URBIS Market Report Parramatta

MARKET OUTLOOK PARRAMATTA

Parramatta is Sydney’s second CBD and is benefiting from multi-billion infrastructure projects that are improving transport connectivity, employment opportunities, education and entertainment.

Top: Parramatta River; Left: Westfield Parramatta; Right: Parramatta Train Station

LOCATION & ACCESSIBILITY

Parramatta is strategically located at the geographic heart of Sydney, around 23 km west of the Sydney CBD. The Parramatta CBD has been designated as Sydney’s second CBD and is recording significant development to service the growing Western Sydney region. Parramatta is well connected by public transport, with the Parramatta Train Station providing residents with direct access to the Sydney CBD and throughout Sydney. Parramatta River ferry services connect Parramatta to Darling Harbour and Circular Quay. Public transport will continue to improve with the Parramatta Light Rail and Sydney Metro West currently under construction. There is an extensive network of public and private schools in the area including Parramatta East and West Public School, Parramatta High School, Arthur Phillip High School, Macarthur Girls High School and Parramatta Marist High School, to name a few. New schools are also being opened regularly to meet the demand from new families living in the area. Tertiary education options are accessible to residents with Western Sydney University and the University of Sydney (both ranked in the top 2% of universities in the world) having campuses in the area.

The world renowned Westmead Health Precinct is located 2km away and is one of the largest health, education, and research precincts in Australia. Comprised of four hospitals, two universities, two research institutions and many allied health services, residents are provided with high quality specialised healthcare and employment opportunities.

Parramatta is home to a several retail activity centres including Westfield Parramatta, one of the largest shopping centres in Australia featuring over 450 stores. The centre is anchored by David Jones, Myer, Kmart, Target, Coles and Woolworths and also features several entertainment options for residents.

Residents of Parramatta have access to extensive open space and outdoor recreation facilities that support an active outdoor lifestyle. Situated along the Paramatta River, the vast Parramatta Park offers opportunities to exercise, socialise, and is also a venue for major events. These large open spaces are complimented by smaller neighbourhood parks and reserves, Commbank Stadium and Rosehill Garden Racecourse.

12.

13. Western Sydney University

- Paramatta CBD

14. Western Sydney University

- Rydalmere

15. Western Sydney University

-

09. Mother Teresa Primary School

10. Arthur Phillip High School

11. Macarthur Girls High School

The King’ School

Westmead 16. The University of Sydney –Westmead Clinical School

Harris Park

Parramatta boasts a high level of amenity for residents across shopping, dining, healthcare, education and open space.

HEALTH

17. Westmead Hospital

18. Westmead Private Hospital

19. The Children’s Hospital at Westmead

20. Cumberland Hospital

21. The Westmead Institute for Medical Research

22. Albion Medical Practice

23. Wigram Street Family Medical Practice

24. City West Specialist Day Hospital

PARKS, RECREATION AND ENTERTAINMENT

25. Prince Alfred Square

26. James Ruse Reserve

27. Mays Hill Oval

28. Robin Thomas Reserve

29. Parramatta Park

30. Parramatta River

31. Rumsey Rose Garden

32. Stewart Street Reserve

33. Queen’s Wharf Reserve

34. Old Kings Oval

35. River Foreshore Reserve

36. Hambledon Cottage Reserve

37. Rosehill Gardens Racecourse

38. Commbank Stadium

39. Riverside Theatres

40. Parramatta Civic Centre

DINING

41. Church Street Dining Precinct

42. Wigram Street Dining Precinct

LEGEND Train Station

Bus Interchange Ferry Wharf

11

12 (3.3km)

14 (1.0km)

37 (0.9km)

Parramatta

Parramatta

INFRASTRUCTURE & EMPLOYMENT

INFRASTRUCTURE

SYDNEY METRO WEST

Estimated Completion: 2030 - $18 billion

A new underground rail line connecting Parramatta and the Sydney CBD proposed to increase the speed and capacity of travel between Sydney’s largest CBDs.

