Author: Ross Elliott, MacroPlan Advisor and Consultant. The health sector is not only the biggest employer in Australia but also the fastest growing. There were 1,560,400 people employed in health care and social assistance in May this year (Federal DOE data). That’s 50% more than the entire workforce of people employed in professional, scientific and technical occupations. Plus, the health sector is forecast to grow nationally by around 250,000 jobs in the period to May 2022. For context again, that’s double the growth predicted for the professional, scientific and technical sector in the same period and accounts for one in four new jobs to be created across the country by 2022.
Some observers have scoffed that the sector, although brimming with impressive employment numbers, is biased to part time and low wage jobs. This is only partly true. Of the 250,000 new jobs, some 30,000 will be in hospitals and a further 116,000 in “medical and other health care services.” There will be 38,000 new jobs in residential care (not typically high income earners) but there are also 55,000 new jobs in allied health – everything from physiotherapist to pathologists, clinicians, technicians, radiographers, optometrists, dental hygienists and renal technicians (and many more). These are tertiary trained occupations, typically full time in nature and usually above average income earners.
Spatially, this will have profound impacts on urban development across Australia’s regions and cities. Based on current locational patterns, the health sector is likely to drive growth in suburban and regional centres, and have little impact on city centre employment markets. A MacroPlan study completed earlier this year for the Suburban Alliance showed that across South East Queensland, some 90% of health care jobs were located either in suburban business districts or dispersed in a salt and pepper fashion across suburbia. Only 10% were in the inner city, and that included some major hospitals. In Perth, 75% of health industry jobs are found in suburban centres as opposed to the city centre. The ratios in other cities are not dissimilar.
This means that health will not only drive more employment growth than any other industry, but that the growth will overwhelmingly take place in suburban centres – this is based on historic spatial patterns and without taking consideration for the growing impact of technology on business mobility, transport and communication. If anything, it is very likely that this particular client facing industry will become even more 'suburban' in nature in the future than ever before.
What does this mean in terms of the property industry?
For developers, designers and related industry professionals, the opportunity in this sector will require looking outside the five kilometre CBD ring to understand how the growth in health jobs will translate into property demand. What are the typical spatial requirements of medical practitioners, physiotherapist, retail chemists, pathologists, radiologist, and other professionals in the field? What are their location drivers and specific property needs?
In the past many health practices opted for stand-alone premises or perhaps took a tenancy within an existing retail centre. For future development opportunities, we need to be asking the right questions:
- What is the potential for the future development of larger dedicated medical centres, supported perhaps by limited retail such as a coffee shop or bistro?
- Is it possible that well located but underperforming retail centres may in the future morph into larger medical centres with day surgery facilities, as the anchor to a number of retail tenants?
- Is this potential transition part of a solution for the challenges facing the retail industry?
For regulatory planners, applying a new way of thinking about urban development is essential. Local councils in particular need to have to have a good understanding for how growth in this sector will impact their own domain. They will need to challenge their own planning schemes to determine whether they are capable of making the most of this opportunity, or whether antiquated regimes designed for a legacy economy will mean opportunities are driven elsewhere.
Will councils want to see a largely dispersed pattern of smaller medical and health service centres pop up throughout their jurisdiction or are there opportunities to leverage through investment attraction and planning policies to create larger hubs, potentially better served by public and private transport?
Employment growth has always been a primary driver of opportunities in property. For decades, we looked to the finance, property and business sector to drive opportunities for office buildings in our CBDs. We looked to transport, logistics and advanced manufacturing to drive opportunities in industrial property, and to growing consumer budgets and rising populations to drive growth in housing and retail property. In the future, it seems inevitable that growth in the health sector has the potential to drive new market opportunities, particularly for developers with the foresight to recognise and capitalise on those opportunities and councils with the regulatory will to encourage them.
Get in touch:
MacroPlan are experts in the delivery of research into the spatial and property impacts of growth in the health care sector. If you are interested in understanding how growth in this market could create opportunities for your business, please contact Ross Elliott at Elliott@macroplan.com.au.