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2016 boom suburb predictions

By Jack Needham
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A major shift in government policy could be about to heavily influence property values in the new year, according to two experts.

Two leading real estate identities have speculated that values in Sydney suburbs are set to be affected by the Baird government’s pending council amalgamations.

Douglas Driscoll, CEO of Starr Real Estate, said the council mergers could become one of the biggest real estate market influencers of 2016.

He said that some areas, such as Botany Bay, are primed to pick up in value as a result of prestige by association.

The City of Botany Bay, which contains Botany, is widely expected to be amalgamated with Randwick Council and Waverley Council – which contain suburbs such as Bondi, Bronte, Clovelly, Coogee and Vaucluse.

“Look at somewhere like Botany for example, all of a sudden it could become part of an enlarged eastern suburbs council. Of course, it’s going to become a lot more desirable and expensive,” Mr Driscoll said. 

Philippe Brach, CEO of Multifocus Property, is in favour of amalgamating Sydney councils and advises investors to factor any potential amalgamations into their future purchase decisions.

“If they’re putting Vaucluse and Botany Bay together, I would buy in Botany Bay for sure. It will definitely create opportunities for investors to buy in areas that will get a lift from being amalgamated with better suburbs,” Mr Brach said.

“By amalgamating you get a better back office, and a better general manager,” he explained.

Investors need only to look at existing examples in Australia to see the benefit of larger councils, according to Mr Brach.

“If you look at the larger councils [in Sydney] such as the Sutherland Shire Council for instance, which is extremely well managed, it’s one of the biggest councils in NSW. So I’m all for amalgamations for that particular reason.”

Aside from matters of prestige, having a smaller number of Local Government Areas enhances infrastructure development, according to Mr Brach.

“The Brisbane City Council is massive, and so they get things done. Look at the infrastructure they’ve got. I can drive from the airport in Brisbane, all the way down to the south of Brisbane without actually hitting one traffic light, because they’ve got that network of roads and tunnels,” he said.

Mr Brach added: “I’m sure it will have an impact, because once you start having to deal with less councils when you want to do major infrastructure projects, things get easier and you can actually get things done. At the moment, if you want to an infrastructure project in Sydney, you have to deal with almost 40 councils, which is a nightmare.”

Botany Bay has so far resisted the Randwick and Waverley merger proposal, which was given the tick by the recent Fit for the Future IPART assessment.

However, with only seven existing Sydney councils being deemed as fit for the future in their current standalone capacity, members of local government and state parliament have expressed suspicions that forced amalgamations may take place in 2016.

Apart from Randwick and Waverley, the Auburn, Burwood and the City of Canada Bay councils have agreed to amalgamate.

The state government is yet to officially outline the next step in the Fit for the Future process, although it has promised to do so before the end of the year.

Sydney has prior history of forced council amalgamations. In 2004, the City of Sydney absorbed the City of South Sydney, which included suburbs such as Surry Hills, Potts Point and Elizabeth Bay.

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