Time to be positive about investing in property

From Braunschweig to Brunswick – the lessons of change 

I love the suburb of Brunswick in Melbourne’s inner north.

This is for a range of reasons, not least because I grew up there and the suburb shaped me.

Brunswick also prepared me for my career as a real estate economist and strategist, as the suburb’s history illustrated only too well the importance of understanding and anticipating change in the property market.

Brunswick has changed significantly since I was young.

I moved away for some time but, as Brunswick is in my blood, I returned home recently.

The story of Brunswick is the story of so many suburbs in Australia and, indeed, the story of our country.

The land on which the suburb of Brunswick developed and grew is the traditional land of the Wurundjeri people and has been inhabited for thousands of years.

Following European settlement, the suburb would be named Brunswick after a house built on Sydney Road, not far from where I grew up. The house originally had been named after Caroline of Brunswick (the German city of Braunschweig) wife of King George IV.

There was once a City of Brunswick which was the local government area at that time, including the suburbs of Brunswick, Brunswick East and West Brunswick. To long-term locals like me it’s all still just one Brunswick.

Although now mostly a residential location, Brunswick was once a thriving economic and manufacturing hub, home of the famous ‘Hoffman Brickworks’ in the 1800s and many other iconic manufacturers.

Indeed, Brunswick was one of the many suburbs which helped make Victoria a great manufacturing state and helped transform Australia into an economic powerhouse.

Brunswick has journeyed through many changes and has been buffered by the winds of economic, demographic and technological change.

Brunswick’s growth was driven initially by agriculture, then industrialisation and manufacturing and then the rise of various advanced services industries and the knowledge economy more broadly. This most recent phase of knowledge-driven growth affected Brunswick especially given the suburb’s location in the inner north. This was only a few kilometres from the Central Business District (CBD) and the internationally renowned Parkville education, research and health precinct.

In addition, various waves of immigration from around the world and demographic change also have transformed Brunswick. Now, robust population growth and the continues resurgence of inner city living is fuelling the need for more residential development in and around Brunswick.

Approaches to Investing

I’ve been a professional economist and real estate researcher for many years and there are a few basic steps which I adhere to when investing.

The first is to always look at what current and emerging trends are shaping the landscape.

The second is to understand which of these trends are the most important in terms of scale and impact.

Growing and living up in Brunswick taught me that economic, technological and demographic and population trends are most important.

The third is action. After you understand the ‘big picture’ you must move quickly and decisively.

The fourth is commitment to stay the course. I choose not to be moved by the siren calls of the naysayers who choose not to see the connections or anticipate the future.

 Back to Brunswick

A few weeks ago, I moved back to Brunswick.

I have returned to shopping on Sydney Road and meeting both old and new friends as I go about life.

By the middle of the 1800s the Victorian settlement had started to grow.

Brunswick's oldest hotel, the Retreat Inn, opened in 1846.

The Retreat Inn was a popular place for both locals and travelers.

Brunswick, however, was still only a relatively isolated rural place.

The main road was a dirt track.

When gold was discovered in the Victorian goldfields, however, the future of Brunswick was assured.

You see, the fastest way to the Ballarat and Bendigo goldfields was via Brunswick.

I don’t know if its history or folklore, but I remember hearing when growing up that the Retreat Inn was the last place you could get a cold one, for quite a long distance, before heading out to Sydney.

Soon after gold fever swept the settlement brick manufacturing took off in Brunswick.

Right from the beginning economic change was to prove pivotal and the bricks and people of Brunswick really did build the city.

The imposing chimneys, kilns and brick pressing shed of the Dawson Street Hoffman Brickworks acted like a magnet drawing in those looking for work and soon formed part of the local culture.

The brickworks, like the other manufacturers that would appear in Brunswick in the following decades, especially after the First World War, were not just the economic backbone of Brunswick. They were part of the economic, social and cultural fabric and shaped the suburb’s character, its streets and people.

As Brunswick and the needs of residents grew – and life got that little more complex – the suburb saw schools, libraries and other places of learning and education emerge.

I attended St Ambrose Primary School, one of the first schools to open in Brunswick, and a school also attended by men and women who shaped and served the nation in rapidly changing times. These include John Curtin, Australia’s wartime Prime Minister and Bob Santamaria, the influential public intellectual and journalist.

