Finding tomorrow’s hot property, TODAY Location Report

A joint publication of Reventon and Ryder Property Research

BALLARAT Regional Victoria

April 2020

For more information contact: Reventon 1300 039 376 Level 9,420 St Kilda Road, Melbourne VIC 3004 [email protected] www.reventon.com.au Regional Victoria

Highlights • Regional centre for: manufacturing, • $950 million Stockyard Hill wind farm agriculture, education, tourism, • Major transport upgrades health services, retailing and mining. • $460 million hospital upgrade • Ballarat West Growth Zone • $1.5 billion Rokewood wind farm

Suburb - houses Typical prices Ballarat East $360,000 Ballarat North $395,000 $500,000 Wendouree $330,000

Ballarat was recently identified as the fastest-growing inland city in by the Australian Bureau of Statistics and, according to some forecasters, can expect more strong price growth through to 2022. Adding to its appeal, Ballarat has also been named as one of Australia’s most liveable regional cities. Proximity to the state capital and housing affordability are the key factors behind Ballarat’s popularity with investors and home-buyers seeking alternatives to Melbourne. First home-buyers in particular are making their presence felt. Ballarat is one of Australia’s strongest regional cities. It thrives through a diverse economy, low unemployment, a growing population and proximity to Melbourne, making it a popular commuter city. With the State and Federal Governments planning to spend billions on upgrading road and rail links to Ballarat, including improved connections to Melbourne airport, commuting will become easier. Several construction projects like GovHub, the hospital expansion, the train precinct and new land estates are drawing in tradesmen who need accommodation, so vacancies are low. Ballarat suburbs have median house prices ranging from around $300,000 to $500,000, emphasising the city’s appeal as an affordable lifestyle alternative to Melbourne - and one where the property market has become increasingly busy.

BALLARAT Regional Victoria 2 Economy and Amenities The combination of affordable housing and regular rail links to Melbourne are key factors in the growth of Ballarat’s population. Location A fast train service started in 2006, cutting the journey from Ballarat to Melbourne to about 60 minutes • 110km north-west of Melbourne (faster than driving via the Western Highway). The completion of the Regional Rail Link in 2015 has • Strategic position amid major freight, brought further improvements. tourism and commuter transport Ballarat is seen as an emerging “knowledge” city routes – a regional hub for data processing services and • Four main highways – the Western, research & development. Federation University the Midland, the Glenelg and the Australia (formerly the University of Ballarat) and Sunraysia – connect to Melbourne, the Greenhill Enterprise Centre are both associated Adelaide, Geelong, Bendigo, Mildura with the development of IT. and Portland Health care and social assistance also have a strong • LGA: bearing on the local economy. Between 2007 and 2014, this sector experienced Ballarat’s largest increase in the number of jobs with 1,844, followed by accommodation and food services (999), education and training (886) and construction (619), according to the City of Ballarat. As at the 2016 Census, the health care sector employed 7,500 and the education sector 5,000. The retail sector also employed 5,000. Industrial estates in Ballarat West, numerous residential land estates, along with several infrastructure developments in the health and retail Population sectors contribute to a healthy construction industry • Population (2016 Census): 101,700 which employs 4,000. • Projected population by 2040: 200,000 - Education and Health • One of Australia’s largest inland Federation University is regional Victoria’s largest cities. institution with three campuses in Ballarat where it Source: ABS and Ballarat City Council has 1,500 staff and 25,000 students. The Ballarat Technology Park employs 1,500 and contributes $100 million to the regional economy each year. Ballarat is western Victoria’s largest provider of health care, delivering services for a region of 250,000 people. As retirees from regional Victoria move to Ballarat for aged health care, the number employed in the Ballarat is the fastest growing health industry is expected to rise to 10,300 by 2031. inland city in Australia; it grew 1.84% in the last year - Manufacturing Australian Bureau of Statistics, September 2019 There are 200 manufacturing businesses in the region, many of which are linked to the agricultural sector.

