Bendigo’s economy at a crossroads: jobs, water and the next council budget

The Bendigo economy is poised between two big bets, a planned $280 million La Trobe University health and innovation hub at Flora Hill and a $1.2 billion Bendigo Health redevelopment on the old hospital site, but neither project has broken ground. Local business owners and council staff are asking: what happens next?

Jobs anchor on hold

The La Trobe University project, announced in February 2025, was supposed to deliver 1,200 ongoing jobs and a new clinical training centre by mid-2028. Site clearing near the university’s Flora Hill campus was due to start in March 2026. It hasn’t. A university spokesperson confirmed to The Daily Bendigo that the procurement process for a design-and-construct contractor is still open, with no award date set. The delay has already hit small construction firms in Long Gully and Epsom that bid on early works packages.

Meanwhile, the Bendigo Health capital expansion, a 420-bed redevelopment on the existing hospital site at Barnard Street, is awaiting final sign-off from the state Department of Health. The project’s first stage, a seven-storey clinical services building, has state funding but no contract. Local subcontractors say they can’t hold capacity indefinitely.

Water, housing and the rate peg

The Murray River remains the region’s wild card. With the Murray-Darling Basin Plan review due in November 2026, Bendigo’s irrigation-dependent food processors, including the McCains factory at Girgarre, face uncertainty about water allocations. A July 2026 report from the Victorian Water Agency shows Bendigo’s annual water entitlement of 28 gigalitres is fully subscribed. Every new development application now triggers a referral to Coliban Water for supply assurance.

House prices reflect the tension. The median house price in Bendigo sat at $512,000 in June 2026, down 2.3 per cent from 12 months earlier, according to the Real Estate Institute of Victoria. Days on market have stretched from 35 to 48 in the past quarter. Agents report buyers are waiting for the interest rate decision due on August 15.

The City of Greater Bendigo is finalising its 2026-27 budget, to be handed down on August 25. The council has flagged a rate cap of 3.1 per cent, the state maximum, but faces a $4.6 million shortfall in federal financial assistance grants. Council officers have warned that without a supplementary grant, community programs at the Ulumbarra Theatre and the Bendigo Art Gallery could face cuts from January 2027.

On Thursday, the council’s finance committee will vote on a proposal to borrow $18 million for a new aquatic centre in Strathdale. The business case projects it would break even by 2031.

Decisions that matter now

The next 90 days will shape Bendigo’s economic direction for the rest of the decade. Here is what to watch.

First, the La Trobe contract award. If it doesn’t come by September, the project timeline slips into the 2027 state election cycle, making it a political bargaining chip. Second, the council budget vote on August 25. If the Strathdale aquatic centre borrowing is approved, it will push the council’s debt-to-revenue ratio above 65 per cent for the first time. Third, the Bass government’s response to the Murray-Darling Basin Plan review, expected in December, will decide whether Bendigo’s food manufacturers get more water or face tighter limits.

For now, the local economy is running on forward orders, not ground-level momentum. The decisions made in council chambers and government offices over the next two months will determine whether Bendigo breaks ground or treads water.