Just down the road from St Ambrose Primary School, is the Brunswick Public Library and Brunswick Mechanics Institute. These great institutions served generations of Brunswick residents and visitors and prepared them for their future work and life. I spent many hours in the Brunswick Library as a child and teenager and it was an important part of my life growing up.

Looking across Sydney Road and the streets of Brunswick today, you see the impact of immigration and demographic change on Australia, especially that of the post-war immigration programme and the waves of immigration which followed starting from the 1960s.

Sydney Road which is the longest shopping strip in the southern hemisphere is an incredible place. It’s dynamic and always changing and hosts restaurants from around the world, a diverse range of entertainment venues and some great cafes and bookstores.

Brunswick’s streets are also changing with classic Edwardian, Federation and Victorian style houses, once joined by brick veneer homes with olive and lemon trees in the front and back gardens, now also being joined by many modern houses, townhouses and apartments.

Today Brunswick is developing yet another new flavour as many new residents discover what a great place the suburb is.

Looking Ahead

Going forward the winds of change will continue to blow through Brunswick and the suburb will continue to change.

Amongst the most important of these winds of change will be those economic and technological forces transitioning Australia to an advanced service-based ‘knowledge economy’.

The health, education and training and professional, scientific and technical services industries – already amongst the largest and fastest growing areas of economic activity – will continue to grow rapidly.

Fuelled by a booming population, construction and property will remain a key driver of growth and employment. This is especially the case with Melbourne continuing to record Australia’s fastest population growth and projected to be Australia’s largest city soon.

Manufacturing, the industry sector which largely helped build Brunswick (and Melbourne and Victoria more broadly) now represents a smaller share of overall economy activity than historically has been the case. However, manufacturing is changing and becoming more smart, value-added, ‘clean and green’ and more advanced.

There are signs that manufacturing in undergoing a renaissance in some parts of the world, for example in the United States, which some thought would never happen.

I wonder if Brunswick, now home to many professionals and other highly educated workers, can one day again host leading-edge manufacturing firms and places of industry that can play a role in an Australian manufacturing and innovation revolution.

Whatever may happen, however, I am extremely positive about the future and, specifically, the residential property market.

Brunswick’s history - and indeed my own history which has been a product of the place I grew up in - has shown me that rapid change presents significant opportunities especially in the residential property market.

Those that can identify trends and move quickly are best to capitalise on this change.

Market leaders like Oliver Hume Property Funds  have been visionary in understanding and capitalising on this change including in the city-fringe Melbourne residential market

Oliver Hume Property Funds  is currently building apartments and townhouses in Parkville and North Melbourne as they have recognised many of the trends affecting inner Melbourne.  

These trends include:

• Rapid demographic change and the emergence of new buyer segments
• Internationalisation of the residential property market and the expansion of foreign investment flows into specific markets
• The emergence of new drivers of growth and transformation of employment locations such as the Parkville Precinct, an internationally renowned employment cluster and
• Significant levels of new infrastructure investment which will help drive growth and reshape our cities. A key project in this regard is the new $11 billion Metro Tunnel which is the first step towards a 'metro-style' rail network not dissimilar to that of other great global cities including London, New York, Hong Kong and Singapore. One of the five new underground stations will be at Parkville.

One Final Word….

Sitting outside a coffee shop on Sydney Road one Saturday morning I can see traffic moving slowly towards the CBD and the other way towards Coburg.

The scene is a frequent one, at peak hour especially, with the media often using this exact image when talking about congestion in Melbourne.

As a local I think to myself that Brunswick has come a long way from the days of the gold rush when this exact spot was full of people travelling to and from the goldfields.

Admittedly they used very different technology to that used today but there are some similarities between then and now.

Victoria’s population growth now might be the fastest since the days of the gold rush when Sydney Road was a dirt track and Brunswick was essentially just a village.

But there might have been some congestion back then also!

As an economist the scene reminds me of the ancient saying “the only thing that is constant is change” and that, despite some challenges, the future looks good.

The coming Australian infrastructure boom, estimated to be larger than the last mining and resources boom, is sure to help ease the pressure on Sydney Road.