lower and Higher density scenarios.

Table 5.1: Product Typology and Mix (Lower Density and Higher Density Scenario)



Overall

Context Area (excluding LCM)

75%-80% 15%-20% 0%-5% 20%-30% 60%-70% 10%

LCM 70%-75% 20%-25% 5%-10% 30%-35% 55% 10%-15%



80% 20% 0% 20% 70% 10%

LCM 70% 25% 5% 30% 55% 15%



75% 20% 5% 30% 60% 10%

LCM 70% 20% 10% 35% 55% 10%

Source: AEC, DPE

The quantum of units that could be provided on the Site would ultimately depend on the respective capacity of retail

centre/s to accommodate multi-unit housing in buildings of 2-4 storeys and 6-8 storeys. Proximity to public transport

and scale of retail facilities are key determinants of the viability of higher density product.

Table 5.2 assigns weighted average densities by dwelling type, mix and lot size result in the Lower and Higher

density scenarios (to calculate average densities in LCM and the Context Area

Table 5.2: Market Densities to Build-Out (Lower Density and Higher Density Scenario)



Potential Dwellings





LCM 265.8ha 24.3 6,465 17.9 33.8 67.5

Total 782.8ha 22.0 17,209



LCM 265.8ha 26.4 7,009 18.4 33.8 67.5

Total 782.8ha 24.6 19,263

Source: AEC, DPE

If LCM (and the Context Area) had the capacity to accommodate 17,500 to 20,000 additional dwellings to 2036,

that would represent a capture of 22%-24% of projected housing demand in the Higher Growth Scenario.

Application of household occupancy rates to the market densities result in estimated population at build-out.

• Low-low density single dwellings - 3.6 persons2

• Low density single dwellings - 3.4 persons2.

• Semi-detached, row housing - 2.9 persons.

• Flats, units, apartments - 2.3 persons.

2 The proportion of low-low density dwellings is minimal in the assumed market densities, hence occupancy rates of low density

single dwellings are applied


37

Table 5.3: LCM - Dwellings and Population (Lower Density and Higher Density Scenario)

Study Area % Site Area

Net Dev. Area


Potential Dwellings

Household Occupancy

Population


Detached Dwellings 70% 186.1ha 17.9 3,325 3.4 11,306

Medium Density 25% 66.5ha 33.8 2,243 2.9 6,504

Flats/Units 5% 13.3ha 67.5 897 2.3 2,063

Total 100% 265.8ha 22.0 6,465 3.1 19,874


Detached Dwellings 70% 186.1ha 18.4 3,421 3.4 11,630

Medium Density 20% 53.2ha 33.8 1,794 2.9 5,203

Flats/Units 10% 26.6ha 67.5 1,794 2.3 4,127

Total 100% 265.8ha 24.6 7,009 3.0 20,960

Source: AEC, DPE

Application of household occupancy rates (in line with DPE’s demography unit’s interpretation of the 2016 census

data) result in 19,874 persons and 20,960 persons in the Lower Density and Higher Density scenarios respectively.

On an overall/aggregate basis, the estimated population in each scenario equates to 3.1 persons and 3.0 persons

per dwelling in the Lower Density and Higher Density scenarios respectively. This is consistent with the analysis in

Table 2.12 wherein household occupancy rates ranged from 3.0 to 3.1 persons per dwelling in 2016.

5.3 TIMING AND STAGING

Factors that underpin the likely timing of development in LCM and the Context Area relate directly to provision of

regional and services infrastructure. Market demand is strong and sustained. It is accordingly reasonable to

presume that industry will seek to meet the market and leverage opportunities that are available.

Spatial Distribution

The spatial distribution of dwelling types should have regard to their relative location with respect to proximity to

public transport nodes (present and future) and retail facilities. Lower density product should be located around the

fringe/frame of a precinct. Market acceptability and viability of higher density product in greenfield settings is

underpinned by proximity to public transport and retail amenity.

Given that retail facilities are not incubators but followers of population growth, the retail centre is unlikely to be

established until such time as a critical mass of residents is established. This follows that any higher density

dwelling product will be a longer term proposition.

Take-up Rates

At present, a shortage of serviced land has propelled land and dwelling prices. While an undersupply would

ordinarily result in high take-up rates, prevailing price levels have had a dampening effect on demand. While there

is underlying demand, effective demand (the capacity of the market to pay) is challenged.