PARRAMATTA LIGHT RAIL

Estimated Completion: 2024 - $2.9 billion

Stage 1 is set to connect Westmead to Carlingford via Parramatta CBD and Camelia, with Stage 2 proposed to extend to Wentworth Point and Sydney Olympic Park.

POWERHOUSE MUSEUM PARRAMATTA

Estimated Completion: 2025 - $550 million

A new Powerhouse Museum on the Parramatta River, which will serve as an anchor for a new arts and cultural precinct.

EMPLOYMENT

For the purpose of this profile, the Parramatta Study Area has been defined as the suburb of Parramatta. The Parramatta CBD is the commercial, administrative, and cultural epicentre of Western Sydney and caters to a growing number of government agencies and corporations. This growing business presence has led to increased residential demand from the large number of white-collar professionals working in the area.

The Parramatta CBD is growing rapidly as Sydney’s second CBD. The newly developed Parramatta Square encompasses a big part of this recent growth and is home to NSW Government agencies, National Australia Bank, GT Insurance, Spirit Super and Indesco. The final tower which was completed in late 2022, has delivered 240,000 sq.m of commercial office accommodating around 24,000 workers.

Employment in Parramatta CBD grew by approximately 30,000 new jobs over five years from 2016 to 2021.

Parramatta residents will benefit from ongoing infrastructure investment which will improve connectivity, civic spaces, education and create more employment opportunities.

PARRAMATTA AQUATIC AND LEISURE CENTRE

Estimated Completion: 2023 - $89 million

Located in Parramatta Park, the centre will feature a 50m heated outdoor pool, a 25m heated indoor recreational pool along with fitness centre, café, and amenities.

PARRAMATTA RIVERSIDE THEATRES

Estimated Completion: 2026 - $136 million

Riverside Theatres will undergo a transformation into Western Sydney’s pre-eminent arts and cultural precinct, with City of Parramatta Council approving the business case for its redevelopment.

PARRAMATTA QUAY & CHARLES STREET SQUARE UPGRADE

Estimated Completion:

2023 - $10 million

The proposed upgrades to Charles Street Square and the Ferry Wharf will improve access from the. Parramatta River foreshore to the city.

According to the Property Council of Australia Office Report, the Parramatta CBD has around 960,000 sq.m of office space and will continue to expand, with approximately 71,000 sq.m of office supply projected to enter the market by 2025+.

The NSW Government has lodged a State Significant Development application for the nearby Westmead Health and Education precinct, which will provide 400,000 sq.m of health, research and education space. By 2036, the precinct is expected to accommodate 30,000 staff and 10,000 students.

EMPLOYMENT GROWTH WITHIN EMERGING CENTRES

2023 - 2038

Source Transport for NSW; Prepared by Urbis

POPULATION & DEMOGRAPHICS

POPULATION

The Parramatta Study Area had over 25,745 residents in 2016 and had grown at 3.3% per annum to 30,211 in 2021.

Transport for NSW forecasts the population to grow by approximately 33,600 people over 15 years to 2038, increasing by 5.1% per annum. Growth slowed during the pandemic because of the impacts of COVID-19, although, with borders fully reopening to international migration, forecasted growth is healthy.

Parramatta is recording robust population growth characterised by attracting young and multicultural residents.

DEMOGRAPHIC

Parramatta is characterised by a high proportion of white-collar professionals, and couple families with no children, typically living in rented apartments. In addition, there is a relatively high proportion of residents attending tertiary education institutions due to the presence of Western Sydney University’s campuses as well as several other tertiary institutions in the area. These demographic attributes, coupled with steady population growth, are expected to drive demand in the high-density residential market moving forward.

With 45% of residents aged between 25-39 years, the area is largely characterised by couples without children (40%). These residents are looking to live close to employment opportunities and amenity and are willing to rent.

Parramatta is attracting more aspirational people, with the average household income increasing by 4.8% per annum over the last ten years to $108,784 in 2021. The average household income in the region has grown faster than the Greater Sydney average, which recorded 3.7% per annum between 2011 and 2021.

Parramatta is a diverse and multicultural area with three quarters of the population born overseas. The top three countries of origin are India, China and the Philippines.

