Silverwater, Sydney: Suburban Transformation

This assignment delves into the changing dynamics of Silverwater, a suburb in Sydney. It analyzes current property trends and prices in the area, considering factors like rental markets and sales figures. The assignment also explores demographic shifts and their influence on the suburb's character. Furthermore, it examines development projects and their impact on Silverwater's social and economic landscape.

Retail Property Analysis Silverwater
Economic Research Assessment
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Executive Summary
Property market analysis depicts economic situations prevailing within an area that can generate
impacts from major macro-economic factors. The scope of current analysis includes retail market
analysis of Silverwater, located in New South Wales. Globalisation, technological development
and increase in competition has led to emergence of Silverwater as being a warehouse and
factory facility for major companies since a prolonged period of 50 years. The location has
developed currently to support major economic activities in the region along with
accommodation of retail, commercial and other spaces. The current analysis depicts trends from
past, present and the future.
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Table of Contents
Executive Summary.........................................................................................................................2
1.0 Introduction................................................................................................................................4
2.0 Retail Segment : Silverwater.....................................................................................................4
3.0 Happenings in past, present and future predictions...................................................................8
4.0 Economic Climate.....................................................................................................................9
5.0 Analysis according to Property Clock.....................................................................................13
6.0 Conclusion...............................................................................................................................15
Reference Lists..............................................................................................................................17
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1.0 Introduction
Property economic analysis of a location allows detailed understanding in regards to a particular
locality. Silverwater is located in western Sydney in New South Wales, Australia in the suburbs.
It is situated almost 20 kilometers away from Sydney on southern banks of Parramatta River
(Property, Retrieved on 15th November 2017). The place provides a good location to multiple
medium and small businesses with its low rental, lease rates the location provides immense space
for warehouse facility. There are multiple number of companies that are operating in the place
for over 50 years due to its connectivity to central Sydney location. The location was developed
primarily to provide for medium and heavy industrial areas. It mainly caters to industrial
locations with a few residential areas (Baum, 2008). Red Yard primarily houses a number of
restaurants and commercial complexes. The scope of the current study analyses economics
related to the location in retail property segment of Silverwater. It also encompasses its current
analysis in Property Clock and further depiction as to where it is expected to reach in future.
2.0 Retail Segment : Silverwater
Silverwater offers steady connectivity to Sydney which offers immense opportunity for growth
and developments (Ashton, 2010). City of Paramatta Council has taken UrbanGrowth NSW
development with state and local government agencies. The development of Parramatta Road
Corridor Strategy have further led to development of Retail and Commercial Market Demands.
The Council’s strategy planning has established long-term vision along with planning framework
that incorporates transport, infrastructure, economic measures, public domain and various other
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measures. With such measures there has been tremendous setting up of Retail and Commercial
Market Demand Study led to demand of quantum of retail along with commercial floor space
(Chung, 2016). Developments in the area has been planned identifying population growth in
population of Sydney and changing economic structures along with sustainable methods. There
are ways devised ways and means by which existing infrastructure to increase retail segment
development. Renewal of existing urban areas for increasing greater retail space for service or
transportation purposes. Mostly the area includes small retail stores of commercial holding with
absence of major retail brands in the area (Davidson, 2012). Majority of retail properties across
Silverware are available on leases which varies depending on specific areas.
Figure 1: Property Prices Predictions
Source: (Realcommercial, Retrieved on 15th November 2017)
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Analysis of macro factors in the area reflects that political influence on the area is impacted by
Council from City of Paramatta (Gumtree, Retrieved on 15th November 2017). Sydney
businesses have been impacted by means of changing dollar, competition from overseas market,
changing trends of consumers due to globalisation and increased competition from overseas
market. There has been higher input costs in the industry as compared to neighboring markets
hence due to rising cost pressures many businesses are seeking for productivity gains leveraging
(Tranter, 2099). There are a multiple number of companies who have offshored their production
units in view of rising costs from products especially in automotive and furniture sector.
