Melbourne's big shift
BERNARD SALT
Author and Demographer
The coming of the coronavirus pandemic is the most significant event to have impacted the state of Victoria and its capital since WWII. And it isn’t over yet.
Events of this scale force a change in the way of life, and Victorians have form when it comes to fleeing the city and the state during calamitous times.
During the early 1990s, in response to the last recession, Victoria recorded a net annual outflow of up to 7,000. Comparatively, in the December ’20 quarter (ABS), Greater Melbourne recorded a net outflow of 8,000.
And it makes sense: diminished employment opportunities prompted city-folk to look for a cheaper cost of living (and a better lifestyle) in the country.
It is worth noting too that more people are likely to be leaving Melbourne for the regions than are leaving the state entirely. I have called these Melbourne-exiters the VESPAs: Virus Escapees Seeking Provincial Australia.
The rise of the VESPA movement is only part of the pandemic’s impact. The main game, the big shift, has been the rise of the work-from-home movement.
I have tracked working from home as a lifestyle choice since the 1996 Census when barely 5% of employees worked from home. That proportion did not shift for 25 years until the pandemic, which, combined with broadband internet access via the NBN, enabled, by my reckoning, up to 45% of Melbourne’s workforce to work from home.
And while there is evidence for an underlying flee-the-city narrative during any calamity, the requirement for as many workers as possible to work from home (because of the pandemic) has accelerated the move to the regions.
New data released by the ABS in February tracking this trend across Australia in 2020 shows that it is the 25–44 (mostly Millennial) cohort that is leading the escape to regional Victoria. By contrast, in 2019 the largest outflow from Australian cities was the 55-and-over tree-changer cohort.
Indeed, I think there is something of a Goldilocks Zone attracting VESPAs working from home of up to a 150km radius from Collins St.
The coming of the coronavirus pandemic hasn’t so much been about access to cheap money and to government support – as important as these prompts to everyday survival may have been – it has also been about change in the everyday behaviour of Melburnians.
And so, if there is indeed a flee-the-city movement underway, enabled by the work-from-home movement, then it prompts two questions. Which places are most likely to be transformed by newcomers? And what are the implications for businesses and towns in these localities?
Over the two years to June 2020 (including the first three months of lockdown) the number of net new businesses (ie, ABNs) added to, or operating out of, the City of Greater Geelong increased by 9%. This compares with an Australian average business (or ABN) growth rate of 5% for this period.
The same thing happened in the Shire of Mitchell comprising Kilmore and surrounds (9% ABN growth rate), the City of Ballarat (6% ABN growth rate) and the Shire of Baw Baw (6% ABN growth rate).
Here is evidence that Victoria’s biggest provincial cities and communities are attracting (or cultivating) a significant entrepreneurial community.
It is important to note that there is evidence of a long-term appetite by government departments for decentralisation from the Melbourne CBD. Consider for example the transfer of the Transport Accident Commission from Exhibition St to Geelong in 2006. This was followed by the shift of Victoria’s Workcover Authority from Melbourne to Geelong in 2014. With more people exiting inner-Melbourne for outer suburbia, this begs the question, could more government departments and big businesses follow suit? Perhaps to create a new work-near-home movement where workers gravitate to suburban regional hubs?
But there are other property-related impacts flowing from the pandemic. The rise in the popularity of online shopping will drive demand for industrial, warehousing and logistics facilities both within greater Melbourne and in some regional centres.
Similarly, uncertainty in the supply chain caused by recent trade difficulties will surely lead to a renewed interest in securing locally manufactured product. Indeed, this drive for supply chain security is likely to expand into agribusiness through the 2020s, which could also result in heightened demand for industrial space in regional cities and towns throughout Victoria.
The coming of the coronavirus pandemic hasn’t so much been about access to cheap money and to government support – as important as these prompts to everyday survival may have been – it has also been about change in the everyday behaviour of Melburnians.
And at the end of the day, that’s what really drives the property market: it responds to the way that we locals want to live, work and play in our state, and in our beloved capital Melbourne, and I don’t think we Victorians would have it any other way.
© Jellis Craig 2021