Assuming pricing is at an equilibrium level, conventional wisdom would suggest a conservative take-up rate starting

from 150-200 lots per annum to potentially a peak of 300-400 lots per annum per estate. Nevertheless, astute

marketing, upfront delivery of community infrastructure and product branding have been observed to result in

phenomenal take-up exceeding 500 lots per annum in some estates even in the first year.

The direct relationship between affordability (and lifestyle) and smaller lot sizes is well-established, and will likely

persist over the medium-term. The shift towards medium-density and higher-density accommodation is also

growing - townhouses, villas and apartment products have wide market acceptance in the more mature North West

market while precincts such as Edmondson Park and Leppington (within the SW) are poised to deliver a substantial

quantum of higher density product over the next 5-7 years.

Tracking the market response to new medium-density and higher-density product within the SWGA is crucial to

delivering an appropriate typology mix at LCM, as well as timing of release of such product. The success of higher

density product will be dependent on the quality of amenity that can be established.


38

5.4 ROLE FOR STUDY AREA

Market preferences and attitudes are different compared to 10 years ago when first structure planning for the South

West Growth Centre was completed. Households (families, couples and lone persons alike) value lifestyle and

convenience. These values pervade all elements of choice including housing choice. While a large backyard may

still be sought after by some, it is generally a reducing requirement driven by cost and convenience.

By applying average density bands in Table 5.1, LCM and the Context Area have a combined dwelling capacity of

17,500 to 20,000 dwellings, representing 22%-24% of projected demand in the Higher Growth Scenario to 2036.

Even though the South West GA may have a theoretical dwelling capacity, it is possible not all land will be

developed. Landowner objectives, motivations and personal circumstances may not necessary align with

development imperatives and in precincts where ownership is highly fragmented, development take-up is expected

to be less than the theoretical capacity for dwellings.

Where housing formats and densities are market-supported (per dwelling types and mix in Table 4.8) it is necessary

to ensure there is greater dwelling capacity than is projected to 2036. The establishment of the Western City and

full operation of the Western Sydney Airport is likely to be beyond the projection timeframe and accordingly it is

prudent to ensure land supply is able to respond to housing demand.

Large swathes of land in majority control close to Bringelly Road (envisaged as a future mixed enterprise corridor)

and future Marylands train station are valuable opportunities. The LCM presents an excellent opportunity to meet

housing demand and assist in alleviating pressure on dwelling prices.


39

REFERENCES

ABS (2017a). TableBuilder Pro. Cat. No. 2073.0, Australian Bureau of Statistics, Canberra.

ABS (2017b). Census of Population and Housing Time Series Profiles. Australian Bureau of Statistics, Canberra.

DIRD (2016). An Airport for Western Sydney. Department of Infrastructure and Regional Development, Canberra.

DPE (2014a). A Plan for Growing Sydney. NSW Department of Planning and Environment, Sydney.

DPE (2014b). Population, Household and Dwelling Projections. NSW Department of Planning and Environment.

DPE (2016). 2016 New South Wales Local Government Area Population, Household and Dwelling Projections.

NSW Department of Planning and Environment.

GSC (2016). Draft South West District Plan. Greater Sydney Commission, Parramatta.

HNSW (2017a). Rents, Trend March 1990 - June 2017, Metropolitan LGAs. Housing NSW, Sydney.

HNSW (2017b). Sales, Trend March 1991 - March 2017, Metropolitan LGAs. Housing NSW, Sydney.

NSW Government (2015). State Environmental Planning Policy (Sydney Region Growth Centres) 2006. NSW

Legislation.

RMS (2016). Western Sydney Infrastructure Plan 1 July 2015- 30 June 2016 Report Card. Roads and Maritime

Services, Parramatta.

Transport for NSW (2016). Western Sydney Rail Needs Scoping Study Discussion Paper. September 2016.

UDIA (2017). State of the Land, National Land Survey Program. 2017. Urban Development Institute of Australia.

40


APPENDIX A: WESTERN SYDNEY INFRASTRUCTURE PLAN MAP

Figure C. 1: Western Sydney Infrastructure Plan Map

Source: RMS


41

APPENDIX B: DEVELOPMENT PIPELINE

Table B. 1: Residential Pipeline, SWGC and surrounds

Development/Address Type Status Dwellings

Cobbitty 507

605, 625, 635 Cobbitty Rd Lots Construction 107

400B The Northern Rd Lots Construction 79

Arcadian Hills (Stage 2); 5 Charles McIntosh Pky Arcadian Hills (Stage 9 & 10); 421D & E The Northern Rd

