Melbourne features very little in my current thinking about property hotspots in Victoria. Strong regional cities dominate the mindset.
Right now Melbourne is a good place to be near but not in. The strongest places in Victoria are all cities in their own right but close enough to the capital to be commuter cities.
The B cities have a lot in common: gold rush histories, strong local economies with ample diversity, proactive councils, plenty of infrastructure development, strong business communities, prosperous tourism industries, lots of real estate investment and generous supplies of affordable dwellings.
Both have major redevelopments of their hospitals in prospect. Both have significant education sectors, and both have manufacturing businesses that are defying the national trend of downturn in that sector. New roads are being built and airports are being upgraded. National retailers are expanding in both places. There’s even impact from the resources sector, with gold mining undergoing a revival with the benefit of modern technology.
Both have significant numbers of residents who commute to work in Melbourne. Both will be enhanced by the $5 billion Regional Rail Link, which will shorten the gap (in travelling times) between them and the state capital.
They have the strong appeal for investors that Melbourne currently lacks. I can see plenty of growth drivers in Ballarat and Bendigo, whereas few are apparent in oversupplied Melbourne.
Many things happen in these regional cities than you might expect to find in the big capital cities. Ballarat, for example, is developing its IT sector to a scale of national significance through the University of Ballarat, with strong involvement from IBM, which has its primary regional delivery centre in Australia in Ballarat. The new trains needed for Melbourne’s rail system are being built in Ballarat.
Bendigo, which has the only provincial stock exchange in Australia, is the headquarters for Bendigo Bank, which has retail branches around Australia. Bendigo-based Thales builds vehicles for the Australian Defence Force, while another local business Australian Defence Apparel supplies combat uniforms and other equipment.
Big property developments are happening in both places. A new suburb covering 750 hectares, to be known as Lucas, is happening in Ballarat, as well as the evolving Ballarat West Growth Area. In Bendigo a major master-planned development called Evergreen Waters is under way.
If I can isolate one “big kicker” item from among the many drivers of future growth in the B cities, it's the $5 billion Regional Rail Link, which is now well under construction.
It will provide a direct link for passengers travelling from Ballarat, Bendigo and Geelong into Southern Cross Station in Melbourne. This will avoid the current bottleneck with Melbourne commuter trains.
The project is expected to deliver time savings, increase tourism to the regional cities and make living there more attractive. Trains from Geelong, Ballarat and Bendigo will no longer stop at North Melbourne station once the link is completed in 2016.
Regional Rail Link Authority chief operating officer Allen Garner says the project is like building a new four-lane freeway into Melbourne.
“From a sustainability point of view it’s much better than building freeways but it does enable people to choose lifestyles and move more out of the city,” he says. “I think there are great growth opportunities for regional centres.”
With all that in the background, the bonus is that you can readily buy houses in the $200,000s in both the B cities.