We continue our series of Australia’s ‘boomtowns’ for their potential for positive investment property outcomes to help everyday Australians make educated decisions for their financial future.
This time, we look at Bendigo.
Our property market insights are based on independent analysis of economic reports from some of Australia’s top research houses, plus local market data sourced from a wide range of industry contacts.
Located two hours North-West of Melbourne’s CBD via the Bendigo Rail Line and Calder Freeway, Bendigo is Victoria’s third largest town. With a strong agricultural history and over 105,000 inhabitants, Bendigo is a key regional centre for surrounding towns.
Diversified and varied economy
Despite its agricultural roots, Bendigo has gleaned praise in recent years from National Australia Bank’s Head of International Economics for having a diversified and varied economy. The region’s four largest industries are manufacturing, retail, health and education, with agricultural production from the Murray Plains trailing in fifth.
Manufacturing is particularly prolific, accounting for over $2.2 billion in gross regional product and employing over 7,000 people. The industry’s key employer, Thales Australia, is a major defence vehicle producer and was recently awarded a $1.3 billion manufacturing contract for the Australian Defence Force. The entirety of production is expected to occur in Bendigo and will create an additional 300 jobs for the region.
The retail industry employs over 5,500 people across 800 retail stores, and provides the majority of major shopping amenity for the greater Bendigo region’s population. Education also features prominently in the economy, courtesy of a plethora of primary and secondary schools, alongside the La Trobe University and Bendigo TAFE campuses. The higher education institutions provide services to over 16,000 students and offer over 1,000 employment opportunities.
High quality health care rounds out the town’s amenities and is slated for continued upgrading via the local council’s long-term Hospital Precinct Structure Plan. The New Bendigo Hospital was the first development commissioned under the plan and will be constructed by a LendLease-led consortium. The $630 million project will create nearly 400 hospital beds and 10 theatres following its completion in early 2017. The employment contributions are also significant, with over 750 jobs to be created during construction and 1,000 available once the hospital is operational.
State of Bendigo’s property market
Property in the region has been a stable and successful performer over the last decade, with most suburbs posting 10-year capital growth rates of 4% per annum or greater. The last twelve months in the region has been characterised by a significant increase in sales across the town’s major pockets. Despite this consistent growth and increased demand, median house prices are still very affordable and tend to sit in the early $300,000 – $400,000 bracket.
The most impressive aspect of the region’s property market is yields, which sit above 5% for most suburbs. The consistent growth over the past decade should provide investors with a sense of security, whilst increasing sales volumes and high yields suggest there is still room for price growth going forward.
The future of Bendigo is expected to be an extension of the previous decade. Diversification across multiple major industries will insulate the economy against any unforeseen shocks, whilst the continued expansion of the health and manufacturing sectors will drive growth in the region’s core competencies. This economic growth will continue to fuel the Bendigo property market, which remains affordable with legitimate scope for growth in the future.
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Image by Denison via Flickr