How a $160bn hospital boom is fuelling the next property hotspots

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The Coomera Hospital development is helping drive growth in the area.

Residential construction is falling behind, but a boom in hospital infrastructure is driving growth in property markets across Australia, new research has revealed.

Hotspotting’s ‘From Wards to Wealth’ report, commissioned by Fresh Start Advisory, has delved into Australia’s hospital and medical centre projects, pinpointing the next areas to benefit from growth thanks to the infrastructure that is planned or already underway.

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It highlights Australia’s “unprecedented” level of activity in the space, with 307 hospital and medical centre projects proposed or underway nationwide that are worth at least $100 million.

Together, these projects are worth more than $160 billion, according to Fresh Start Advisory CEO Frank Ambesi, with the bigger projects creating thousands of jobs during construction and thousands more once complete, ranging from clinical staff, to cleaners and administration.

“Hospitals, as a result of the broad nature of their staff cohort, have the ability to create demand across the entire spectrum of the property market from high-end, luxury homes to affordable houses and apartments,” Mr Ambesi said. “Suburbs surrounding medical infrastructure are magnets for renters and buyers who want to live close to where they work.

“Hospital infrastructure development has a long-lasting impact on real estate markets – because while there may be thousands of jobs in the construction phase, there are more in the ongoing operational phase.

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Frankston in Victoria ranked highly on the list.

“This injects new demand for homes to buy or rent into the immediate area.”

Hotspotting founder Terry Ryder has spent decades analysing the effects of infrastructure on the values of Australian property. He was stunned at how much work was currently in the pipeline.

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“I’ve never seen this level of infrastructure development in Australia, it’s unprecedented,” Mr Ryder said.

NSW had 122 of the 307 projects either proposed or underway, while Queensland had 84 of the projects.

Queensland had the most growth potential, however, with four of the top 10 regions predicted to boom in property values.

“The top area, Coomera, is a big growth corridor with two major hospitals,” Mr Ryder said.

“In Qld, these projects are driven by need and driven by population growth.

Interstate migration from the two major capitals has been really strong. Much of that flow has gone to south east Qld.

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“Look at the Sunshine Coast University Hospital (SCUH). It was a $1.8 billion project. People were coming from other parts of Australia and the world to take these high paying specialist jobs there, so the markets at the top end had a lot of growth.

“Property prices have doubled since that hospital opened and there is significant apartment development continuing.

The designs for the $2 billion Bankstown Hospital have been unveiled.

You’ve also got that job diversity that filters down to the lower end of the property market too.”

The Coomera Public Hospital is currently under construction, with a 2032 completion date slated and a cost of $2.2 billion, while the Foxwell Private Hospital is also proposed at Coomera at a cost of $1.5 billion.

Coomera’s house median has already increased by 21 per cent over the past year.

Other Qld projects to make the top 10 were Toowoomba Hospital, Redcliffe Hospital and Bundaberg Hospital.

Victoria had 80 projects on the list, including Peninsula University Hospital, in Frankston, which was hotspot number two. This project cost $1.1 billion and was completed in January this year.

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“In Frankston, there has been a very noticeable uplift in property interest and results in that area,” Mr Ryder said. “It was all generated by this new hospital, which saw thousands of people looking for places to buy or places to rent. There were immediately big results at auctions.”

Frankston North houses have increased in value by 16 per cent year on year, while Frankston South units are up 19 per cent.

Terry Ryder has “never seen” as much infrastructure as is happening now.

Victoria also had Footscray Hospital and Melton Hospital on the top 10 list.

NSW had the Campsie, Bankstown and Camperdown Hospital precincts combining to take up one local hotspot, while South Australia had the Women’s and Children’s Hospital at Thebarton and Tasmania had the North West Regional Hospital at Burnie.

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“Residential construction is much slower, and is being affected by a shortage of tradespeople, many of whom are working on infrastructure projects,” Mr Ryder said.

“Medical infrastructure projects tend to have the greatest effect on property prices because you can get thousands of staff working at them, especially if it’s a hospital.

“That’s what sets it apart from other infrastructure. If you build a motorway, there are jobs in building it, but you don’t need people to run it.