Lots Lots

Construction Completed

8 180

421D & E The Northern Rd Lots Development Approval 10

645 Cobbitty Rd Lots Subdivision Application 47

33 Bangor Tce Lots Development Application 76

Leppington/Denham Court 8,081

120 Ingleburn Rd Units Development Application 672

202 Byron Rd Units Development Application 534

1495 Camden Valley Way & 17 Cowpasture Rd Units Early Planning 500


76 Rickard Rd Units Development Application 250

31 Camden Valley Way & 128-320 Denham Court Rd Units Units

Development Approval Construction

210 58

28 Ingleburn Rd Units Units Units

Development Application Development Application Development Application

185 178 156

215 Rickard Rd Units Development Application 78

1300 Camden Valley Way Units Early Planning 8

Emerald Hills, 1100-1150 Camden Valley Way Lots Rezoning Approval 1,200

Willowdale Estate 1230 Camden Valley Way 1230 Camden Valley Way 128-320 Denham Court Rd128-320 Denham Court Rd128-320 Denham Court RdLott 999 Willowdale DrLot 2237 Camden Valley WyLot 9 Denham Court245 Jamboree Av128-320 Denham Court Rd128-320 Camden Valley Way128-320 Denham Court RdPrt Lot 999 Willowdale DrPt Lot 999 Willowdale Dr & Pt Lot 7 Camden Valley Wy128-320 Denham Court Rd128-320 Denham Court Rd

Lots Lots Lots Lots Lots Lots Lots Lots Houses Lots Lots Lots Lots Lots Lots Lots

Construction Construction Construction Subdivision Approval Subdivision Approval Construction Subdivision Approval Subdivision Approval Construction Construction Construction Construction Construction Construction Subdivision Application Subdivision Application

198 94

415 280 581 140 38

100 41 48

165 202 73 67

342 350

121 Raby Rd Lots Rezoning Application 32

51 St Andrews Rd Lots Construction 215

415, 435-439, 445, 455 Denham Court Rd Lots Construction 88

1450-1486 Camden Valley Way Lots Subdivision Approval 187

404 Fourth Ave Lots Subdivision Application 42

35 Ingleburn Rd Lots Subdivision Application 37

Oran Park 2,344

2-24 Grice St Units Units

Development Approval 33 13

2 Laura St Houses Subdivision Approval 16

223-225 South Cct Lots Houses

Subdivision Application 59 12

Lot 417 Marcus Loane Eay & Central Av Lots Subdivision Approval 10

116 Oran Park Dr Houses Houses

Development Approval Development Approval

9 14


42


1-13 Mills Ln Houses Development Application 7

3-5 Evans St Houses Contract let 4

Oran Park Town 400K The Northern Rd Lot D The Northern Rd Lot C The Northern Rd & Lot E Oran Park Dr Lot I The Northern Rd Lot K The Northern Rd

