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Suburb spotlight: Not all gloom and doom for Geelong
Geelong didn’t win the AFL premiership like it often does, and a spate of well established companies have been shedding hundreds of jobs over the past 12 months, but there’s no dampening the city’s enthusiasm or prospects for growth.
Property prices are holding, and new companies are establishing, such as the first stage of the disability care agency for the National Disability Insurance Scheme, in July. The state government will spend around $300 million on the scheme to employ around 300 people by 2016 plus another 150 at the regional Barwon office.
And Epworth HealthCare and Deakin University are building a 394-bed joint teaching hospital at Waurn Ponds with 1,100 effective full time positions and around 1,000 construction jobs.
So, things are certainly not all doom and gloom.
Dr Andrew Wilson, senior economist for Australian Property Monitors, describes Victoria’s second largest city as a “great survivor” well able to handle economic ups and downs. “Geelong has kept its head up, and, overall, employment prospects remain good despite concerns about manufacturing – such as the closure of Ford.
“There are lots of advantages in living there: Geelong’s the gateway to the ‘sea change’ lifestyle, it’s far less expensive that Melbourne, and those that choose to commute to Melbourne offset that against the more relaxed lifestyle there.
“Even the closure of Ford could be a strength: the government will no doubt provide assistance for the local economy and Avalon will become Melbourne’s second international airport providing jobs and possibly more manufacturing.”
“Demand for real estate in the seaside city has ‘’never looked better,” according to local Barry Plant agent Tim Palioudis. “At the moment the market is the best it has been in a long time.”
Palioudis, a director for the past three years, disagreed that job losses were a catalyst for a depressed property market. “Job losses can seem a lot worse than they really are,” he said. “People often move to different areas of a company when one part closes down, but that doesn’t show up in the headlines.”
Median prices for Geelong are around the high $300,000s for an average three-bedroom house on 600 square metres. Median unit prices are in the low-to-middle $300,000s.
Prices for those in better areas, such as Newtown – “our Toorak” – start at $600,000 for a renovated terrace house and can go well above $700,000. The age of houses is no deterrent, with 80 and 90-year-old Victorians and Edwardians attracting strong buyer interest.
Palioudis said growth areas included the old golf course in North Geelong which has been subdivided, as well as Hamlyn Heights and Herne Hill which have views of the bay.
He said Geelong had multiple demand factors, including the expansion of Deakin University, tourism, the bay, affordable housing in comparison with Melbourne and proximity to the capital.
Nick Lord, of Maxwell Collins, anticipates a limited impact from the closure of the Ford plant. He said Geelong has grown to have strong employment in areas such as education and health “to name just a few”.
He says the city has changed over the recent years with people “continuing to commute to Melbourne for work while enjoying the Geelong lifestyle”.
Ben Young, a commercial and industrial agent with Colliers International in Geelong, said these were “definitely interesting times” for retail and industrial letting in the city. “CBD retail is slow with the impact of online shopping and the after effects of the Westfield expansion around Malop Street and the market Square shopping complex,” he said.
“But the best investments are still a good tenant and a strong lease.”
Young said there had been a “strong push” in the commercial/industrial market up until the election but this had slowly abated. Most of his deals are in the 200-600 square metre bracket with a wide mix of tenants and purchasers.
The Waurn Ponds and Armstrong’s Creek growth areas were doing well, he said, “but without the volume out of Melbourne developers were expecting”.
Young said the city’s best retail strips – Pakington Street, Geelong West and High Street, Belmont – were “doing well” with leases of 50 square metres to 200 square metres proving to be solid investments. Yields are around 4.5%.
The exit of the ‘three majors’ – Ford, Alcoa and Shell – has been counteracted to a certain extent by the arrival of other employers: the expansion of Deakin University, the Epworth Hospital/Deakin University training facility at Waurn Ponds, expansion of John of God Hospital and the arrival of a vehicle wheel maker who uses carbon fibre technology.
“Coastal retail is flat, with landlords after high rates that are hard to achieve in a seasonal trading period.”
Young said this was “a good time to be buying in the Geelong CBD. I see growth, especially in retail and refurbished office markets. Rates will continue to climb.”
Hotspotting.com.au’s Terry Ryder – a big believer in the potential of regional city property markets for growth – provided they have diversified economies – says new ventures in the pipeline will counter-balance the economic impact of the closure of Ford and other potential job losses in Geelong.
These include the Regional Rail Link and the plan to make Avalon the second international airport for Melbourne.
Ryder says Geelong will continue to have “strong future as an affordable lifestyle alternative to Melbourne, with improving transport links to the city”.
Article Source: Property Observer – Forward Planning (http://www.propertyobserver.com.au/forward-planning/)