Spotlight on Melbourne

Hard-hit Melbourne has suffered particularly in retail and it’s unlikely that spending in stores will bounce back, cautions Peter Buckingham.

“In my view, the strong destination shopping centres like Chadstone and the other Super Regionals will come back, but not to their pre-Covid levels for a long time – if ever. People have been retrained to purchase through other ways – online, back in more local circumstances, and definitely not visiting the CBD as much.”

As a result, the shopping centres he predicts will be affected long term are the middle-sized groups, called the Major Regionals, and Regional shopping centres because they lack the breadth of retail representation likely to attract customers.

At neighbourhood and sub-regional levels the centres will stay relevant, with the anchoring supermarkets providing a focal point.

“I would be very wary of opening a new franchise in a shopping centre until we see how customer behaviour settles over the next 12 months or so as we readjust to life with Covid into the future.”

Peter suggests neighbourhood centres will continue to pop up where strong new residential developments are occurring on the outer rim of Melbourne – areas such as Wyndham, Clyde, Armstrong Creek and Melton

According to Victoria in Future, a governmental report from 2019, new suburbs in long-term growth corridors will help grow Melbourne’s population:

• Wyndham (+ 204,000)

• Casey (+182,000).

Two areas will see a fast rate of growth, the report suggests:

• Melton (4.3 percent)

• Mitchell Shire (4.5 percent).

While new development drives a lot of opportunities, many suburbs in middle suburbia are either very stable in population, or may be decreasing slightly over time, says Peter.

Outside newly developing areas, which attract young families, stable neighbourhoods that tend to house mature age residents still offer opportunities – so long as there is a demand from the locals.

“If you were to open a new business or buy into an existing business in these areas, I would be making sure the business was aimed at a mature population such as assisting elderly people etc, but not trying to service the younger populations unless there was obviously a real shortage of that type of business in the area,” says Peter.

It’s a different story, he says, when the focus turns to regional Victoria.

While there is a senior market as maturing Aussies pick suburbs like Mornington and Bellarine Peninsulas for their long-term retirement, there is also a swathe of younger families making a tree change. And that’s likely to increase with migration.

“Victoria and New South Wales have for generations been the major growth areas for migrants coming into Australia,” says Peter. “There is little doubt the federal government is planning the open up migration once we are more stable with Covid, and I would expect Victoria to take in a high share of this future immigration.

“High population growth will mean a boom in building over the next 20 years and the necessities to support a new wave of skilled immigrants coming into Victoria.

“This will create demand in many areas from building to day-to-day living requirements, and this is already being reflected in the price of housing and rentals in country areas as demand is outstripping supply.”

He believes regional Victoria will be offering ever-increasing business opportunities.

According to the Victoria in Future Report, greater Melbourne accounts for approximately 77 percent of Victoria’s population and over 85 percent of recent growth.

The report suggests that another 4 million people will be resident in the city by 2056, with Victoria’s regions predicted to rise 700,000 from 1.5 million to 2.2 million.

Of course, viewing the report through a Covid lens makes the outcome a little more opaque.

Geelong, Ballarat and Bendigo are expected to foster half of the state’s regional growth with the population in the Geelong region boosted by over 100,000 people by 2036.

There’s competition with sea/tree change local government areas such as Surf Coast, Moorabool and Baw

Baw Shires, which the report projected will grow at a faster rate than Greater Geelong.¢