Lots Lots Lots Lots Lots

Construction Construction Construction Construction Construction

226 355 73

161 284

62 Oran Park Dr Lots Construction 339

116, 62, 40, Lot K Oran Park Dr Lots Subdivision Approval 169

48 Skaife St Lots Subdivision Approval 115

40 & 116 Oran Park Dr & 677 Camden Valley Way Lots Construction 97

116 & K Oran Park Dr & 677 Camden Valley Way Lots Construction 224

Lots B & C Peter Brock Dr Lots Subdivision Approval 72

58 Oran Park Dr Lots Subdivision Application 52

Gregory Hills 1,814

E Donovan Bvd Lots Construction 105

650A Camden Valley Way & 15 McKenzie Bvd Lots Construction 29

129 Turner Rd Lots Construction 29

A Village Cct Lots Houses

Construction 93 42

A Village Cct Lots Houses

Construction 102 18

D Donovan Bvd Lots Subdivision Approval 345

79 & 85 Turner Rd Lots Construction 53

26 Oaklands Cct Houses Construction 4

7 Water Gum Rd, Kookaburra & Gregory Hills Dr, Kavanagh St

Lots Subdivision Approval 257

133-135 Turner Rd Lots Early Planning 61

33 Village Cct, Kavanagh St & Donovan Bvd Lots Houses

Subdivision Approval 365 101

154 Kavanagh St Houses Contract let 2

103, 111 & 117 Turner Rd Lots Subdivision Application 39

133 Turner Rd, 13 Enterprise St, Jasmine Rd & 1-2 Barrett St


93 Turner Rd Lots Subdivision Application 56

135-137 Turner Rd Lots Subdivision Application 34

Outside SWGC

Austral 1,858

120 Tenth Ave Units Development Application 156

230 Sixth Av, 50 & 60-80 Edmondson Av Lots Houses

Development Application 125 137

260 Edmondson Ave Units Development Application 44

30 Sixteenth Ave Lots Building Application 26

50-56 Kelly Rd Lots Construction 138

220 Seventh Ave Lots Subdivision Approval 17

150 Tenth Ave Lots Subdivision Approval 48

80, 90 & 100 Seventeenth Av Lots Subdivision Approval 83

40 Seventeenth Ave Lots Subdivision Approval 22

35-37 Gurners Ave Lots Construction 84

50 Craik Ave Lots Subdivision Approval 23

61-63 Fifth Ave Lots Subdivision Application 25

20-30 Fourteenth Ave Lots Subdivision Application 44

10 Thirteenth Ave Lots Subdivision Application 29

31-45 Eighteenth Ave Lots Subdivision Application 48


43


40-46 Kelly St Lots Subdivision Application 158

221 Fifth Ave Lots Subdivision Application 166

45 & 55 Fourteenth St & 284 & 300 Fifteenth Ave Lots Subdivision Application 109

102-110 Ninth Ave Lots Subdivision Application 19

120 Ninth Ave Lots Subdivision Application 22

230-260 Fifth Ave Lots Subdivision Application 12

14-20 Gurner Ave Lots Subdivision Application 50

10-20 Seventeenth Ave Lots Subdivision Application 45

60-70 Seventh Ave Lots Subdivision Application 89

60 Eighteenth Ave Lots Subdivision Application 28

40 Craik Ave Lots Subdivision Application 23

30 Craik Ave Lots Subdivision Application 24


75, 95 & 115 Eighteenth Ave Lots Subdivision Application 77

60 Fourteenth Ave Lots Subdivision Application 23


225 Seventh Ave Lots Subdivision Application 28

Edmondson Park 2,684

Casuarina Waters 5 & 15 Rynan Ave 5 Rynan Ave

Units Units

Development Application Construction

110 82

245 Croatia Ave Units Development Application 105

240 Croatia Ave Units Development Approval 61

Lots 517-518 Okinawa Rd & 2142 Camden Valley Wy Townhouses Development Application 15

Lot 1 Campbelltown Rd & Soldiers Pde Townhouses Development Approval 21

Lots 409-117 Diamond Hill Cct & 1742 Camden Valley Wy Houses Construction 7

2112 Camden Valley Wy Houses Development Application 4

2 Hooper St & 22 Faulkner Wy Houses Development Application 3

2140 Camden Valley Wy Houses Development Application 3

5 Jardine Dr Houses Lots


2088, 2092 Camden Valley Way & 100 Croatia Av Lots Subdivision Approval 140

60, 64 & 70 Dalmatia Av Lots Subdivision Approval 135

200-220 Jardine Dr Lots Subdivision Approval 83

Ardennes Estate 2102, 2116, 2110, 2112 Camden Valley Way 2140 Camden Valley Way 2112 Camden Valley Way Lot 3 Camden Valley Way

Lots Lots Lots Houses

Subdivision Application Subdivision Approval Subdivision Approval Development Approval