Source: ABS Census; Prepared by Urbis

WHO LIVES IN PARRAMATTA (2021)?

Source: ABS Census 2021; Prepared by Urbis

RESIDENTIAL ANALYSIS

The Parramatta Study Area has recorded capital growth in median unit prices over the last ten years averaging 2.3% per annum to June 2023. Prices recorded strong growth from 2013 to 2017 before declining in 2018 and 2019 in line with the broader Sydney market downturn and then stabilising in the last three years.

In the June quarter of 2023, the median apartment price reached $610,000 across 229 transactions. Parramatta’s apartment price remains more affordable than the Greater Sydney average of $750,000. The median unit price to household income ratio of 5.3 in Parramatta is substantially lower than the Greater Sydney ratio of 6.6, which is expected to continue to be an important driver of housing demand.

In the 2021 Census, apartments accounted for 75% of dwellings in the Study Area compared to 28% of in Greater Sydney, reflecting the increased density of development in the area. Given the substantial infrastructure investment, employment growth along with the demographic attributes of residents in Parramatta, it is expected to remain a popular location for apartment development. This is reflected in the significant development pipeline in the Study Area of 5,023 units.

Parramatta has experienced strong growth in median unit prices over the past ten years and offers strong affordability.

Source: Cordell Connect; Urbis Essentials

Source: ABS Census 2021; Urbis

Source: ABS Census; Pricefinder; Urbis

Source: APM PriceFinder; Urbis

Source: APM PriceFinder; Urbis

RENTAL ANALYSIS

The strength of the Parramatta Study Area rental market is highlighted by its indicative gross rental yield of 4.8% for units in the year to June 2023. This is higher than the Greater Sydney average of 4.4%.

The Parramatta Study Area is popular amongst young professional couples and students due to its proximity to employment nodes, tertiary education facilities, retail, and public transport. These segments have historically driven rental demand in the region. The majority of households in the Parramatta area (72%) were renting as of 2021, which was higher than the Greater Sydney average of 37%.

According to the NSW Department of Communities and Justice, the median weekly rent for two-bedroom units in Parramatta was $605 in the June quarter of 2023, lower than the Greater Sydney average of $700. Rents in the region declined during the pandemic as Parramatta has historically attracted many international migrants and students. The reopening of Australia’s border to migrants and students has been a critical boost to rental demand, with rent increasing by 48% in the last two years.

Parramatta is one of the most attractive rental markets in Sydney with almost three quarters of households renting.

MEDIAN WEEKLY RENT FOR 2 BEDROOM UNITS

June 2018 to June 2023

SUMMARY

PROPORTION OF RENTING HOUSEHOLDS

Urbis has investigated the trends that will deliver a sustainable residential market comprising of sustained and confident growth now and into the future. This involves recognising the key fundamentals that investors seek to secure returns, as well as identifying regions that will be the most desirable to live, work and play. Urbis has concluded that the most desirable locations are those that deliver “P.I.E” – Population, Investment and Employment growth.

P – Population Growth

Parramatta is projected to grow by an additional 33,600 new residents by 2038, growing at a fast rate of 5.1% per annum and well above that of Greater Sydney. New residents are attracted by the transport connectivity, access to employment opportunities, education institutions, retail amenity and open space.

I – Investment & Infrastructure

The region has benefited from significant infrastructure projects across transport, education, health, and recreation in recent years. This investment will continue with around $30 billion to be investment into Parramatta across major projects including Sydney Metro West, Parramatta Light Rail, Powerhouse Museum, Parramatta Aquatic and Leisure Centre, Paramatta Riverside Theatre and Parramatta Quay & Charles Street Square Upgrade.

E – Employment Opportunities

Proximity to employment nodes and centres is essential for residential growth. New jobs lead to new residents as people seek to minimise travel times and improve work/life balance. With Parramatta’s strategic location, residents are surrounded by several growing employment centres including Parramatta CBD and Westmead Health Precinct.

Source: Pricefinder; Urbis

Source: NSW Department of Housing Rent Data; Urbis

Source: ABS Census; Urbis

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