Geelong property prices remain steady as housing becomes backbone of economy

Article written by Kirsten Robb and published on Domain
From gold-era town, to manufacturing capital and now aspiring innovation hub, Geelong is a place that knows how to rebound and reinvent itself.

In recent years, the bad news headlines seemed to keep coming: big employer after big employer quit the city and laid off staff. Then the council was sacked.

But amid the turmoil, Geelong’s housing market has stood firm.

The people of Geelong haven’t given up on the city and each year more Melburnians, interstate residents and internationals migrate to the gateway of the Bellarine Peninsula. The population is expected to grow from 225,000 to 300,000 by 2031.

House prices are growing too, spurred on in part by Melbourne buyers looking west for affordability.

Domain Group data shows a 12.5 per cent house price growth in the past five years, amid a period that saw unemployment jump well above the Victorian average.

Signs of improvement

Despite the years of economic flux, key indicators appear to be improving. Jobs have rebounded, with the unemployment rate bouncing to 5.2 per cent in March this year compared to 8.7 per cent in March last year. Nearly 20,000 jobs created over between March 2015-2016, according to the Australian Bureau of Statistics.

Education, health and construction have replaced manufacturing, and technology start-ups and government agencies have moved in.

Geelong Chamber of Commerce chief executive Bernadette Uzelac said the resilience of house prices in Geelong reflected a growing confidence and optimism about the future.

“Geelong has positioned itself as a viable alternative to Melbourne with a breadth and depth of career opportunities,” she said.

Both state and federal governments have looked to evolve the city for a number of years, because local economies “don’t just fall off a cliff”, said Domain Group chief economist Andrew Wilson.

“There’s no doubt governments have spent money on transitioning workers into something else, and what we are seeing now is an improved economy,” Dr Wilson said.

And the city saw more promises made this week with a campaign-trail visit by Prime Minister Malcolm Turnbull, including a $5 million pledge for a community hospice.

Geelong’s important marginal seat of Corangamite is a key battle ground for the July federal election and is in the crosshairs of both the Coalition and Labor.

Residents have also leveraged an ability to work remotely or travel with relative ease to Melbourne. VicRoads data shows 25,000 cars pass through Princes Freeway in Lara every day, while more than 4.2 million people took the Geelong V/Line during 2014-2015. Patronage on the line grew 22.2 per cent over five years — the biggest increase in Victoria.

Deakin University property professor Richard Reed said the direct link between Geelong and the Melbourne city centre helped cushion property prices in the city, with many households not employed in the local economy at all.

“The other important aspect is the affordability of Geelong housing compared to Melbourne housing, which ensures the commute each day is financially viable,” Professor Reed said.

An affordable alternative

Ms Leake said price was certainly at the top of her list when she and her husband began house-hunters in Geelong.
“Like most people our age, we could not have been able to afford what what we wanted in Melbourne,” Ms Leake said. “We’re close to the waterfront, we’re walking distance to everything — that’s a lifestyle we couldn’t afford to replicate there.”

Buyers’ advocate Cate Bakos, who helped the Leake family buy their weatherboard cottage, said Melbourne first home buyers were turning to Geelong because they could still buy in inner Geelong for less than $600,000 or $500,000 in the suburbs.

“At auctions, my competition is Melbourne buyers who are upgrading; they own a unit in Prahran but they find they can get a family home in Geelong for the same price,” said Ms Bakos.

And Geelong is itself spreading outwards. New developments are springing up on the city fringes and both building activity and new home numbers are up.

Committee for Geelong chief executive Rebecca Casson said Geelong should not be afraid of the city’s burgeoning boundaries.

“The identity of the city has been here for years and there should be no fear that growth means a loss of that identity,” she said.

After the sacking of the Greater Geelong City Council, a Commission of Inquiry into the council highlighted a “lack of shared longer-term vision” for Geelong, which Ms Casson says the city must address with priority.

“Geelong is on the cusp of this transformation,” she said. “If you look at the history of Geelong, what happens is it becomes better each time, it reinvents itself, because there is always optimism and courage.”

It is perhaps little wonder the anthem for the Geelong footy club — a team intrinsically linked with the city’s identity — ends with the words “stand up and fight like hell”.

It’s a not so subtle reminder that Geelong is a city with resilience and tenacity at its heart.