80 50 38 12

1892 & 1902 Camden Valley Wy Lots Construction 73

65-75 Dalmatia Av Lots Subdivision Approval 73

1880-1882 Camden Valley Wy & Rynan Av Lots Subdivision Approval 69

2130, 2140 Camden Valley Wy Lots Subdivision Approval 64

15 & 25 Dalmatia Av & 260 Croatia Av Lots Subdivision Approval 62

2140 Camden Valley Way Lots Construction 60

250 Croatia Av & 40 Dalmatia Av Lots Construction 59

70-80 Croatia Av Lots Subdivision Approval 57

65-75 Rynan Av & Jardine Av Lots Construction 56

2140 Camden Valley Wy Lots Construction 50

245, 75-85 Croatia Av Lots Subdivision Approval 50

1952-1982 Camden Valley Wyy Lots Construction 49

115, 125, 135 & 215 Croatia Av Lots Rezoning Approval 49

122-126 Croatia Av Lots Subdivision Approval 47

160 & 170 Jardine Dr Lots Subdivision Approval 47


44


105 Jardine St & Buchan Av Lots Subdivision Approval 46

1952-1982 Camden Valley Wy Lots Construction 44

45-55 Rynan Av Lots Subdivision Approval 44

30 Buchan Av Lots Subdivision Approval 43

60 Rynan & Jardine Av Lots Construction 43

275 Jardine Dr & 15 Buchan Ave Lots Subdivision Application 42

20 Jardine St Lots Subdivision Approval 41

50 Dalmatia Av Lots Subdivision Approval 38

51 Dalmatia Ave Lots Subdivision Approval 37


75 Jardine St Lots Subdivision Approval 34

155 Jardine Dr Lots Subdivision Approval 32

100 Croatia Av Lots Early Planning 28

40 Dalmatia Croatia Ave & Zouch Rd Lots Building Application 27

95 Croatia Av Lots Subdivision Approval 27

300 Jardine Dr Lots Subdivision Approval 25

2000 Camden Valley Wy Lots Building Approval 24

200 (Croatia Av Lots Subdivision Approval 24

35 Dalmatia Av & Somme Av Lots Construction 24


1742-1752 Camden Valley Wy Lots Construction 21

240 Croatia Av Lots Construction 21

2000 Camden Valley Wy Lots Subdivision Approval 21


190, 200, 210 & 220 Jardine Dr Lots Subdivision Approval 15

45, 55 Rynan Av & Lot 1002 Colenso Cct Lots Contract let 14



Elderslie 430

48 Higgins Av Lots Development Approval 18

103B Lodges Rd Lots Construction 14

103 Lodges Rd Lots Development Application 11

103C Lodges Rd Lots Contract let 8

103B Lodges Rd Lots Construction 7

23-41 Camden Acres Dr Lots Development Approval 7

19-41 Irvine St & 167 Lodges Rd Lots Construction 36

158A Camden Valley Way Lots Building Approval 30

Kowald St Lots Early Planning 50

65 Hilder St Lots Subdivision Approval 31

58 Hilder St Lots Subdivision Approval 11

133, 143, 155F, 103B, 103C Lodges Rd Lots Construction 65

115, 103 & 103C Lodges Rd Lots Construction 87

47C Hilder St Lots Subdivision Approval 12

103 Lodges Rd, Kingsman Av Lots Construction 43

Gledswood Hills 1,617


190 Raby Rd Lots Rezoning Application 260

A The Hermitage Wy Lots Construction 15

Gledswood Hills Estate 184 Raby Rd 184 Raby Rd 19-21 & 810 Lillydale Av

Lots Lots Lots

Contract let Early Planning Subdivision Approval

100 413 65

B Fairbank Dr Lots Construction 18


45


C The Hermitage Wy Houses Construction 10

B Fairbank Dr Houses Construction 20

880, 900A, 900B Camden Valley Wy Lots Subdivision Approval 135

A, B, C Rymill Cr Lots Subdivision Approval 46

182-188 Raby Rd Lots Subdivision Approval 105

23 Longview Rd Lots Subdivision Approval 29

880 Camden Valley Wy & A The Hermitage Wy Lots Subdivision Approval 23

76 Fairbank Dr Lots Townhouses


182A, 184A & 188A Raby Rd Lots Subdivision Approval 64

1 Rymill Cr Houses Development Application 29

Kirkham 77

Wivenhoe Village, 229 Macquarie Grove Rd Houses Construction 77

Menangle Park 3,400

Cummins Rd & Menangle Rd Lots Planning Proposal 3,400

Wilton 16,500

Wilton Junction New Town (Picton Rd & Hume Hwy) Lots Planning Proposal 16,500

Mount Annan 168

1-5 Main St Townhouses Early Planning 140

81 Kokoda Av Lots Subdivision Approval 28

Gilead 1,655

Mount Gilead Lots Planning Proposal 1,655

Narellan 564

1 Elyard St Units Rezoning Approval 341

49 Lodges Rd Townhouses Units

Development Approval 39 6

73-83 Lodges Rd Houses Contract let 15

263A Camden Valley Wy Townhouses Construction 32

73-83 Lodges Rd Houses Construction 9

49 & 49A Lodges Rd Townhouses Development Application 122

Spring Farm 2,454

21 Springs Rd Lots Construction 108

57 Springs Rd Lots Construction 177

172, 172A, 185 Richardson Rd & 12B Moreton Bay Av Lots Building Application 113

A Plymouth Bvd Lots Contract let 392

275A, C, D, E, F Richardson Rd Lots Building Application 9

A & C Plymouth Bvd Lots Subdivision Approval 26

279 Richardson & Springs Rds Lots Subdivision Approval 43

B Holland Dr Lots Building Approval 11

277, 277A, 275C & D Richardson Rd Lots Subdivision Application 390

130, 140 Springs & Kale Rd Lots Construction 59

235 Macarthur & 66 & 110B Spring Rds Lots Contract let 123

Springs & Macarthur Rds Lots Construction 287

142 Springs Road Lots Early Planning 57

C & D Nicholson Pde, A, B, D & E Corder Dr & 277, 277A, 275C & 275D Richardson Rd


