Economics & Employment Growth

Victoriarepresents3%ofAustralia's totallandmass, yetaccountsfor 23.3%ofnationalGDPand competeswiththelargest economiesinSoutheastAsia.It currentlyboaststhehighest contributiontoGDPofanystateor territory.

Victoriaistheleaderinpremium foodandfibreproductsexports accountingfor27%ofAustralia’s foodandfibreexportsin201819.Inaddition,77%ofAustralia’s dairyexports,50%ofAustralia’s horticulturalexportsand32%of Australia’spreparedfoodexports comefromVictoria.

The largest service sector export is the international education sector. In 2018-19, education exports enjoyed 17% year on year growth. Tourism increased by 12% over the same period, indicative of a significant rise in international tourists and students choosing Melbourne as their chosen place to live, study and work.

Victoria is one of two Australian states to receive a triple-A credit rating from Standard & Poors and Moodys – a rating it has managed to retain for 18 years and a reflection of the economic performance that delivered 27 years of continuous economic growth.

One of the structural features of Western economies has been the decline of the manufacturing sector. Melbourne has been able to replace the job losses from this sector with faster growing knowledge-based service sector jobs. This has been a significant theme in the economy since at least the mid 1980’s and one of the success stories of Melbourne with 523,000 new jobs created between November 2014 and March 2020.

Victoriarepresents3%ofAustralia'stotalland mass,yetaccountsfor23.3%ofnationalGDP

2.3

InfrastructureSpending

ThemostsignificantinfrastructurespendinginMelbourneisthePlan Melbourne2017-2050strategy Thisisametropolitanplanningstrategyto managethegrowthinthecityoverthenext29years.Itintegratesover112 actionplanstoaccommodateforpopulation,housing,andemploymentneeds.

MajorgrowthcorridorsintheSouthwest(Wyndham-Geelong),North(Hume) andSoutheast(Dandenong)willultimatelybeconnectedasaplannedeconomic triangle.

Majorinvestmentsinclude:

WestGateTunnelProject

Constructionontheprojectbeganin2018andcompletionisanticipatedfor 2025.ItinvolveswideningtheWestGateTunnelenhancingconnectivityfrom thesouth-westofMelbourneintotheCBD Theprojectisexpectedtocreate 6,000jobs.

MetroTunnelRailLink

The$11billionprojectconsistsoftwo9kilometretraintunnels,includingfive undergroundstationsfromSouthKensingtontoSouthYarra.Theconstruction periodwillresultintheemploymentof3,500people.Constructionbeganin 2018andisforecasttobecompletedby2025.Oncompletiontheprojectwill serviceanextra504,000commutersduringpeakhour

SkyRailProject

Thismulti-billiondollarprojectis aimedateasingtrafficcongestion throughoutthewholeofGreater Melbourne.75differingleveltrain crossingsarebeingremovedand liftedovera5-yearconstruction timeframe.Completionisexpectedto befinishedby2029

FishermansBendUrbanRenewal

Thelargesturbanrenewalproject inAustralia,theprecinctislocated 1kilometresouthwestoftheCBD. Over480hectareshasbeenrezoned forresidential,commercial,and retailspacestoexpandthecapital cityzone.Theareahaspotential toaccommodate80,000jobsand 80,000residentsby2050

2.4

Supply & Demand

The Melbourne property market can be best described as segmented. The result is, significant variation in property market gauges (supply, vacancy rates, time on market, yields and the like) when a suburb-bysuburb approach is taken.

The strong performance in Melbourne’s housing market and strain on affordability is driving demand for townhomes and apartments. This coupled with strong population growth in Metro Melbourne has seen medium and high-density dwellings tenanted and occupied quickly.

Melbourne had a vacancy rate pre COVID-19 of 2.8% as of April 2020, this spiked to 9.4% during the height of the pandemic in October 2020 but has since fallen back to 1.7%, indicating that Melbourne is undersupplied. With projected population increases exceeding those of other capital cities, Melbourne is challenged with the task of ensuring long term strategies are applied that will allow supply to match demand sustainably. Projections suggest that 1.6 million dwellings are required to keep up with population forecasts to 2031 - this will continue to drive demand.

