People and economies: the performance of property markets is largely determined by their output. Here is one metric that provides a pattern of their combined contribution.
Monitoring trends within passenger volumes through each of the (roughly) 200 airports across Australia is one of various non-traditional data sets can contain some intriguing insights for housing demand.
Thoughts gathered through analysing a collection of other property market factors can be validated by the number of people moving through a township’s airport.
‘In my experience, there is a direct connection between the critical mass of passengers electing to jump aboard a tin pigeon to a particular location and business development activities, income streaming into the community from tourism and major events, and migration patterns.’
The impressive transformation of Australia’s 72nd largest township began with a combination of investment into airport infrastructure upgrades, a well-considered local government strategy with a year-round calendar of major events, and general profile building initiatives.
It created a pathway for Byron Bay becoming home to the most valuable real estate in Australia.
At the turn of this century, the $160,000 median house price of Byron was on par with Canberra, Perth and Darwin and only marginally below Melbourne ($190,000).
22-years later, this township with a population of just 36,000 people had a median house value that was higher than 8 out of 8 capital cities and each of Australia’s 400 regional townships.
By the end of 2022, Byron Bay’s $1.75 million median house value was 3-times that of a standard house in Australia’s 4th largest city, (Perth $590,000), nearly double that of Melbourne ($900,000) and Canberra ($960,000), and a hefty $0.5 million more than Sydney.
As this graphic shows, there is a correlation between the increase in airport passenger volumes and the capital growth rate in Byron.
Geelong’s Avalon airport was founded 70-years ago.
A few game-changing decisions during the decade ending 2004 played an instrumental role in the transformation of the economy of Australia’s third largest regional province.
Investing into the airport itself over the last 2-decades means that the airport now supports 1 million passengers per year.
Imagine the combined sum of revenue that passengers bring each year to the Geelong regional community of 300,000 people.
Just as important is the adjoining airport business park that has evolved. Major transport logistics and manufacturing operations at the Avalon industrial precinct is now one of the region’s biggest employment nodes.
Over the last 20 years, Geelong’s property market has outperformed 7 out of 8 capital cities.
The Western Sydney airport is not only essential for Sydney to service its growing passenger demand.
The various business parks connected to the enormous infrastructure project will become very Sydney’s western suburbs, which have been troubled by insufficient employment opportunities and traffic congestion for decades.
There were more than 50-years of stops and starts leading up to the eventual development of a second airport for Australia’s biggest city.
Conversely, within just 3-years, a major airport was proposed, approved and fully built in Toowoomba, Australia’s second largest inland city.
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Airline access helps to untap potential
Right across Australia, dozens of towns and cities were beneficiaries of major investment into airport developments from the mid-1980s to 2000.
Subsequent infrastructure upgrades that supported increased passenger volumes (runway expansions) and improved passenger comfort (terminal facilities and carparking) underpinned a spectacular 400 percent increase in Australia’s total airport passenger volumes from 1990 (40 million) to directly prior to the global health pandemic (160 million).
‘The more revenue that is spent at hotels, on dining, entertainment and retail outlets by people who disembark from tin pigeons the greater the financial capacity of those who live in the community to buy real estate.’
Another great example is the absolutely stunning regional city of Launceston. From 300,000 passengers in 1990 to 1.4 million in 2019, Launceston has grown to become Australia’s 13th busiest airport.
The airport has played a significant role in the city playing host to a suite of major events, growth in tourism and economic growth more broadly.
It is no coincidence that Launceston’s property market has been one of Australia’s strongest since 2017.
The enormous pipeline of major stadium infrastructure investment will lean significantly benefit a number of airports across Australia.
One of the most important industries to the national economy, mining, was originally enabled by airport developments in regional provinces with highly valuable natural resources.
That includes Rockhampton, Mackay, Moranbah, Mount Isa, Port Hedland, Kalgoorlie, Broken Hill and Olympic Dam.
A significant portion of the more than 1 million passengers through Newcastle, Townsville, Darwin and Canberra airports each year are directly or indirectly involved in the defence force. These airports are critical to Australia’s national security.
Whether for important business development activities or recreational purposes, direct capital city flights to popular regional townships such as Dubbo, Orange, Armidale, Hervey Bay and Wagga Wagga underpin their diverse economies and incredibly understated property markets.
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The leading indicators
Arguably the most dependable property market in all of Australia, Bendigo has recently benefitted from an airport upgrade.
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Albury, which boasts one of the most enviable combinations of lifestyle quality and economic vibrancy in the entire country, is also enjoying an increase in weekly flights.
Infrastructure investment in the form of major terminal and runway expansions and the introduction of international flights will see Hobart’s airport capacity double over the next few years.
The Townsville airport already contributes approximately $400 million per year to the economy of Australia’s 13th largest city and has a 20-year airport expansion plan.
Sunshine Coast, Busselton and Brisbane airports also have expansion plans.
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