130, 140A, 144 & 156 Springs Rd & 48 Archer Rd Lots Subdivision Approval 63

142 & 156 Springs Rd & 45 & 48 Archer Rd Lots Subdivision Approval 85

142, 156 & 190 Springs Rd & 45 & 48 Archer Rd Lots Subdivision Approval 102

10 Springs Rd Lots Development Approval 19

Camden 447

2 John St Units Development Approval 165

38 Old Hume Hwy Townhouses Construction 5


46


27 Elizabeth Macarthur Av Townhouses Construction 6

5-9, 11, 13 Ironbark Av Lots Construction 17

277 Old Hume Hwy Units Building Application 33

125 Lodges Rd Houses Development Application 32


26, 28 & 30 Old Hume Hwy Units Development Approval 11

Source: Cordell Connect

47


APPENDIX C: HOUSING DEMAND PROJECTION METHODOLOGY

OVERVIEW

Planning for society’s present needs is categorically less complex than trying to predict what those needs might be

in the future. The main purpose for dwelling and growth forecasting is to assist decision makers and land use

planners on the future use of land as well as the quantum required to accommodate that growth.

It is important to understand the difference between possible views of the future. The ABS makes the following

distinctions:

• Projection: A projection simply indicates a future value for the population if the set of underlying assumptions

occur. Projections indicate what future values for the population would be if the assumed patterns of change

were to occur. They are not a prediction that the population will change in this manner.

• Forecast: In a forecast, the assumptions represent expectations of actual future events. Forecasts speculate

future values for the population with a certain level of confidence, based on current and past values as an

expectation (prediction) of what will occur.

• Target: A target is a statement of aspiration or a goal, and not necessarily an expectation, a “what-if” or a

possibility.

The process of developing dwelling projections to ascertain the likely nature and quantum of residential growth and

associated demand for dwellings is accepted practice for long term, strategic land use planning. Dwelling

projections seek to understand past growth and change based on ABS demographic and population data, forward

projections are then made on the basis of historical growth trends and distribution of dwellings.

In the case of the Study Area, owing to limited historical dwelling and residential activity, developing dwelling

projections with a level of certainty is challenging. New major items of economic infrastructure (e.g. airport, train

line, regional highway, etc.) all have the potential to be game-changing. Employment and population patterns

are likely to assume completely new growth trajectories resulting from the release and rezoning of Greenfield

areas. Relative house prices, distance (travel times) to employment centres and employment patterns all have

the ability to cumulatively influence where and how many dwellings are demanded.

AEC is therefore of the view that a slightly different approach needs to be taken to estimate the quantum of

dwellings that should be catered for in the future. Rather than looking to the Study Area’s past to project what

might happen in the future, we have examined a series of relationships that influence changes in dwelling stock

in metropolitan Sydney. Overall projected population growth in NSW and metropolitan Sydney (official DPE

projections) is assumed to be unchanged, instead modelling housing demand and distribution patterns in the

Growth Areas based on a projected ‘foundation view’ of change underpinned by a shift in demand from existing

suburbs to Greenfield suburbs (i.e., to those in the Growth Areas). This allows an understanding of the potential

demand for new dwellings that could result in the Study Area following a redistribution of dwelling activity from

the rest of metropolitan Sydney.

The Study combines two models to enable the projection of dwelling need in the Growth Areas (GAs) for the period

from 2016 to 2036. The modelling incorporates official projections of population, households and dwellings for

metropolitan Sydney (DPE, 2016), divided into the GAs and the Rest (i.e. balance) of metropolitan Sydney.


48

MODELS USED

Two models (the Ratio Model and the Equation Model) are used in developing projections of dwelling demand and

development across the Growth Areas. These projections are then distributed across the Growth Areas in a third

model (the Distribution Model). Each of the models is described in more detail below.

Ratio Model

This is a model of basic ratios, and trends in these ratios, which deconstruct these variables and tie them together

over time. A simulated shock (a nominated percentage) in this model precipitates a redistribution of activity in these

official projection variables within metropolitan Sydney, particularly to the GAs.

The redistribution of population activity is an input into the second model - the equation model.

Equation Model

The equation model is a historical estimation, using a combination of time series and cross sectional regional data

for metropolitan Sydney, of an econometric relationship, modelling changes in dwelling stock determined by

explanatory variables, i.e. relative house prices, distance friction, employment patterns and changes in households.

