First Ansett collapse, now Ford plant closure threatens Broadmeadows property market

The closure of Ford's Broadmeadows and Geelong production plants in 2016 with the loss of 1,200 jobs will have homeowners and investors reviewing their property holdings in these two markets.

Particularly concerned will be investors and first-home owners in the outer Melbourne suburb of Broadmeadows, where Ford is the main employer.

Ford Australia chief executive Robert J. Graziano announced today that the two plants, which manufacture the Territory, Falcon and Ute models, will cease production in October 2016 with the loss of 1,200 jobs.

There will be around 650 jobs lost in Broadmeadows and 510 in Geelong.

Local Broadmeadows estate agent Ray Biner from Raine & Horne Gladstone Park expects the plant closure to impact both Broadmeadow property investors and owners, many of whom are first-home buyers.

“Certainly it will impact in a big way” says Biner.

He likened it to the collapse of Melbourne-based airline Ansett Australia in 2001, which, he said, had a massive impact on the surrounding areas with some people losing their homes.

“There are 100s of people in Broadmeadows and Jacana and other surrounding suburbs who work at that Ford plant. It is the major employer in the area,” he says.

“It will impact on people who have mortgages, investors and first-home buyers."

Biner expects that investors would be weighing-up their investments as well as first-home buyers who may have borrowed around $300,000 to get into their first home.

Accordingto RP Data the median house price in Broadmeadows is $318,000.

Production at both plants will continue until October 2016, giving home owners and investors time to plan their finances, but Biner expects that in the short term it will psychologically affect a lot of people.

Lenders might also look at these mortgagees in a different light, he says.

Peter Fort, sales manager at PRDNationwide Geelong, does not believe the Geelong plant closure will have a major impact on the much larger and more diversified Geelong property market, though he says some people may “tread with a bit of caution".

“So many people live in Geelong and commute to Melbourne. It’s very affordable for people and attractive to investors," he says.

Fort says typical Geelong yields are between 5% to 6.5% for houses and townhouses within 5 kilometres of the CBD - well above Melbourne yields of around 3.6% for houses and 4.4% for units.

“We have strong inquiries from Melbourne investors in particular because of the affordable and strong returns,” he says.

ABS census figures suggest around a quarter of properties in Geelong and Broadmeadows are owned by investors.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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