BALLARAT Regional Victoria 3 Employment in manufacturing is generated by a “The relative affordability of Ballarat and Bendigo group of major operators which includes Masterfoods versus Melbourne has made those areas popular Australasia, Haymes Paints, MaxiTRANS (Australia’s with investors,” Wiltshire says. largest supplier of road transport trailers), McCain Properties under $400,000 are attractive to the Foods and Gekko Systems – manufacturers of majority of buyers, whether they’re investors or first- mining equipment. home buyers, according to Ballarat independent real Ballarat manufacturer Alstom builds trains for estate agents Doepel Lilley Taylor. Melbourne’s rail system and regularly manages At least 10 Ballarat suburbs fit this category, contracts worth $100 million. including Wendouree (median house price $330,000) Recent contracts with Gekko Systems and and Ballarat East ($360,000). MaxiTRANS have been be valued at $70 million and Ballarat continues to attract large numbers of $60 million respectively. buyers out of Melbourne, drawn by its affordability - Tourism and better rental yields. Owner-occupier buyers are increasing whereas Tourism is a key industry, the Goldfields being a previously investors were more prevalent, says Mark major drawcard to not only domestic visitors, but Nunn, Buxton Real Estate. “The train line is getting also Chinese tourists tracing their ancestors in the faster, our schools really are elite and we’ve got gold mines. great medical facilities in this town,” he says. Ballarat still has a functional gold mining industry. Alfredton, Sebastapol and Wendouree are the busiest The Ballarat Gold Mine, operated by Castlemaine suburbs, recording over 200 annual sales each. Goldfields, employs around 200. Ballarat also appeals for its growth potential, driven Sovereign Hill, an open-air museum and historical by the strength and diversity of the local economy. park, has regularly received tourism accolades and is in the Tourism Victoria hall of fame for three Some examples of projects driving the economy consecutive wins. are the redevelopment of the train station precinct; the proposed Government Hub in the centre; a Property Profile new shopping centre at Delacombe; the hospital expansion; and several new land estates. Ballarat has established itself as the strongest housing market in the state over the last 18 months, These projects are attracting tradesmen and says the Housing Industry of Australia. workers – all needing accommodation – to Ballarat, thus driving down vacancies. Population growth since 2007 has been twice as fast as the preceding decade, resulting in increases to The increase in demand has been driving up rents. property prices and building approvals, it says. Data from SQM Research shows the median house rent of $350 a week in postcode 3350 is 18% higher In 2020 Ballarat was named by RMIT University as than three years ago. one of Australia’s most liveable regional cities. It was ranked No.1 for access to public transport and Investors can expect a median rent of $310 per week public open space and was in the top five for access in Sebastapol to deliver a return of 5.3%. to supermarkets, local employment and services, The median rent in Canadian is a little higher, $330, and housing affordability. providing a median yield of 4.5%, while rental income This kind of appeal has attracted both investors of $360 a week in Delacombe will yield 4.8%. and home-buyers from Melbourne, which has given major impetus to the Ballarat property market. - First Home Buyers Being within commuting distance of Melbourne In the past 12 months, six suburbs have had annual is another of Ballarat’s lures, especially for first growth in their median prices of 10% or more – -home buyers who do not have to pay stamp duty on Ballarat Central (19%), Black Hill (18%), Ballarat (13%), Alfredton (11%), Delacombe and Mt Pleasant properties priced below $600,000. (both 10%). Other suburbs have grown 7-9%. In FY2019, building approvals across the Ballarat Domain economist Trent Wiltshire says Ballarat and LGA were the highest for over a decade, shows data Bendigo have had price growth almost as fast as from the ABS. Around 1,200 houses were approved Melbourne’s over the past decade. compared to an average of 980 for the past five years.

