Melbourne economy outlook

Hi any info on the general outlook of Melbourne economy Medium to long term

I have not seen any plans by the local government on how they planning to create huge Jobs to support a huge growing population they have attracted.

I own new property in Melbourne west(cos they were the ones I can afford to buy) , but its been very surprising the growth they have achieved, the property prices seem to be going very high, but cant see what’s driving this frenzy.

I don’t see any big industry in Melbourne; only seem to be having a huge housing industry fueled by foreign and interstate (NSW) buyers.

What happens when this investing stops, will Melbourne experience a massive recession similar to the mining industry town, will this trigger a collapse in property market in melbourne.

I have seen auto industry collapsing in Melbourne, other than this I don’t really see anything manufactured/produced/designed/created from Melbourne that I use in everyday life so what’s driving this frenzy on property and Jobs.

Other than short term building industry I can’t really see any other long-term employers in Melbourne. Should I get out of Melbourne housing market while it’s hot now?

 

Most livable city in the world?

 

I work in an IT company that does large scale ERP transformations. All my projects are typically in Melbourne at different companies head offices(telco, retail, diversified mining, energy, diversified manufacturers). Colleagues who are in other offices typically have to travel to Melbourne for these companies and some of them have relocated now.

 

lots of ASX200 HQs are in Melbourne

 

I agree with OP to some extent. Current property prices in Melbourne don't justify the underlying infrastructure and Jobs on offer. Digital disruption will affect a lot of businesses and that is just one factor that comes to mind (coming from an IT background).

 

With anything takes a while to get traction and then full adoption.

 

Extract download from stock company research either way still Victoria

 

they have an office in Docklands I think.

 

Policy has changed and has impacted on what foreigners can buy.

I am bullish on Melb, though we may be close to peak, but I still believe Melb will be a good long term bet. Numero uno for immigration, this drives growth

In the year to April 2017, there were 737,530 permanent and long-term arrivals into Australia – up 8% from March 2016 but down from the record 792,500 arrivals set in the year to January 2013 – partly offset by 450,450 permanent and long-term departures from Australia.



We can strip out the net arrivals line from this chart and this is what it looks like:



The net affect is that there were 287,080 net permanent and long-term arrivals into Australia in the year to April 2016, down from the record 416,810 net arrivals in the year to July 2009, but way above the 40-year average of 164,173.

So this strong immigration picture is part of the story.

But the other thing to remember is the immigrants tend to overwhelmingly favor Sydney and Melbourne.

 

To the OP I think the same logic applies to Sydney. Most people don't have that high paid earning jobs. Yet the growth in Sydney for the last few years is higher than Melbourne, in many way insane amount of growth. Go figure.

In fact, so much so that a large number of people have moved out of Sydney and moved to Melbourne. The mass migration to Melbourne is driving up house prices, which is still relatively affordable compare to Sydney.

 

It depends...

Lots of immigration without the jobs to support them when they arrive is a short term bad scenario....guaranteed to lead to more welfare, more competition for existing jobs which forces down wage growth, more crime, more social issues, more Government deficit which require higher taxes to fund all of the above.....unless the jobs creation climate is increasing.

It's like introducing more and more folks to come and live in your house, and no increase to Mum and Dad's income. Sounds all fabulous and fuzzy; but there is an economic and lifestyle cost to all.

Add to all of the above the ever-increasing mindless RET's, which we now know are proving to increase electricity prices across the Country (see Adelaide for the Canary in the mineshaft), and we will also see a decrease in job growth just on this alone; as more and more businesses will need to shed Staff to support the crippling energy prices, and/or close down.

 

when you got more ppl, they are going to need services, for e.g. in the area of pt cook barren land 4 years ago, ppl buy places move in - there are now schools opening, a local shopping mart (to build these places and provided the services, it creates job creation - teachers, builders, labourers, garderners, supermarket cashiers etc). If you got no one moving in those areas, then there would be no need for this services.

