Bendigo Research Report

Statistical Property Market Profile

Propertyology has conducted a study of the historical property market performance of each of Australia’s 550 local government authorities (LGAs) over a 15 year period; from 2000 – 2015.

The average annual growth rate of each LGA over the 15 years was then added with its corresponding rental yield, to calculate a total return. In the ranking of best to worst performed, Bendigo was placed 197th (in the top 36%). This ranking is higher than all of Sydney’s 43 LGAs and many of Melbourne’s 31 LGAs.

Information courtesy of Propertyology’s extensive research collateral.

While Sydney and, to a lesser extent, Melbourne, have produced solid property price growth post-GFC, most of Australia has seen very modest property price growth. Worth noting, when Melbourne’s median house price declined by 3.0 and 2.7% in 2011 and 2012, Bendigo’s median house price increased by 4.5 and 6.5%.

After significant growth of 11.8% in 2010, slower growth has since been produced (4.5% in 2011, followed by 6.5, 3.4, 4.9, 0.7 and 0.9% in 2016). Over the seven years ending 2016, Bendigo’s median house price increased by a total of 37% – this is higher than several capital cities, including Greater-Brisbane’s 14.5%.

Bendigo’s history is rich with the famous Gold Rush era of the 1850’s. More gold was extracted from this region during the nineteenth century than anywhere in Australia. Bendigo had become one the Australia’s largest cities and, as a consequence, significant investment was made in amenities to support a growing population and robust economy. The architectural heritage that still exists today is indicative of its boomtown era.

These days, Bendigo is Victoria’s third largest and the state’s most central city. Located only 150 kilometres north of Melbourne, and with quality infrastructure, Bendigo acts as a service centre to many smaller regional Victorian towns.

Economic Profile

Data from REMPLAN suggests that, as at June 2015, there were 7,642 businesses in Bendigo, employing 37,659 residents directly in the region. 2011 Census data recorded the size of Bendigo’s workforce as 45,757, suggesting that approximately 18% of residents work outside of Bendigo.

Gross Regional Product (GRP) – a measurement of size or net wealth generated by the local economy – of Bendigo was $5.797 billion for the year ending June 2015.

By employee volume, Bendigo’s biggest industries are health (15.1%), retail (12.9%), manufacturing (10.2%), construction (9.1%), and education (8.7%). With an average household age of only 38, Bendigo has a very skilled workforce.

Manufacturing is Bendigo’s most important industry, employing 4,645 people. Thales Australia is a large employer and heavy engineering company that specialises in equipment for the defence force. A variety of other manufacturers specialise in mining equipment, steel parts, biotechnology, and food manufacturing. Forests in the region also support timber manufacturing.

Rich farmland supports a strong agriculture sector with local products from several large poultry and pig farms, sheep and cattle grazing, wheat, canola and vineyards (Shiraz wine).

Tourism plays an important role in Bendigo’s economy. Attractions include the architectural buildings, gardens, and food experiences. Tourists are often attracted to Gold Rush heritage, including the museum, old gold mines, and tramways. REMPLAN data suggests that 2,351 out of Bendigo’s 37,659 jobs are supported by tourism in sectors such as restaurants, cafes, retail, cultural services, and accommodation.

To support the growing population directly and in the region, significant growth has occurred in industries such as retail, health, and education.

Financial services have also grown significantly. Bendigo and Adelaide Bank has its headquarters in Bendigo – they are one of the city’s biggest employers.

Generally speaking, Bendigo’s economy has consistently performed well when compared to Australia broadly; its unemployment rate has often been below the national average. 2013-2014 produced some challenges which were related to the then high AUD$ and the downturn of Australia’s mining boom (while mining isn’t a dominant industry, mineral deposits are still located in the region). During that time, there were reports of more job losses in smaller townships outside of the City of Bendigo. Keech, a steel castors manufacturer, was a large employer in Bendigo which became a casualty. Indicative of its resilience and economic diversity, Bendigo’s economy recovered quickly; the unemployment rate was back below the national average in 2016.

Population Trend

Greater-Bendigo’s population as at June 2015 was 108,437, making it Australia’s twentieth largest city. Bendigo is the second largest Victorian regional city (behind Geelong) and the biggest city in central Victoria.

The average annual population growth rate between 2010 and 2015 was 1.5% (the same as the national average and higher than capital cities such as Adelaide and Hobart).
Bendigo is one of Victoria’s fastest growing regional centres. “The City of Greater Bendigo population forecast for 2017 is 115,025 and is forecast to grow to 156,151 by 2036” [source: forecast.id.com.au].

Future Housing Demand

With a median house price of circa $325,000, housing is certainly more affordable than the combined capital city average of $623,000 (source: ABS).

Bendigo is on Propertyology’s list of locations identified for Asian Century potential. With (literally) billions of extra people expected to enter the middle class between now and 2030, this places enormous demand worldwide on a wide range of goods and services that this segment of the population couldn’t previously afford. Refer here for more information.

A 35% increase in Bendigo’s population is forecast between 2017 and 2036; this will maintain demand for more housing for the long-term.

Completed mid-2015, the regional rail link infrastructure project provides efficient passenger rail access to Melbourne (approximately 90 minutes). Bendigo is also northern Victoria’s rail hub for connections to smaller townships like Echuca, Swan Hill, and Eaglehawk.