BALLARAT Regional Victoria 4 Of these, 750 homes were bought by FHBs between Phil White, CEO of QBE Lenders’ Mortgage Insurance, January and November. These were largely says: “Demand is likely to continue to come from concentrated around postcode 3350, taking in most first-home buyers from Melbourne taking advantage of central Ballarat, Lucas and Alfredton, where 437 of the stamp duty concessions on offer. The local sales and new buildings were recorded. economy is also reasonably strong and tight vacancy Postcode 3358, which encompasses the rapidly rates are likely to support investor demand”. developing Winter Valley, saw 124 FHBs move in. - Vacancy Rates The surge in interest in the Ballarat market has With a shortage of supply and growing demand of boosted the long-term capital growth averages. accommodation for workers coming to town to work Over the last decade both Soldiers Hill and Black on infrastructure projects, Ballarat has one of the Hill have each averaged 8% per year while Ballarat, lowest regional vacancy rates in Victoria. Ballarat Central, Bunninyong and Golden Point have Vacancies have been below 3% for the last five all averaged 7% per year. years, according to SQM Research. The vacancy Strong growth is expected to continue with research rate in Bunninyong is currently 2.4%; vacancies in from QBE stating that the median house price in Alfredton, Ballarat, Canadian, Mt Clear, Delacombe, Ballarat will increase 8% by 2022. Sebastopol and Wendouree are all below 2.0%.

The Ballarat property market can be summarised as follows:-

Sales 1-year Growth Median Suburb Median Houses Houses Growth Average Yield Alfredton 219 $470,000 11 % 5 % 4.4 % Ballarat 51 $450,000 13 % 7 % 3.5 % Ballarat Central 132 $515,000 19 % 7 % 3.6 % Ballarat East 120 $360,000 7 % 6 % 4.6 % Ballarat North 73 $395,000 3 % 6 % 4.4 % Black Hill 38 $485,000 18 % 8 % 3.4 % Buninyong 50 $500,000 6 % 7 % 4.2 % Canadian 68 $380,000 8 % 4 % 4.5 % Delacombe 90 $390,000 10 % 4 % 4.8 % Golden Point 53 $370,000 6 % 7 % 4.4 % Mt Clear 72 $395,000 5 % 5 % 4.7 % Mt Pleasant 42 $360,000 10 % 6 % 4.9 % Redan 54 $345,000 7 % 6 % 4.5 % Sebastopol 226 $305,000 9 % 4 % 5.3 % Soldiers Hill 68 $480,000 9 % 8 % 3.5 % Wendouree 220 $330,000 7 % 6 % 4.7 % Winter Valley 56 $425,000 7 % 3 % 4.9 % Source: CoreLogic – “No. of sales” is the number of house sales over 12 mths; “Growth ave.” is the average annual growth in median house prices over 10 yrs. “Snr”: statistically not reliable

BALLARAT Regional Victoria 5 BALLARAT VACANCY RATES

Postcode Suburb Vacancy rate

3350 Alfredton, Ballarat , Canadian, Mt Clear 1.9 % 3357 Buninyong 2.4 % 3356 Delacombe, Sebastopol 1.2 % 3355 Wendouree 1.1 %

Source: sqmresearch.com.au

Future Prospects Ballarat stands out among Australia’s regional centres as a place with a high level of development CORE INFLUENCES of infrastructure and property projects. Transport Infrastructure Ballarat’s proximity to Melbourne makes it an attractive alternative to city living and city property Government Policy prices, especially now the Regional Rail Link has made Ballarat within easier commuting distance of Boom Towns Melbourne jobs nodes. This was confirmed in Deloitte Access Economics’ September 2018 It’s Happening, Victoria report. The research stated Ballarat was a better option than In addition, the State Government plans to spend much of Melbourne’s high-density living or urban $130 million untangling freight and passenger rail fringe areas. Some of the factors behind Ballarat’s lines around Central Ballarat. popularity relate to health and education along with its connections to critical infrastructure such as V/Line began to introduce extra trains in 2017, while rail, roads, internet and mobile coverage. $280 million is being invested in 27 new V/Locity carriages to allow space for 2,000 extra passengers With its population expected to reach 200,000 by across the regional V/Line network. 2040, the City of Ballarat is preparing to transform parts of the region from greenfields into residential As of 2020, trains will run between Ballarat and and jobs-creating industrial estates. Melbourne every 40 minutes instead of every hour. Further plans aim to have that frequency reduced to - Road and Rail Transport every 20 minutes by 2030. Following the opening of the $5 billion Regional Rail The Ballarat Link Road is a key transport priority of Link which ensured Ballarat trains were no longer the City of Ballarat. The 16km road will be a major caught behind Metro trains between Sunshine and north-south arterial road and will provide a direct Southern Cross Station, the Federal Government link from the Western Highway to the Midland has allocated a further $555 million for upgrades to Highway. The project, which still requires $80 million the Ballarat line. for future stages, will be delivered in stages over the next 25 years. Sections of the line will be duplicated and passing loops introduced, leading to the eventual The link road will support the development of the electrification of the line to Melton, which could be Ballarat West Employment Zone as well as the city’s completed by 2026. rapidly expanding suburbs.

