The Greater City of Geelong has been the subject of some bad press recently which could cause concern among some investors and property buyers. The speculation has stemmed from the short term impact of company closures on local economic and property market conditions. In our view, the concern is unfounded and misguided.
Geelong is a city in transition. It is evolving from a manufacturing base to a strong and expanding ‘new economy’ city with a much broader range of industries and employment opportunities than ever before. This will continue to underpin our property investment interest and activity in Geelong.
Transition is nothing new for Geelong, it’s history has included major change from one economic sector to another, be it gold mining, farming, agriculture, manufacturing or tourism.
Now Geelong is evolving in to a diverse educational, health, lifestyle, technology, services and retail centre, with a very broad range of investment, employment and industry growth opportunities. For many, the influx of new industries has never before offered such a wide range of career, life-work and job choices.
The closures of Ford, Alcoa and Shell, and the flow-on loss of jobs and economic input, has long been known and anticipated for at least the past five years. These companies have also been actively encouraging retraining and up-skilling for their workforce in anticipation of new employment opportunities as part of their closure and retrenchment obligations.
During the past 12 months there was a record 13 million tons exported from the Geelong docks, the second largest port in the region, including wheat, fertilizer and chemicals. At the same time it has also handled an ongoing and significant overload from the landlocked Melbourne Appleton and Webb Docks.
Geelong is also now the leading manufacturer of carbon fibre and a major hub for medical and technological research and development through both private companies and the Federal government’s GCEID Laboratories. The health and tertiary education sectors also continue to expand and offer new employment and study opportunities.
Avalon Airport is also the centre for a major new export contract to China while Geelong is already well placed after major upgrades of both road and rail transport to benefit commerce and commuters.
As a physical representation of Geelong’s transition and evolution, the former Ford site in Norlane has already been successfully redeveloped in to a major new retail centre including the US giant bulk retailer Costco as its anchor tenant.
EMPLOYMENT WITHIN GEELONG
New industries and employment have steadily absorbed job losses, the latest Australian Bureau of Statistics unemployment data shows Geelong has an unemployment rate of 5.8 per cent (February 2014), down significantly from 6.4 per cent (February 2013).
Geelong’s employment situation is not only better than the state of Victoria which has 6.7 per cent unemployment but also better than the national unemployment rate of 6.3 per cent.
It is also timely to remember that only 13 percent of Geelong’s workforce is within the manufacturing or related sector, with the vast majority, 87 per cent, employed in other sectors.
EMPLOYMENT NEAR GEELONG
The upgraded road, freeway and rail networks which service Geelong makes it an easy commute to Victoria’s capital city Melbourne and it’s employment opportunities.
An estimated 12,000 people commute daily between Geelong and Melbourne with expectations and forward plans for this to grow as the logistics and popularity of commuting increases.
Although Geelong and it’s surrounding areas offer continued employment opportunities, the close proximity and easy commute to Melbourne will always offer an economic safety net against any short term local issues.
Last but definitely not least, Geelong is a desirable location to live. It has a large and growing population of tertiary students, young singles and young families. As a property investor it has a solid supply of tenants and as a property purchaser it offers significant value for money compared with the more expensive and less desirable outer Melbourne suburbs.
Geelong is also a sought after bayside location, about 30 per cent of it’s boundary is coastal, including a dynamic and busy port, a beautiful city waterfront precinct as well as gentle bay and recreational surf beaches.
The city is also a gateway to the popular and growing Bellarine Peninsula and world reknown Great Ocean Road tourism region. Population growth in the Bellarine is one of the highest in the country, as it is chosen by both young and older family households in tandem with burgeoning baby-boomer retirement households.
Geelong is already Australia’s 12 largest city by population and is forecast to continue to have one of the fastest growing populations in the country. It currently has around 212,000 people and is forecast to increase by 58,000 more people by 2026. Adding to this is the population in the surrounding areas of Surf Coast, Queenscliff, Golden Plains and Colac Otway.
Geelong has a bright future and remains a targeted property market. The impact of employment losses has long been factored in to our economic and investment outlook. The transition to new industries is ongoing and is being managed extremely well.
Population growth for Geelong is forecast to average 1.5 per cent a year for the next 20 years, which far outstrips new construction forecasts and is likely to further benefit from the ongoing state-wide housing shortage. If anything, the concern or apprehension by some purchasers about the Geelong creates a window for more informed purchasers and investors who understand the investment fundamentals of Geelong remain intact.