With easy access to Melbourne, housing affordability, lifestyle, and quality health infrastructure, Bendigo features on Propertyology’s list of A-grade lifestyle locations, which baby-boomers from all over Australia may contemplate relocating to in coming years.

The new $630 million Bendigo Hospital is the biggest ever health project in regional Victoria. Stage One opened in January 2017 while construction on Stage Two is currently underway. This major project creates significant jobs during and post-construction.

Bendigo airport, to the north of the city, already offers a range of commercial and light aircraft operations including emergency services, flight training and recreational, corporate and charter operations. An expansion of Bendigo’s airport was first proposed in 2010, including infrastructure upgrades to cater for larger planes and increasing the number of flights to major cities. In early 2016, BMD Construction was awarded the $12.5 million tender for a major runway extension which will enable aircraft carrying up to 70 passengers. Increased airport capacity can be a draw card for additional private investment in a region’s economy, thereby generating increased demand for housing.

Recent major investment in rail, airport and hospital infrastructure solidifies Bendigo’s role as an anchor city which supports vast parts of regional Victoria for decades to come.

Important to retaining its youth and creating skills which support future economic development, Bendigo has a strong education sector. Monash University School of Rural Health, La Trobe University, Bendigo School of Nursing, and Bendigo TAFE are well-established facilities.

Bendigo-based manufacturer, Thales, has been awarded a $1.3 billion federal government contract to build armoured vehicles. Already a major employer of Bendigo, this new government contract will create more direct jobs at the plant and indirectly in the supply chain.

Over the last couple of years, there have been reports of additional discoveries of gold and mineral sands in the region. While we are not aware of any major project announcements, the upside to property investors is that Bendigo is not a mining town but there will always be potential for job creation (and housing demand) with each new announcement in future years.

Greater-Bendigo Regional Council (GBRC) has a relatively new masterplan for Bendigo (sport) Stadium that includes the development of a 4,000-seat indoor complex to attract more major events. Additional investment has also been made in a new indoor aquatic centre.

Indicative of its growing economy, GBRC has reported a greater than expected take-up of industrial land over the last decade. To help address under-supply concerns, a new industrial site containing 313 hectares has been released at Marong. Property investors might plan around Marong becoming an important employment node in future years.

With housing affordability and congestion becoming increasing concerns for Melbourne, large regional cities like Bendigo are very viable alternatives for the state’s growing population.

Here are some examples of what Propertyology has already purchased for some of our investor clients in a range of different cities.

Housing Supply

As at 2011 Census, Greater-Bendigo had 43,538 existing residential dwellings.

Historical building approval data illustrates that Bendigo has been very consistent and responsible with its housing supply. Generally speaking, between 900 and 1,100 new dwellings have been approved each year; separate local government data suggests that a similar volume is constructed each year.

With housing being so affordable and having a dominant blue-collar family demographic, approximately 90 per cent of dwellings in Bendigo are detached houses. That said, it would appear that the city is venturing into a transition period where density is increased and apartment lifestyles are encouraged.

GBRC has a planning document which contains details of their housing supply strategy to accommodate its growing population. The documents notes “…the key direction in the Strategy is for Bendigo to be a Compact City and one of the ways this is to be achieved by promoting the development of “10 Minute Neighbourhoods” where residents can access most, not necessarily all, of their daily needs such as employment, shops and schools within a 10 minute walk or cycle from where they live”.

A review of the GBRC Housing Strategy 2016 document suggests that new housing supply in recent years has been more prominent in the suburbs of Epsom, Kangaroo Flat, Golden Square, Eaglehawk, Strathfieldsaye, Huntly and Jackass Flat.

Recent Property Market Trends

Bendigo’s last significant property market growth period was in 2009-2010. While the rate of price growth since then hasn’t been as strong, it has been very steady, sustainable, and superior to most locations across Australia (including 6 out of 8 capital cities).

Property sales volumes (buyer demand) have consistently been around 1,900 per year for the last three calendar years – this is a slight reduction on the 2,100 properties sold during 2013. Approximately 15% of sales were for apartments/townhouses.

The volume of properties listed for sale (buyer supply) contracted slightly during 2016. On average, it took 67 days for houses to sell during 2016 and 79 days for apartments.

In general, the metrics used to evaluate the potential ‘pressure’ on near-term property prices suggests that the Bendigo property market is tightening slightly.

Overall, it is Propertyology’s view that property market fundamentals for Bendigo are solid. The economy is diverse and appears to offer multiple opportunities for expansion and infrastructure is of a high quality. The profile of Bendigo is comparable to capital cities, albeit on a smaller scale and with much more affordable housing. Unlike several capital cities, there is currently no suggestion of housing over-supply in the foreseeable future. One could do a lot worse than to invest in Bendigo!

Disclaimer: Statistics in this report have been obtained from reputable authorities including (but not limited to) ABS, Census, other government sources, and CoreLogic. Commentary in this report has been prepared using information from a wide range of sources including (but not limited to) industry stakeholders, government bodies, community sources, and Propertyology’s own insights. While Propertyology has taken care to ensure that statistics and other general information in this report are accurate, no guarantee is given in relation to accuracy. Economies and property markets are unpredictable; no one can predict the future. This report is general in nature and should by no means be relied upon in isolation to make personal financial decisions. It is recommended that consumers obtain independent advice from suitably qualified professionals whom have considered your personal circumstances.