With Holden closing and BP cutting workers by 300

You've already got an observation as to how such a market change affects the area.

Look at the closures that took place in quick succession at Dandenong in the late 80s.

First the Watties factory .. then the Holden factory and finally the South Dandenong Cattleyards.

The area was rendered nearly empty for a period of eight years. At which time prices in the area DID NOT MOVE from their original 1986 prices.

It meant for a brief period … you could purchase houses at 60k and units at 40k (realistic unit market was just over 180k in a decent burb at the time- think 400k+ now)

in other words .. it stagnated .. and very badly until capacity for new tenancies in the area was reached.

Until then it was used by Govt agencies as cheap housing for migrants .. and low cost housing for 'undesirables' .. hence the recent reputation for the area.

Geelong isnt Dandenong .. but with a large emptying of its local workforce and surrounding dependancies .. you can expect both commercial and residential tenancies to be on a slide until the capacity is picked up by newer businesses in the area.

That can be quite a while unless the council and state governments do something appropriate.

In other words .. it will be quite a while.

Hi Gizzy,

Like any other place, businesses come and go, or adapt to a changing market-place.

There are more than 88,000 jobs in Geelong, spanning multiple industry sectors.  300 jobs is a drop in the ocean.  Simultaneously, other companies are moving into Geelong, creating more jobs.  One such example is the clothing giant "Cotton On" who recently moved their head office to Geelong; bringing 500 jobs to the area.  The net effect is an increase is the total number of jobs in the area.

They’ve always been there. This is a major warehouse and distribution upgrade. The majority are low paid jobs that will see numbers decrease over the years as more sophisticated automation is embedded. Think Amazon. On the retails side these are mainly low paid front desk sales jobs. Vic faces what every region faces and that is a race to the bottom in low cost consumer goods facilitated by low paid employment that is replacing lost middle class manufacturing jobs.

With one of the highest population growth rates in the 1st world the next few decades will see significant pressure on both job and wage growth.

Current RE price growth is being driven by massive capital outflows from China into RE globally. Melbourne is being referred to as the next Chinese city with corresponding empty tower blocks.

The Chinese will eventually blow up RE markets around the world. Printing $203B monthly has to go somewhere. It will not end well.

Cotton On has always been there. The head office expansion has been in the pipes since 09. Expanding their HQ's was constrained by planning reg's so they applied to have the reg's relaxed in order to facilitate an in situ expansion capable of meeting their needs out to 500 personnel.

The reality is they never moved there because they were already there and a large chunk of the 500 jobs already existed. in fact their projections show that they expected to reach 500 personnel by the end of 2012 some 12 months ago so I suspect that nothing has actually changed and the media release is govt PR to placate the masses given the Holden losses. The article you read is an MSM propaganda campaign constructed by the state govt for political purposes

Source: http://www.dpcd.vic.gov.au/__data/assets/word_doc/0009/79434/Greater-Geelong-C257.doc

BACKGROUND

5. The amendment has been requested by Cotton On in order to expand the company’s head office at 14 Shepherd Court, North Geelong, which is restricted under the site’s current zoning controls. 

6. On 18 September 2009, the City of Greater Geelong (Council) wrote to the Department of Planning and Community Development (DPCD) advising that Council officers had been in ongoing discussions with Cotton On and that those officers agreed that the best way to accommodate Cotton On’s future growth at the site was via a site specific planning scheme amendment.  Council officers also advised that they supported the processing of the planning scheme amendment via section 20(4) of the Act.

7. On 1 July 2011, Council wrote to DPCD confirming that they remain extremely supportive of Cotton On's request for a planning scheme amendment via section 20(4) of the Act.    

8. At present, Cotton On is restricted to only 500 square metres of office floor area due to the zoning controls that cover the subject land, namely the Business 4 Zone and the Industrial 1 Zone.  This office floor area restriction is having a major impact on the growth opportunities of Cotton On head office.  The Cotton On distribution centre has recently moved to a site in Lara, and the site at 14 Shepherd Court now has the floor space capacity to accommodate the forecast growth of the Cotton On head office, which based on their current growth and strategic plan, is expected to increase to over 500 employees at this office by the end of 2012.

Not only are we losing the quantity of jobs created but quality is also on the decline. Income growth per se is largely driven at the top end not in the middle and lower class jobs.

nearly Xmas….have a good one

Simple… they'll be imported…. like everything else I'm afraid.

Manufacturing is a race to the bottom as the consumer is impoverished and so it goes in a circle.  In 1982 a F&P washing machine was NZ$950 and the average income was around $10-12k/yr. Now they're $450 and the average income is around $60k.

Work that deflationary pricing out.

Dear Gizzy, 

My name is Hari Yellina. Total loss for Geelong Job market will come around 1000. But remember, there is always new companies are opening up. 

In few years, Geelong will become warehouse hub for Manufacturing goods. It has become very expensive to warehouse your goods 30 KM from Melbourne. Most of this ware houses will be shifting Geelong soon. 

Geelong is not a mining town where 80% of the jobs are in one industry. Holden and Ford total .5% of total Geelong employment. As we speak there are few companies expanding in Geelong, because of its close proximity to Melbourne. 

If you already have an investment property, you dont need to worry. 

Thank you

Hari Yellina