Melbourne has been on an upward trajectory longer than most, including myself, thought it would sustain. However, with closer inspection, Victoria as a whole has some strong fundamentals going for it.
We’ve recently begun work on a series of Victorian reports covering regions such as Geelong, Ballarat, Melbourne West, Melbourne North and Melbourne East among others and some interesting themes are at play here.
The State Government is spending $7 billion on transport infrastructure – that’s 3.4 billion more than last year. With five times the density of the rest of the country, Victoria is in a unique position. While Melbourne is voted Most Liveable City in the World for the sixth time in a row, the city struggles to maintain that status with such a growing demand on its infrastructure. The Liveable label has certainly fuelled recent population growth of staggering proportions; some 90,000 people move to Melbourne every year (it was 91,600 in 2014-15). Transport infrastructure is at breaking point and the State Government is taking serious action to maintain its highly-rated living standard by spending up big on infrastructure.
Some of the key projects in Melbourne with big ticket price tags include:
- Western Distributor – $5.5 billion
- Metro Tunnel – $10.9 billion
- Port of Melbourne upgrades – $1.6 billion
But the city can’t handle all this growth on its own and luckily it doesn’t have to. The satellite regional centres of Geelong, Bendigo and Ballarat are instrumental in Victoria’s plans to manage growth over the long term. All three cities are receiving a reasonable share of the State’s funds to build infrastructure that will entice people to these regional centres with the promise of affordable housing and a high standard of living. Our recent report on Ballarat certainly illustrates how significant their role is in planning for growth. The forecast population growth for Ballarat supports the theory that the push to encourage people to these cities is working. Growth of 1.9%pa is forecast for the city just 120km to the west of Melbourne compared with 1.6%pa for the State.
Geelong is much the same. Both cities are in the process of transitioning away from car manufacturing as Ford Australia closes operations. But with proactive councils and help from the State and Federal Governments in the way of innovative manufacturing grants, both Ballarat and Geelong seem to be handling the transition better than expected. A good indication that Geelong in particular, is past the pain point is in its unemployment rate. From a high of 8.4% in 2015, the unemployment rate (5.5%) is now below the State’s (5.6%).
On the housing front, population growth remains strong in Geelong as well (2.01% in 2015) and parcels of land close to infrastructure and even the city CBDs are being released in both places in order to attract new residents with affordable living options in master-planned communities. Affordability is the key here. Land is much, much cheaper than in Melbourne. In fact, Ballarat is close to 1/3 of the median price for Melbourne. That’s a lot more house for your dollar. The question is, will it stay affordable? Ballarat and Geelong Councils both seem to have a pretty good handle on the supply of new housing stock, ensuring approvals keep closely in line with population growth. A constant release of new stock keeps price growth to a minimum of course, but both regions seem to be growing steadily and for the most part, the days of double digit growth are done. You could do worse than investing in Victoria’s satellite cities that will continue to grow strongly in size and clout.
Download a sample report on any of our regions throughout Victoria or Queensland.