Figure 2: Australian Property Prices Trends
Source: Dallas Federal Reserve, UBS
Macro-Factors Analysis
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The Council takes major decisions and applies bureaucratic control for development and growth
related to the area. There is road connectivity and other railway access that is being developed
such that the area can prosper and can lead to further investment opportunities in the future
(Zhou, 2016). Economic determinant of the area reflects that there remains high scopes for
development with presence of a number of mining companies along with location of several
other large companies. The location is more or less economically independent that allows for
further prospects of development. Social factors like demographic and other cultural trends in the
area are relatively low with low levels of population. There is a limited number of people
residing in the area with very little jobs prospects to work in companies located in the region
(Symes, 2007). Social investments in the area is relatively less with schools and hospitals located
at further vicinity. Legal factors within the area provides that all its jurisdictions falls under the
city of Parramatta. Environmental standards placed within the locality are however low as
against to other localities. As there is a high level of environmental pollution existing at the
location with several factories and warehouse facilities and travel related infrastructure present
(Baum, 2008).
The location is extremely well suited and can cater to large number of large retailers that can act
as drivers to growth and development of the region. Large format retailing has begun in recent
year period and includes bulky goods along with retail showroom usage. Silverwater acts as a
warehouse facility for many companies it can make use of its retail space and include large
format retailing to include accessories, automotive arts, camping outdoors, repairs and services,
pet supplies, electric light fittings, furniture, bedding and so on (auspost.com.au, Retrieved on
16th November 2017). Such large format retailing stores are absent in nearby areas and the
location can act as a hub providing space and adding to the facility for the same.
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3.0 Happenings in past, present and future predictions
The location of Silverwater is such that it provides high connectivity to various locations
especially to Sydney’s central business district. Roadways, bus services, connect the location,
however there is still no accessibility to the place by means of railway networks (Render, 2014).
It was only in May 2016 that Silverwater became City of Paramatta’s local government area
from Auburn City Council. Historically all developments and growth I n the city had been
attributed to Auburn Council ever since 1906. Earlier inhabitants of the area includes Wangal
clan of the Eora or Tharawal culture. The area had European settlements that dates back to 1797
ever since Captain Henry Waterhouse and Lieutenant John Shortland of the Sirius received the
land. Post such period the land was granted to John Blaxland and Greogory Blaxland
(domain.com.au, Retrieved on 15th November 2015). They started with agricultural enterprise,
salt making factory along with breeding cattle, which later led to setting up of manufacturing of
tweed and blankets. Silverwater is also often referred to as North Auburn due to its close
proximity to Auburn North Public School. In the past it primarily acted as a land for use of
persons who held them but recently it has flourished to include industrial areas with parks,
institutions and residential properties as well (Scholz, 2013). It comprises of a small population
of 5,043 with various business factories being set-up there. Landmarks in the area are
Silverwater Correctional Complex, Silverwater Baths, Silverwater Bridge and Silverwater Fire
Station. Silverwater has come to become a major retail property space allowing for immense
developments and prospects in the future. Prices in the area are affordable in regards to rent,
leases as well as purchases. Markets in the area are not yet saturated which provides immense
capabilities for further expansion. Investors can take advantage of the current situation prevailing
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at the location and develop several properties for future sale in the locality (Council, 2011). It
can be used to attract several companies from major city locations to this destination with
building up of roadways connectivity in the area. The area can provide comparative benefits of
low prices and connectivity that can make it a major attraction for retail spaces for large as well
as smaller companies. Thus, the future trend of the market looks attractive as against its present
and past. It can cater to becoming a retail hub in near future with further developments.
4.0 Economic Climate
Overall economic climate in Australia had been fluctuating in recent past (Brown, 2009).