BALLARAT Regional Victoria 6 - Education When it comes to education, as Business Ballarat BALLARAT WEST PRECINCT AND says, the city is “in a class of its own”. Ballarat has EMPLOYMENT ZONE – FAST FACTS two universities (Federation University Australia and Australian Catholic University), a TAFE Institute and numerous schools. • 18,000 homes over 30 years Federation University has recently opened a tech • 9,000 jobs school and plans to build an $11 million renewable • $5 billion in economic activity energy training facility. annually. Elsewhere, schools are being built and others are receiving upgrades to cater for population growth. - Ballarat West Precinct and - General Infrastructure Employment Zone According to Ballarat City Council, there is currently The Ballarat West Employment Zone (BWEZ) is a $500 million worth of projects currently under way. staged development of 438ha near the Ballarat Some recently completed projects or those in the Airport. pipeline include: The zone is an industrial estate for a range of • The $60 million Delacombe Town Centre is open. manufacturing, agribusiness, construction, freight • Stockland Wendouree’s $37 million expansion is & logistics and research uses. It includes large lots, completed. a freight hub, access for high-productivity freight vehicles and infrastructure. • The Ballarat saleyards have re-located to Miners Rest at a cost of $24 million. The tenants so far include laboratory equipment manufacturer Westlab, Findlay Engineering, • Work is under way on the $44 million Ballarat Milestone Benchtops, civil construction company Station Precinct. A $5 million bus interchange, Pipecon, Kane Transport, Broadbent Grain, a Quest Hotel and convention centre will machinery company Agrimac, treatment table complement the project. manufacturer Athlegen and brewing firm BROO. • Ballarat Sports and Events Centre has just National food manufacturer Luv-A-Duck is the latest received a $24 million upgrade. company to commit to the BWEZ and is building a • The $22 million AFL-standard Mars Stadium $20 million facility. (formerly Eureka Stadium) has opened. Several residential estates ranging from 100–300 • The former Civic Hall is being transformed lots are proposed or under construction around into office space - the $100 million GovHub. Ballarat. New homes are appearing in the growth Government Departments that are expected corridor of Lucas, Alfredton and Delacombe with to re-locate to the hub include: Education and Invermay Park marked for future development. Training, Justice and Regulation, Economic A new report from the Department of Environment, Development, Jobs, Transport and Resources, Land, Water and Planning shows that Delacombe Consumer Affairs Victoria, Environment, Land, and Alfredton will be among the three largest Water and Planning, State Revenue Office, regional growth areas in Victoria. VicRoads and Service Victoria. The hub will house 1,000 workers. Delacombe’s population is expected to increase from 7,200 in 2016 to 19,200 by 2036, a 2.7% annual • The Council is replacing the old Civic Hall with a growth rate, the highest in regional Victoria. $20 million City Hall. Alfredton’s population would rise from 11,800 to • Barwon Water plans to spend $12 million on 26,400, an average annual increase of 2.2% per year building a pipeline from Geelong to Ballarat, - third highest in the state. thus improving water security.

