Rapid demand for AI datacentres in Australia could stoke inflation, experts warn – and crowd out land for housing
Summary
Experts and government agencies in Australia warn that the rapid growth of datacentres is using up valuable industrial land, which logistics companies and housing projects also need. This competition for land may raise costs, reduce supply for housing and freight businesses, and contribute to higher inflation.Key Facts
- Transport for NSW says datacentres are taking scarce industrial land needed for freight and logistics near cities.
- Freight companies are moving out of Sydney to cheaper areas like Brisbane or Melbourne due to land shortages.
- The industrial land vacancy rate in Sydney is still low compared to international standards.
- Increased population and consumer demand will need more industrial land for logistics in Sydney.
- Datacentre industry group says supply of land and infrastructure is growing and calls for planned land use for both datacentres and logistics.
- The Australasian Supply Chain and Logistics Association warns datacentres and freight compete for the same land, impacting costs and emissions.
- The Reserve Bank of Australia warns datacentre investment may increase inflation and pressure interest rates.
- Commercial building approvals in Australia reached record levels recently due to new datacentre projects.
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