Globally economic markets had been on a constant downturn with various sectors of the
economy suffering highly. In Australia various places property markets have rallied in recent
past and reached almost its peak levels. Some researchers argue that investors due to low rates of
interests in various markets have been investing in Australian property markets especially retail
spaces. With large number of immigrants coming into the country from various other locations
there is need for retail spaces in suburbs especially where these people can meet the daily
necessities (Tice, 2015). Such dispositions have been able to attract tremendous interests from
global investors. With development of road infrastructure in the region, it will allow aligning
with national industries of opportunities or future growth with locational factors that can affect
business growth as well as growth of employment. Retail involves an evolving fast moving
consumer sector that is driven with technology, consumer tastes, social, demographic and other
factors. Retail Floor space has increased in Australia from 1.5sqm per capita in 1985 to 2.3sqm
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per capita at present. This sector depicts an annual growth rate of 1.5% at an average (Obeng-
Odoom, 2016). Such rise in retail floor spaces has been affected by real increase in income
levels. With Silverwater having continuous increase in spending income levels, retail industry
has evolved in the region and is expected to further grow with increasing in immigration
capabilities. Rising diversity in retail formats has had a growing affluence that population of
Silverwater has experienced. There have been development of shopping centers, supermarkets,
homemaker centers, outlet centers and other store formats that has led to rise in convenience.
Online shopping has also evolved in the recent period with consumer selecting products and
having them delivered at their doorsteps (Vejdean, 2015).
Interest rates in the economy are constantly dropping and there are expectations that provides
that it will drop further in the future. With fluctuating and lowered rates of interests there can be
high amounts of possibility that investors will look for avenues other than banks and depository
papers or bonds to park their funds into. Silverwater forms a part of ambitious prospects for
many investors and with Parramatta roadways further developing it can attract large pool of
funds. Inflation rates on the other hand had been constant more or less with rising trends
providing depicting limited opportunities for increasing affordability for consumers. Individual
consumers of retail property spaces had been suffering to a large extent with rising property rates
and unaffordable rent rates. Leases has also been escalating in recent periods depicting further
rising prices of goods and services.
GDP of Australia has been increasing at a minor rate in the recent period mostly stagnating.
Productivity in the country primarily in Silverwater region has been dependent on mining.
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Mining exports contribute to a sizable amount in the GDP and it has been growing by small
amounts. Silverwater offers limited service related productivity that can contribute towards GDP
as it is mostly production related of goods and various other items. Apart from mineral exports
this region can support retail services as well with its ever growing retail spaces.
Employment in Australia has been on a decline in recent period. There has been rising
unemployment in the region, as most manufacturing companies in Australia are outsourcing their
facility to low cost countries. Employment has become a major challenge in the Australian
region with rising number of people losing their jobs in automotive, telecommunication and
other sectors. However, Silverwater continues with its stable employment prospects in its
mineral extraction industry. The locality can offer immense potential for employment prospects
in the future with development of retail spaces that can provide a positive impetus in turn. with
development of retail spaces in the area it is expected to employee around 6,000 to 8,000 people
from the neighborhood population at full time retail stores.
Consumer confidence within Australia had been dipping at a constant rate with in capabilities to
cater to property rates. Affordability has gone down significantly across entire Australia but in
Silverwater such is not the situation. Silverwater have been able to support positive affordability
for its properties as against consumers income disposition. Consumer disposable incomes in the
area is almost at par with national earnings rate provided by the center.
Government Policy at the Federal level is immensely supportive of developments or growths
related to the property markets. The City of Parramatta Council also aims at developing policy
that can attract investors set up retail spaces and employ a large number of people. Government
has also been providing affordable mortgage rates for development and setting up of retail
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properties in the area. Such endeavors along with bureaucratic relaxation on tax structures have
provided large impetus to growth and development of properties in Silverwater.
World events as recent economic downturn has immensely affected the entire globe with
financial crisis. Australia too have been impacted from such financial downturns leading to a
period of economic crisis. There had been fluctuations of interests rates, inflation rates, currency
rates and market fluctuations as well that has forced a multiple number of investors into property
markets for investing. Outsourcing has been a major game changer in Australia with majority of
production and service related jobs from automobile, telecommunications and other industries
going to less developed countries. Australia has become an expensive destination for
manufacturing as well as for services. Hence, there has been a tremendous decline in
productivity of manufacturing as well as services in the country. Terrorism activities has also
affected various industries around the world and affected productivity. Australia has seen in a
change in its social structure that has impacted its business relationships with several other
countries. Silverwater being a small destination across NSW have been able to manage and
sustain its growth due to its low levels of reliance on a large number of economic activities. Its
small population has also been able to support its robust growth and development related
infrastructures.