The projections from the equation model are linked to those of the ratio model, in that the ratio model supplies a

projected ‘foundation’ view of changes in households in the projection area. The default setting of the other

explanatory variables to zero change (i.e. assuming they are constant from 2011) in the projection period tends to

dampen the growth of projected dwelling stock in the equation model. For example, a change in the distance friction

variable would change projected growth of dwelling stock in the projection area (for instance, reduced travel times

following the completion of a train line would increase growth in dwelling stock in the projection area.

The ability to develop scenarios for the future path of the explanatory variables in the equation model, and for this

to be applied to each of the GAs, makes the equation model the primary projection modelling tool.

Distribution Model

Projections of dwelling demand from the equation model are distributed to each GA using qualitative weighted

distribution criteria regarding the anticipated ‘attractiveness’ of each GA relative to each other.

Five criteria were used, with each centre scored based on a value from 1 to 3, with the 3 being the highest score

(i.e., most attractive centre for the corresponding criteria), and the other centres given a relative score for the criteria

compared to the most attractive centre. This was not necessarily a ranking of 1 through 3, as some centres may

score equally on certain criteria.

The five criteria each centre was scored on were:

• Affordability: how affordable the GA is considering likely price points and incomes of those emigrating to the

GA.

• Proximity/ Access to CBD: the relative accessibility of the GA to the Sydney CBD.

• Proximity/ Access to Key Employment Centres: the relative accessibility of residents of the GA to jobs.

• Transport Infrastructure Access: overall accessibility and functionality of transport networks linking the

growth area to other areas of Sydney.

• Social Infrastructure: proximity to and quality of social infrastructure supporting the centre (e.g., health

centres, education, community, recreational).

Each of the GAs were scored against the five criteria for the years 2021, 2026, 2031 and 2036. Equal weightings

were applied to each criteria in each time period.

The sum product of the scores for each GA in each time period were squared to provide a final score, which was

used to reflect the ‘attractiveness’ of each area and provide a relative share of total demand to apportion to each

area.


49

SUMMARY OF DEMAND PROJECTIONS FOR GAS IN AGGREGATE

This section outlines demand projections for the GAs as a whole as modelled using the ratio and equation models.

Two demand scenarios are modelled:

• The first scenario is premised on there being a 20% capture of new housing demand and consequent

residential activity of metropolitan Sydney by the GAs. This is termed a ‘Lower Growth Scenario’.

• The second scenario assumes a 30% capture of new housing demand and consequent residential activity of

metropolitan Sydney by the GAs. This is termed a ‘Higher Growth Scenario’.

A previous version of the metropolitan plan (Metropolitan Plan for Sydney 2036 released in 2010) articulated an

aspirational target split of new dwellings (i.e. 70% to be in existing suburbs and 30% in Greenfield areas). It was

further espoused that 85% of new Greenfield dwellings should be in the “Growth Centres”, or Growth Areas as

referred to in this Study. This would imply an allocation of around 25% (30% x 85%) of growth in dwellings in

Metropolitan Sydney is targeted to be in the Growth Areas.

The table below contains baseline official projection statistics for the combined GAs and rest of metropolitan

Sydney. These baseline projections were used as a basis for projecting additional dwelling growth in the GAs.

Table C.1. Baseline (Official) Projections, 2011 to 2036

Indicator 2011 2016 2021 2026 2031 2036 Avg. Ann. Change

Sydney Metropolitan Area (a)

Population 4,286,350 4,681,800 5,106,450 5,537,800 5,975,700 6,421,950 1.6%

Households 1,566,500 1,726,900 1,891,500 2,058,350 2,230,600 2,409,300 1.7%

Dwellings 1,673,900 1,844,800 2,019,700 2,196,750 2,380,000 2,569,900 1.7%

Growth Areas (b)

Population 74,598 100,365 112,861 125,730 138,607 151,797 2.9%

Households 23,761 31,667 35,977 40,345 44,746 49,387 3.0%

Dwellings 24,926 33,243 37,767 42,345 46,970 51,842 3.0%

Rest of Metropolitan Sydney (c)

Population 4,211,752 4,581,435 4,993,589 5,412,070 5,837,093 6,270,153 1.6%

Households 1,542,739 1,695,233 1,855,523 2,018,005 2,185,854 2,359,913 1.7%

Dwellings 1,648,974 1,811,557 1,981,933 2,154,405 2,333,030 2,518,058 1.7%

GAs as Proportion of Metropolitan Sydney

Population 1.7% 2.1% 2.2% 2.3% 2.3% 2.4% -

Households 1.5% 1.8% 1.9% 2.0% 2.0% 2.0% -

Dwellings 1.5% 1.8% 1.9% 1.9% 2.0% 2.0% -

Notes: (a) Sydney Metropolitan Area projections are based on the latest (2016) projections from DPE. (b) GA projections are based on 2014(b) DPE projection series, as the latest (2016) DPE projections are not presented at geographies lower than LGAs. (c) This is calculated as the difference between Sydney Metropolitan Area projections and GA projections. Sources: DPE (2016, 2014), AEC.