BALLARAT Regional Victoria 7 • Housed in the Flecknoe Building following a $9 million refurbishment, Runway Ballarat is a hub TERRY RYDER’S PICKS for digital innovation and entrepreneurship. A prime driver of Ballarat’s real estate rise is - Wind Farms its housing affordability, especially relative to Melbourne. Wind farms are a growth industry for the Ballarat Sebastopol on the southern rural-urban fringe district, the largest being located at . The of Ballarat is the city’s cheapest suburb and, in Waubra wind farm generates enough electricity to terms of sales volumes, the most popular (218 power 145,000 homes each year. house sales in the past 12 months). Despite an Two other established wind farms are the Ararat 9% annual rise, the median price remains at Wind Farm and Mount Mercer Wind Farm. Between $305,000. The median rental yield, 5.3%, is them, they can power 220,000 homes. attractive for investors. A further three projects, including the $950 million Sebastopol has several large green reserves, Stockyard Hill farm near Skipton, could be up and including Yuilles Wetlands, major retail, schools running by 2020. The Stockyard Hill farm would and community services. generate enough energy to supply 250,000 homes. A number of light industrial estates present (More detail about these projects can be found in the major jobs nodes in and around the suburb. tables at the end of this section.)

Projects impacting on the Ballarat region include the following:- COMMERCIAL DEVELOPMENTS

Project Value Status Impact Police call centre, $210 million Completed Jobs: 200 Mount Helen

State Govt

GovHub, CBD $100 million Under construction Jobs: 500 construction A 5-storey building Completion expected by 600 operational including a new City 2020 Hall

McCain Foods plant $58 million Completed Jobs: 648 retained upgrade New storage and 100 will be up-skilled equipment will extend the life of the plant for 15 years Ballarat Station $44 million Under construction Jobs: 140 construction Precinct A new hotel, conference 30 operational centre and upgraded Pellicano station facilities

BALLARAT Regional Victoria 8 INFRASTRUCTURE – HEALTH AND MEDICAL FACILITIES

Project Value Status Impact Ballarat Base Hospital $461 million Approved Jobs: 1,400 construction redevelopment Funded by the State 1,000 operational Govt, construction would begin in 2021 and be completed by 2026

INFRASTRUCTURE – TRANSPORT

Project Value Status Impact Western Highway $505 million Under construction Will improve links from duplication Highway duplication Ballarat to Stawell with state and federal John Holland Group funding

Ballarat railway $555 million Under construction Jobs: 1,000 upgrades $502mil funded by the Passing loops and Federal Govt; $55 by the duplication of the State Govt Ballarat line to Melton

Melbourne Airport rail $10 billion Proposed Ballarat residents link Construction could begin could travel directly to in 2022 and be finished the airport State & Federal Govts by 2026

Ballarat Link Road $100 million Under construction Will link the Western 16km link to be built in Highway to the Midland Ballarat City Council stages Highway

Midland Highway $12 million Under construction Part of a $340mil upgrade, Ballarat to state-wide package Creswick

State Government Fast rail service $100 million Proposed Sunshine–Ballarat Funding was allocated in the FY2020 Budget State Government

BALLARAT Regional Victoria 9 RESIDENTIAL DEVELOPMENTS

Project Value Status Impact Lucas, master-planned TBA Under construction Jobs: 2,000 suburb 14,000 homes, supermarket, medical centre, park and community centre Pinnacle Residential $200 million Under construction 700 lots, opposite Estate, Smythes Creek Delacombe shopping centre Abiwood

Winterfield master- TBA Under construction 1,100 lots, a primary planned suburb and secondary school, retail precinct, medical Goldfields centre and cafes

RESOURCES AND ENERGY

Project Value Status Impact

Stockyard Hill $950 million Under Construction Jobs: 300 during Wind Farm construction; 25 operational Origin Energy Would power 390,000 homes

Lal Lal $400 million Under construction Jobs: 190 construction Wind Farm Facility will power 20 operational 44,000 homes Macquarie Capital

Golden Plains Wind $1.5 billion Approved Jobs: 700 construction, Farm, Rokewood Construction is to begin 70 operational in 2020 Would power 450,000 WestWind homes

Mooroobool Wind Farm $600 million Under construction Would power 200,000 Completion is expected homes Goldwind in 2020

Ballarat Energy Storage $35 million Completed Would power 20,000 System homes for an hour

Spotless Sustainability Services consortium Ballarat renewable $11 million Proposed Jobs: 15 training centre The centre would be housed at BWEZ Federation University

BALLARAT Regional Victoria 10