There probably needs to be a better support network for the refugees that come in as many of them would not have the instant capability to do their jobs they had in their country. I remember my trade had to bring in an apprentice a 48 year old guy who was an accountant in his home country but couldn't practice due to poor command of English etc.

as for electrical prices - I think you do know who owns the grids in Australia (esp for Victoria). These companies have to present a paper of how much to charge to the Australia energy regulator who then only signs off on it.

 

Many of the jobs utilised for the new services being created will be done by existing workers in Aus....roads, construction, school teachers, hospital workers, Doctors, Retail, etc.

Unemployment officially went up to from 5.5% to 5.6% this month....you would have to be completely naive to believe this is the real figure...it is easily above that when you consider the figures do not include those who aren't even looking for work.

The immigration level for Aus per year is currently approx 200,000?

Add to that; about the same number of school kids leaving school each year - approx 200,000?

So; approx 400,000 folks entering the workforce each year (obviously not all immigrants are working age adults), so let's call it 350,000 per year flowing into the workforce, looking to find a job to support them.

How many full-time lifestyle supporting jobs per year are being created to absorb all these folks? There are plenty of "new" jobs created out of full-time jobs - changed from full-time to only part-time and casual in many cases....not enough hours to support folks; but called "jobs" just the same....

Many of the school leavers are not going to be employed doing the major infrastructure and other jobs being created because they will need a qualification of some sort - unless they are being employed as apprentices in many of these fields - and we know that apprenticeship numbers are down across the Country.

Also; many of the immigrants coming in will probably not have the quals to do these jobs either - unless they are coming in already with a qualification.

If that is the case; then we should be giving work first to our Citizens already here who have the quals needed to do the jobs...Teachers, Doctors, Nurses, Construction, Trades etc....only immigrants coming in with a qual - who are filling a role that cannot be filled with existing qualified Citizens - should be allowed to come in.

The USA for example for your argument has over 300 million people....in many areas; the standard of living and employment opportunities have declined.

So; just chucking myriad more humans into a place does not actually improve things for all folks.

 

You have valid points on the migrants that come over . Though the migrants I was initially thinking of are the ones that come here to do business, invest and not necessarily looking for jobs or the ones that we take as refugees (as they do put a strain on the system). There are ones that come here to and open 10 milk bars - hiring ppl, ones who open restaurants, ones who open factories and also investment into the country. Whether or not migrants take up jobs by having new demand of services, it still creates new jobs, and of course it will be taken up by the existing ppl looking for jobs. I have a friend who recently actually came over as a dentist and bought up a dental practice who hired 15 ppl (from dentists, nurses, admin staff) . yes the unemployment gap is rising for the "newcomers looking for jobs - but inevitably things are not going to change so gotto work with what you got.

i'm not saying more ppl are necessarily all good - but end of the day it is not something that can be changed, we're becoming more like Sydney I would say.

Take for example the power grids - they're owned by china (they bring in a lot of ppl working here as well as put investment (a lot I might add) into the country to generate jobs. Take the Northern Gas Pipeline project bring in gas from NT to queensland - that generated a lot of jobs and demand for specialist knowledge from both countries.

 

Although arguable, there used to be a sort of balance between net immigration intake and new jobs, investments and infrastructure created?
However these days, it seems the immigration intake is way too much, infrastructures are not enough, and new jobs& investment are going offshore in mass.
While official unemployment stats paint it all in pink and rainbow colours, the devil is in a detail. What jobs are created: spam disribution, sales reps- who are on a commision fee, not real salaries? From what I see -our company and our suppliers and customers: many move their back offices to India, Malaysia or China. So immigration and jobs are moving in opposite directions. That's why salaries are not growing. Immigration makes it look like GDP is growing, but GDP per capita is much worse and so are our living conditions. BTW, last time I heard, Melbourne is not most livable city, more like #16 according to Mercer this year.
Five reasons why Melbourne is no longer the world's most liveable city

 

Exactly..