What Makes Warrnambool a Good Place to Invest?

Warrnambool is the largest city in south-west Victoria and the main health, education, retail and services centre for the Great South Coast region.

It sits approximately 260km south-west of Melbourne and 180km from Geelong, serving a regional catchment of around 100,000 people across Moyne, Corangamite, Southern Grampians and Glenelg.

Warrnambool is not simply a place where people live and travel to Melbourne for work. It has its own employment base, with jobs across healthcare, education, construction, retail, tourism, government, manufacturing and agricultural services.

The city also serves a wider farming and food-producing region, with dairy, livestock, food processing and agricultural services contributing to the local economy. Its road and rail connections provide access to Geelong and Melbourne, while the city remains the main service centre for south-west Victoria.

For property investors, that means housing demand is supported by people who live and work in Warrnambool, as well as those who rely on the city for essential services.

The numbers behind the local economy

Warrnambool has an estimated population of approximately 40,000, supports around 20,000 jobs and generates approximately $6.3 billion in annual economic output. Gross Regional Product is estimated at approximately $3.2 billion.

The local economy is spread across several industries.

Largest employment sectors

• Health Care and Social Assistance: 23.3%
• Retail: 13.5%
• Education and Training: 9.9%
• Construction: 8.7%
• Accommodation and Food Services: 8.5%

Healthcare is Warrnambool’s largest employment sector, reflecting its role as the main healthcare centre for south-west Victoria. Retail serves people from surrounding towns, while schools, South West TAFE, Deakin University and specialist education providers contribute to local employment.

Tourism and hospitality also support jobs, alongside residential construction, commercial development and infrastructure projects.

Largest industries by output

• Construction: 15.7%
• Manufacturing: 13.1%
• Health Care and Social Assistance: 11.6%
• Rental, Hiring and Real Estate Services: 9.6%
• Retail Trade: 6%

Food manufacturing, dairy processing, meat processing and agricultural services remain important to the wider region.

This spread of employment gives Warrnambool a broader economic base than a town that relies heavily on one employer or industry.

More than $640 million in major hospital and transport projects

Warrnambool has a substantial pipeline of public and private investment across healthcare, transport, education, aviation, housing and community facilities.

The largest current project is the $396.1 million Warrnambool Base Hospital redevelopment, with major construction commencing in 2026.

The redevelopment includes:

• A new multi-storey clinical services building
• An expanded emergency department
• Additional operating theatres
• 22 additional inpatient beds
• Dedicated paediatric facilities
• Medical imaging, pathology and dialysis
• A 120-space basement car park

The Warrnambool Mental Health Unit is also receiving a $10.9 million expansion and redesign, including five additional beds.

Transport investment is another major part of the picture. The $251.6 million Warrnambool Line Upgrade includes signalling improvements, level crossing works, train detection systems, a new crossing loop and improved service capacity between Warrnambool, Geelong and Melbourne. Infrastructure works have also supported modern VLocity trains and additional weekday services.

Other projects include:

1. Warrnambool Regional Aviation Park: $4.3 million for infrastructure that has expanded capacity for up to 21 additional aviation sites.
2. South West TAFE and Warrnambool Learning and Library Hub: A $20 million-plus investment in education, library, digital learning and community facilities. The Victorian Government committed $16.3 million towards the project.

Council has previously identified a broader investment pipeline exceeding $600 million across health, education, food and fibre, aged care, water and tourism. The current hospital and transport projects alone represent more than $640 million in major investment.

These projects bring construction activity and expand local services. They also strengthen Warrnambool’s role as a regional centre for healthcare, transport and education.

Where Warrnambool is expanding

• North of the Merri River
• North Dennington
• Wollaston
• Hopkins Point
• Infill and medium-density development in established suburbs

North Dennington alone covers approximately 160 hectares.

For investors, new housing areas should be understood because they add to the supply of properties available to buyers and tenants. Established suburbs with limited competing supply, good land content and strong owner-occupier demand should be prioritised over generic new-estate stock.

The suburb and the individual property still need to make sense. Buying in a growing city will not have every property benefiting you equally. 

What supports rental and resale demand?

Warrnambool has several features that support its property market:

• A broad employment base: Healthcare, education, retail, construction, government, tourism and manufacturing provide a range of local jobs.
• A large regional catchment: People from surrounding towns rely on Warrnambool for healthcare, education, shopping and professional services.
• Major healthcare investment: The hospital redevelopment and mental health unit expansion increase local healthcare capacity.
• Coastal lifestyle: The city offers beaches, established services and a regional-city lifestyle.
• Lower entry prices: Warrnambool has lower entry prices than many comparable Victorian coastal locations.
• A diverse tenant base: Healthcare workers, teachers, government employees, tradespeople, students, hospitality workers and manufacturing employees all contribute to rental demand.

Established houses in well-located residential areas are generally the strongest investment focus. Properties with convenient access to the hospital, CBD, schools, shopping and major employment areas are worth closer attention.

The amount of competing housing supply nearby also matters, particularly where new residential areas are being developed.

What I would focus on

I would focus on established houses in suburbs with limited competing supply, good land content, strong owner-occupier demand and convenient access to local employment and services.

Warrnambool has its own employment base, a large regional catchment and major investment in healthcare and transport. Those are important factors when assessing whether a property has a solid base of local housing demand.

I would assess the suburb and property individually rather than treating the whole city as one market.

Final word

Warrnambool’s main strengths are its independent employment base, regional service role, healthcare expansion and position as an established coastal city with lower entry prices than many comparable Victorian coastal locations.

The research overview puts its population at approximately 36,255, with more than 18,500 local jobs and a $6.3 billion annual economy.

For investors, the focus should remain on established houses in suburbs with limited supply, strong owner-occupier demand and convenient access to employment and services.