The population in Victoria had its all-time greatest annual increase last year. According to Ethos Urban’s Tim Peggie at this morning’s William Buck Property Pulse presentation, Victoria also had the fastest growth rate in Australia at 2.13% (next best was 1.4%). The question is, can Victoria handle this growth? What does it mean for investors? And how will it change the landscape of our fair state, quite literally.
An extra 127,000 people now call Victoria their home and if trending continues, there will be an additional 1 million people in the next decade with a projected Victorian population 10.1 million people predicted in 2051!
All of this population growth will of course require housing, with an extra 2.2 million dwellings needed in the next decade in fact. Not only do we need to be able to house them, we need to feed, clean and transport them. The upgrade of the city sewerage system will keep Spencer Street a little busy over the next 12 months or so but it is much needed due to the high rise of apartment living in the CBD. Regional cities will also have the opportunity to share in the growth and new communities should have quicker traction than their past counterparts.
A recent address to the manufacturing sector by the Industry Capability Network (ICN)’s chairman on the planned projects for 2018 reiterate the state’s commitment to growth with over $10 billion to be spent on infrastructure projects, 70 of those considered strategic long term projects. These include Gippsland rail project; Renewable energy – Eastern treatment plan; Latrobe valley performing arts centre; Lockerbie main sewer; Monash medical centre expansion and upgrades; Mordialloc bypass and Western treatment plant upgrade, just to name a few.
With 44 strategic projects currently released to market and a Victorian Industry Participation Policy that ensures an assessed percentage of local jobs by local businesses, the state of Victoria looks like it has carefully considered its needs. Pre-empting it’s future requirements whilst making sure the local economy is given every opportunity to be part of the growth is a smart way of ensuring communities benefit and don’t suffer from rising costs and high unemployment.
Hence the attraction of Victoria from other state’s. This year saw the largest interstate migration compared to other states. This could be due to the increasing opportunities for workers but no doubt the cultural aspect of the world’s most liveable city is a factor that needs to be cared for and maintained.
Ultimately, this is good news for Victorian investors and puts the “bursting property bubble” rumours in the bin. Regional centres now look like having great potential for investment and growth and greater activity is being seen in traditionally industrial areas like Port Melbourne/Fishermans Bend. Old factories are being infiltrated by luxury apartment complexes and will soon look very different than 10 years ago.
With such a strong and fast changing environment, it is important to know and stay ahead of the curve so you can experience high growth opportunities. When advising our clients we look beyond just the current regulatory and taxation conditions and consider how other factors such as transport, infrastructure plans and community play a big part in looking for the next best investment.
Of course with any investment there are risks to be considered and a long term plan is always better than short term gains. However, if you are looking to invest in Victoria the messages we are seeing from the experts we work with are the outlook is still very strong.