Australia is one of the most urbanised countries in the world with 67% of our population living in a capital city today. However, as house prices in major cities like Sydney and Melbourne become more expensive and industry seeks cheaper bases of operation – bringing hundreds of jobs with them, many Australians are embracing smaller cities as a great place to live and work.
Most of these small cities are formerly regional industrial hubs close to our capitals that have transformed into attractive lifestyle centres offering more affordable housing, employment opportunities, a strong sense of community and a more relaxed way of life.
New transport and roads infrastructure has brought these regional cities closer to the capitals, enabling locals to commute and earn a big city income while enjoying a small city lifestyle that includes far more affordable housing. Telecommuting is also enabling more people to base themselves in lifestyle locations.
As revealed in our McGrath Report 2018, Wollongong and Newcastle in NSW, Geelong and Ballarat in Victoria and Toowoomba in Queensland, are among the most important key regional markets to have transformed themselves over the past 20 years from old industry satellite towns to attractive regional cities.
According to the Victorian Government’s Regional Network Development Plan, 40% of all regional growth to 2031 will be in the cities of Geelong, Bendigo and Ballarat.
Median house price $720K, up 15.2% over the 12 months ending June 2017
Located 80km south of Sydney, Wollongong was once a blue collar industrial town but today it is a coastal lifestyle centre known for its pristine beaches, leading university and arguably the most appealing commuter housing market for families priced out of Sydney.
It has always been a major export location for coal and other goods and also home to steel manufacturing but the city is shedding its industrial reputation. Key sectors now include IT, business service and finance, education and research, health and tourism.
Wollongong’s population increased by 10.5% over the decade to 2016, the latest Census shows.
The University of Wollongong is one of Australia’s top ranked universities, employing 1,000 people full time and educating 23,000 students per year – 41% of which are international students. Its Master Plan 2016-2036 will elevate the university’s role in Wollongong’s economy and provide an even bigger hub of employment.
Price growth is being largely driven by Sydney families, local upgraders and a move to encourage immigration outside capital cities through the Regional Sponsored Migration Scheme.
In the 2017 NSW state budget, $15M was allocated towards planning a 35km extension of the F6 through southern Sydney to Waterfall to relieve congestion and provide a faster journey for Wollongong to Sydney commuters.
Median house price $570K, up 11.8% over the 12 months ending June 2017
About 160km north of Sydney, the population of Newcastle was 155,411 at the last Census and the City of Newcastle predicts it to exceed 180,000 people by 2036.
Newcastle has been undergoing a construction boom, as evidenced by the massive redevelopment of the old Royal Newcastle Hospital site into the $100M Arena Apartments due for completion this year.
The value of construction approvals topped $1B for the first time in FY17, according to Newcastle Council. Among the approved projects were the Verve Residences, two 19-storey towers with 197 dwellings; a new hotel on King Street; and the $88M redevelopment of Westfield Kotara.
Major recent projects include the largest regional courthouse in NSW, a new $95M city campus for Newcastle University, the Hunter Expressway and the $500M light rail and transport interchange expected to be completed in 2019.
While Darby Street in Cooks Hill and Beaumont Street in Hamilton remain the city’s eat streets, great restaurants are popping up everywhere. A former Tooheys warehouse is now a craft beer café, The Grain Store; and an old bank is now home to fashionable drink spot, Reserve Wine Bar.
Median house price $325K, up 4.8% over the 12 months ending June 2017.
The historic city of Ballarat, located 105km north west of Melbourne and famous for being the heart of Victoria’s gold rush, was previously a manufacturing region. Today, more people are working in professional service with hospitals the biggest employer followed by school education and cafés and restaurants.
Ballarat is one of Australia’s fastest growing inland cities with 101,686 residents today and a projected population of 145,197 people by 2036, which is massive growth of about 36%.
Ballarat is still home to McCain Foods, which announced a $57M revitalisation of its potato plant in June 2017; as well as Mars Incorporated, which employs more than 2,000 people; and train builder Alstom Australia.
In its last budget, the Victorian Government announced it would move 600 jobs from eight departments to Ballarat. Construction is expected to start on the GovHub office at the redeveloped Civic Hall site in 2018.
Steeped in gold rush heritage, Ballarat provides many weekend family activities at historical museums such as Sovereign Hill and Kryal Castle. Lake Wendouree offers many attractions and recreational activities including the Ballarat Botanical Gardens, Steve Moneghetti walking and running track, cycling trails, bird watching, a playground and barbecue facilities.
Median house price $445K, up 2.4% over the 12 months ending June 2017.
With its spectacular beaches and cosmopolitan shopping precincts, Geelong is increasingly luring Melburnians to the coast. About 75km south west of Melbourne, Geelong has had astounding population growth of 18% over the past decade alone.
Factors driving this growth include the relocation of government workers from Melbourne and the revitalisation of the CBD with new eateries, bars and retail outlets. Corio Street’s former wool exchange is now an entertainment complex with a good roster of Australian bands.
Geelong was once amongst Australia’s largest manufacturing centres but this has changed significantly with the closure of Shell’s Corio oil refinery, Ford’s Norlane plant and Alcoa’s Point Henry aluminium smelter. In their place, service industries including health and education have grown, with Deakin University climbing up the world rankings.
WorkSafe Victoria’s headquarters are coming to Geelong, with more than 700 workers to be based in a new building on top of the 90-year-old Dalgety and Co. Ltd in the CBD from 2018. A new headquarters for the National Disability Insurance Agency will also be established in Geelong, employing 450 people.
Nearby Avalon Airport is seeking to expand its domestic operations and commence international flights with Federal Government backing, creating more jobs and business opportunities in the region.
Median house price $375K, up 2.2% over the 12 months ending June 2017
Toowoomba, located 125km west of Brisbane, has developed into a strong and thriving regional centre of Queensland where the local population has surged over the past decade from 90,199 to 160,779 people, the latest Census shows.
Known for its beautiful parks and gardens (the city hosts a Carnival of Flowers every September), Toowoomba is being further revitalised by a new airport and new roads diverting big trucks away from the city centre.
There are several multi-million dollar infrastructure projects in the works, including the 41km Second Range Crossing bypass due in 2018; and the Inland Rail direct freight link from Brisbane to Melbourne expected by 2020. Construction on the $235M InterlinkSQ rail transfer centre will also start in 2017.
Accessibility to the area has been improved by the 2014 opening of Brisbane West Wellcamp Airport, about 15km from the Toowoomba CBD. The airport provides exciting business opportunities, with the $35M Integrated Milk Project being built at the adjoining Wellcamp Business Park to take milk products directly to Asia.
The Toowoomba region is also on the way to becoming Australia’s solar energy capital. A $200M solar project with the potential to generate about 100MW of electricity – powering 32,000 homes, will be built at Yarranlea in 2018. A 100,000-panel solar farm near Oakey is expected in 2018 and the $1B Bulli Creek Solar Farm near Millmerran is expected by 2025.
If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.