Inter-relationships exists amongst the various macro as well as micro economic variables of the
country as well as across smaller locations as Silverwater. The location owes its development to
the connectivity it gets from with Sydney CBD and City of Parramatta. Such connectivity allows
development in the region and also its robust growth infrastructure.
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5.0 Analysis according to Property Clock
A property clock is an essential tool for analysis of a property market. It also allows experienced
property investors to purchase or sell their properties at appropriate selling or purchase time.
Every property markets around the world and also across Australia undergoes a period of
transition through a cycle and in case an investor is able to sell or invest or purchase property at
the right time then it can lead to a difference in thousands of dollars being made in their
investments. It allows tracking of the property market cycle and is based upon the well-known
stages of a property cycle which can start from a “boom”, where prices of property are highest to
“bust”, where prices in property market touches bottom of the cycle, further initiating the cycle
towards a boom period. Analysing location Silverwater in the Property Clock it can be said that
it had usually been at the bottom of the market till time of globalisation came and then the
location started to get various economic impetus.
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Figure 3: Property Clock
Source: Author
Silverwater had been functioning as a factory or warehouse facility for last 50 years. It had been
functioning as a mere facility location, but the recent transfer of the Council to City of
Parramatta and development of road infrastructure has led to development of various facility at
the location. Silverwater is now being visualized more as an individualistic location than a mere
facility space, it now has a growing population with various self-capable shops and restaurants to
cater to the needs of the location. With decent rise in population over the past few years, there
has been a steady rise in property prices in the place. Rent rates, lease rates and other property
prices of retail especially which are centrally located are continually on the rise. Though entire
Australia real-estate market have slid in the recent period with prices getting slashed at various
locations, Silverwater had been able to maintain a steady rate. Silverwater gradually is on the
verge of approaching rising market with its property prices gradually escalating with rising
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demands. The rising market prices of the retail properties have immense opportunities for sellers
of retail properties in the area to gain from lease as well as sell of properties. Rental incomes in
the area has also increased of retail spaces along with commercial space. Returns from rents have
increased tremendously in the area, which reflects that demand of properties has been rising.
Investors and property dealers can pick-up new properties in the area and hold on till prices goes
to peak levels. In cases of sellers of retail spaces they can wait till prices soar above average
levels in the area allowing for opportunities to make abnormal profits. Such periods of time
investing or selling according to Property Clock timings will allow greater profitability and gains
that can be used for other investment purposes. Though Property Clock depicts appropriate
prices for buyers, sellers and investors of retail spaces, there still remains risks from unexpected
economic or market related developments that can set deviations in property cycle. Sometimes it
reflects short-term view of the market with long-term benefits in investment property portfolio.
During periods of stagnation or downsizing period there is a possibility for generating money in
real estate.
6.0 Conclusion
Property market analysis of Silverwater reflects increased geographic opportunities in
commercial, industrial, residential and retail sectors. A diversified range of properties are getting
built with multiple land uses with built forms. Investors along with large number of developers
are currently focusing to building major warehousing space with commercial development in the
area that could provide further impetus to growth in the area. Silverwater can provide a best cost
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effective solution located at nearest Sydney point with its robust connectivity and affordable
lease prices. All these factors contribute to the development of property sector within the area.
This has also caused Silverwater to become a highly sought after location for retail space from
being a less developed location. Setting up of retail space in the area can be high profitable and
return oriented compared to other locations along with its highly structured roadways that allows
connectivity across multiple sector to transport goods from one place to another. Economically
the place is viable and can generate high amounts of economic impact on spaces getting
developed.
Reference Lists
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