The sections below outline preliminary demand projections in each scenario where a reduction in residential activity

are assumed in the rest of metropolitan Sydney as a result of development in the GAs.

Scenario 1: 20% Capture of Dwelling Demand and Activity from Rest of Metropolitan Sydney

This demand scenario assumes 20% of dwelling demand and residential activity in metropolitan Sydney is captured

in the GAs, with the other 80% captured in the rest of metropolitan Sydney.

Table C.2. Scenario 1 - Modelled (Ratio Model) Projections of GAs and Rest of Sydney (20%)


Growth Areas

Population 74,598 100,365 189,596 279,690 372,070 466,594 7.6%


50


Households 23,761 31,667 64,490 97,752 132,173 167,869 8.1%

Dwellings 24,926 33,243 68,223 103,633 140,283 178,263 8.2%

Rest of Metropolitan Sydney

Population 4,211,752 4,581,435 4,916,854 5,258,110 5,603,630 5,955,356 1.4%

Households 1,542,739 1,695,233 1,827,010 1,960,598 2,098,427 2,241,431 1.5%

Dwellings 1,648,974 1,811,557 1,951,477 2,093,117 2,239,717 2,391,637 1.5%


Population 1.7% 2.1% 3.7% 5.1% 6.2% 7.3% -

Households 1.5% 1.8% 3.4% 4.7% 5.9% 7.0% -

Dwellings 1.5% 1.8% 3.4% 4.7% 5.9% 6.9% -

Sources: DPE (2016, 2014), AEC.

A comparison of the modelled projections (from each model) against official projections is presented below.

Table C.3. Scenario 1 - Projections of Dwelling Demand (Modelled and Official) for GAs

Projection Series

2011 2016 2021 2026 2031 2036 Avg. Ann. Change

Equation Model 24,926 33,243 64,485 95,804 128,378 162,571 7.8%

Ratio Model 24,926 33,243 68,223 103,633 140,283 178,263 8.2%

Official Projections 24,926 33,243 37,767 42,345 46,970 51,842 3.0%


Scenario 2: 30% Capture of Dwelling Demand and Activity from Rest of Metropolitan Sydney

This demand scenario assumes 30% of dwelling demand and residential activity in metropolitan Sydney is captured

in the GAs, with the other 70% captured in the rest of metropolitan Sydney.

Table C.4. Scenario 2 - Modelled (Ratio Model) Projections of GAs and Rest of Sydney (30%)


Growth Areas

Population 74,598 100,365 233,663 368,103 505,973 647,150 9.0%

Households 23,761 31,667 80,865 130,719 182,316 235,825 9.6%

Dwellings 24,926 33,243 85,713 138,828 193,803 250,773 9.7%

Rest of Metropolitan Sydney

Population 4,211,752 4,581,435 4,872,787 5,169,697 5,469,727 5,774,800 1.3%

Households 1,542,739 1,695,233 1,810,635 1,927,631 2,048,284 2,173,475 1.4%

Dwellings 1,648,974 1,811,557 1,933,987 2,057,922 2,186,197 2,319,127 1.4%


Population 1.7% 2.1% 4.6% 6.6% 8.5% 10.1% -

Households 1.5% 1.8% 4.3% 6.4% 8.2% 9.8% -

Dwellings 1.5% 1.8% 4.2% 6.3% 8.1% 9.8% -


A comparison of the modelled projections (from each model) against official projections is presented below.

Table C.5. Scenario 2 - Projections of Dwelling Demand (Modelled and Official) for GAs

Projection Series

2011 2016 2021 2026 2031 2036 Avg. Ann. Change

Equation Model 24,926 33,243 79,107 124,561 171,656 220,993 9.1%

Ratio Model 24,926 33,243 85,713 138,828 193,803 250,773 9.7%

Official Projections 24,926 33,243 37,767 42,345 46,970 51,842 3.0%



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