Last week’s closure of Ford’s casting plant made Geelong property investors nervous — especially on the heels of job-losses at Alcoa and Qantas.
The loss of manufacturing jobs from industrial heartlands can lead to ‘rust belt’ regions, characterised by declining industry, populations and economic activity. Rust belt effects were predicted for Geelong and also Adelaide, where Holden is on the brink of closing, and other steelworks, mining and meatworks plants have already shut down.
But our analysis suggests the impacts on Victoria’s second city have been overstated. Despite the naysaying, Geelong is experiencing a post-industrial renaissance as it transitions from blue-to white-collar industry.
Large government agencies have relocated to Geelong, and small to medium businesses are reportedly thriving. Deakin University is leading technology innovation, manufacturing is growing in the broader Barwon region, and heavy investment in infrastructure is supporting Geelong’s growing population. By comparison, Adelaide’s population is stalling, and unemployment there remains significantly higher.
This vindicates our prediction that, unlike Adelaide, Geelong would remain a resilient, autonomous hub of growing professional classes and solid investment potential. Its proximity to Melbourne, growing job markets and appealing waterside location continue to attract professional owner-occupiers. As parts of the city gentrify, areas of pre-gentrified Geelong remain undervalued, offering good yields and capital growth potential.
Until next week,