By David Schout
Melbourne’s CBD economy will “roar back to life” and return to pre-COVID levels in the second half of 2024, new research by Deloitte Access Economics suggests.
Despite being one of Australia’s worst-hit areas as a result of the coronavirus, forecasts revealed that the central Melbourne economy “will have put the pandemic behind it by 2024”.
The city’s high share of office-based workers had made it more vulnerable throughout COVID-19, but the report — commissioned by the City of Melbourne — suggested a rebound of city workers would occur in coming years.
While its findings are a welcome positive forecast for CBD businesses, the research was finalised in May and did not factor in the impacts of Melbourne’s fourth lockdown in June, and the fifth lockdown announced on July 15.
It is not known whether these lockdowns would push back the CBD’s recovery projections.
Lord Mayor Sally Capp said the report was a “very encouraging sign” and confirmed the CBD was certainly not “dead” as some had claimed.
“Pleasingly, it tells us that the relevance of cities and cities as engine rooms for our national economy will continue,” she said.
“We take this as a very encouraging sign, confirming that cities will remain an economic powerhouse within the Australian context. But we also take this as a forecast, and we’re doing everything we can to make sure that we can really drive the recovery sooner.”
Prior to COVID-19, Melbourne’s CBD was one of the nation’s fastest-growing economies.
Deloitte predicted it would take around just three years to return to its pre-COVID gross regional product (GRP) peak of around $74 billion.
Cr Capp said that talk of a CBD exodus was simply not accurate.
“For all of the stories about people who are choosing to move out of cities to work, there are just as many — in fact, more people — that are keen to come into the city to set up new businesses and to work. We take that as an encouraging sign. It’s certainly consistent with a lot of the data and conversations we see coming from other major cities around the world. Our focus is really on making sure we can drive that recovery as swiftly as possible,” Cr Capp said.
However, speaking just three days prior to Victoria being plunged into its fifth period of lockdown, the Lord Mayor said the city’s recovery was heavily dependent on remaining lockdown-free.
“Every time restrictions ease we see an uplift,” she said on Monday, July 12.
“Even today, our first Monday where you don’t have to wear masks inside offices, we’ve seen a significant uplift in the number of pedestrians around town and importantly workers coming out of train stations around Melbourne — that’s very encouraging for us. The return of city workers is spoken about quite a bit, and it does go to the city economy productivity, but for us it’s very human scale. Every single extra person is an extra customer into a cafe or a retail store, or somebody also utilising culture, entertainment and accommodation. So for us, they’re very, very important people those workers.”
Cr Capp said weekend foot traffic was also pleasingly around 86 per cent of pre-COVID levels.
Events “crucial” for Melbourne
The Lord Mayor addressed media shortly after Tennis Australia boss Craig Tiley had said community vaccine take-up would be crucial in determining whether January’s Australian Open would go head.
After Melbourne’s Formula One Grand Prix was cancelled earlier in the month due to coronavirus issues, Cr Capp said hosting international events was crucial for the city’s economic activation.
“Reflecting on Craig’s comments this morning, if there was ever a better incentive to get everybody out and vaccinated, I don’t know what is. We need to keep hosting major international sporting events. They deliver multi-million-dollar economic benefits right across our state. They also showcase our city and our state to international audiences which has all sorts of other benefits for us in the long term. We are good at delivering major international events,” she said.
“We need to keep building on those foundations to reinforce our reputation as a city that can host major international events. I understand that the health priority has been consistent throughout this pandemic. It is for our health experts ultimately to make a call on this. But it is important that every single individual knows that our ongoing vigilance and our vaccinations, those individual efforts actually make a real difference to our ability to host those events.” •