NEWPORT 3.0

3.1

Population & Demographics

Newport, which is ten kilometres from Melbourne's central business district, is a part of the Hobsons Bay local government area (LGA). The Australian Bureau of Statistics (ABS) estimates that Hobsons Bay City has 91,322 residents as of 2021 census. Hobsons Bay City's population has been steadily growing for the past ten years. The City's estimated resident population was 83,863 in 2011, and it has increased by an average of 1.6% annually since then, according to the ABS.

The Newport suburb is diverse and growing in Melbourne's inner west. It currently has an estimated population of 13,658 which has increased by 5.7% in the past five years. The latest census data shows that the suburb has a median age of 38 and an average household size of 2.6. According to ABS data, over 28.6% of dwellings within Footscray are rented, highlighting the suitability of rental tenure within the suburb.

Couples without children make up over 32.7 percent of local households, indicating a specific need for apartment supply, particularly in an area where median home prices have performed significantly over the previous five years. The substantial price difference between houses and apartments will primarily drive apartment demand. Currently, median house prices are 69.5 percent higher than median unit prices. Longterm, continued pressure on housing affordability will shift demand from home stock to apartment units.

Economics & Employment

Hobsons Bay City's Gross Regional Product is estimated at $6.51 billion, which represents 1.38% of the state's GSP (Gross State Product). The Manufacturing sector is the largest employer with the LGA, generating 7,174 local jobs in 2020/21.

The residents of Newport are overwhelmingly employed in white collared occupations with 54.7% of residents being employed in either a professional or managerial occupation. The size of Newport’s labour force during the census period was 10,678, of which 2,139 were employed part-time and 4,783 were full time workers. Within the workforce, the Hospital industry is the largest employer accounting for 3.6% of total employment follower by Computer System Design and Related Services (2.9%) and Higher education (2.5%). The diversity of the market’s employment base makes it less susceptible to unemployment risks.

Surrounding regions leverage heavily off numerous hospital facilities. Nearby is Footscray Hospital which is currently under a $1.5 billion dollar redevelopment will treat almost 15,000 more patients and allow almost 20,000 extra people to be seen the emergency department each year.

This non-industry-specific profile is less susceptible to structural economic shifts that have greater bearing on the manufacturing and industrial sectors.

Newport’s average household income is $2,657 per week, which has increased by 22.9% between the past censuses. Furthermore, economics and employment are excellent indicators of prospective tenant profiles and the resale markets. It allows us to gauge the most suitable style of accommodation for local demographics within a property market.

3.3

The Victorian Government continue to invest in strengthening the state’s infrastructure. Understanding the extent of the population growth that Melbourne is experiencing, it is critical that sufficient infrastructure is in place to accommodate for the demand of future residents. Numerous public and private infrastructure initiatives are being implemented throughout the Melbourne’s west, particularly within the Hobsons Bay City. These initiatives include:

• New Footscray Hospital – The Victorian Government has provided up to $1.5 billion to deliver a new Footscray Hospital – the largest ever health infrastructure investment in the State. With an increase of nearly 200 beds, the new hospital will treat approximately 15,000 additional patients and enable around 20,000 additional people to be seen by the emergency department each year. Construction of the new Footscray Hospital is now underway, with the hospital expected to open in 2025.

• Fishermans Bend Renewal Project – The Fishermans Bend project is a major urban renewal project located in the inner-city suburb of Melbourne. The project aims to transform the area, which was formerly an industrial site, into a vibrant mixed-use community, with a focus on sustainability and innovation. The project is expected to create up to 80,000 new jobs and provide housing for around 80,000 residents

• West Gate Tunnel Project – The $6.7 billion West Gate Tunnel is a ‘game changer’ for the area, connecting Melbourne’s Inner West with the CBD. The project will give Melbourne a second freeway link between the west and the city

3.4

Supply & Demand

Vacancy Rates 1.5% Gross Rental Yield 3.6% Estimated time on market 45 days

The evolving demography of Newport has had direct impacts on the local rental market. The professional demographic that dominates the suburb’s landscape has inflated Newport’s tenant pool. According to ABS data, 28.6% of dwellings within Newport are rented.

Vacancy Rates

Yields

Implied gross rental yields for apartments were 3.6% as of February 2023 according to data for SQM research. The median rental amount for an apartment in the suburb was $552.

Time on Market