Key takeaways
Today’s outer suburbs (e.g., Tarneit, Officer, Marsden Park) will become the middle suburbs of tomorrow, just like Doncaster and Ryde did in past decades.
Millennials moving to urban fringes today will shape these areas into mature, established suburbs over time.
Unlike European cities, Australia lacks medium-density housing, jumping from high-rise apartments to detached homes.
"NIMBY" opposition in middle suburbs blocks development, forcing cities to sprawl outward, increasing congestion and infrastructure costs.
Recognising that councils won’t solve the housing crisis, state governments (Victoria, NSW) are stepping in to fast-track developments.
Future resistance to densification will be met with financial penalties and administrative takeovers for councils that refuse growth.
Historically, infrastructure in Australia lags behind housing development, leading to inefficient urban growth.
High-speed rail might not seem viable today, but securing land corridors now will prevent costly fixes later.
Sydney and Melbourne can’t just double in size—new growth hubs like Newcastle, Wollongong, and Geelong need to triple or quadruple.
Smart planning is crucial: these cities must be built with transport links, walkable communities, and medium-density housing.
Australia is changing.
Our population is growing, our economy depends on migration, and our cities are expanding, whether we like it or not.
But how will our suburbs actually change?
Will we continue to sprawl outwards, creating ever-larger commuter belts, or will we finally start building smarter, more efficient cities?
Let’s take a deep dive into what’s coming for our suburbs and why some of the places we know today will look completely different in just a couple of decades.
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The urban fringes of today are the middle suburbs of tomorrow
One of the most predictable trends in Australian property is how our cities expand.
Right now, the outer suburbs, places like Tarneit, Officer, and Marsden Park, feel far removed from the city centres.
But give it 20 or 30 years, and these will be considered middle-ring suburbs.
Simon Kuestenmacher explains that the people moving to the urban fringe today which are mostly millennials starting families will eventually shape these areas into more mature suburbs.
He said that what is now seen as an isolated outer suburb will soon be part of the city’s fabric.
We’ve seen this happen before.
If you told someone in 1990 that places like Doncaster in Melbourne or Ryde in Sydney would be considered inner-to-middle suburbs, they might have laughed.
But here we are.
As I always say, if you’re looking to invest in property, it pays to think long-term.
Buying in the right fringe suburbs now could mean securing a prime middle-ring location in the future.
Why Australia’s cities keep sprawling - and why it’s a problem
Australia has a peculiar urban structure.
Compared to Europe, where cities are built around dense, walkable neighbourhoods, we’ve largely developed on a sprawling model—inner-city apartments surrounded by a sea of detached houses.
Simon describes this as “missing the middle”.
This means that we have high-rise apartments in the city, and then suddenly, two kilometres out, they are all standalone houses.
There’s almost no medium-density housing in between.
Why?
Because middle suburbs, which would be the perfect place for townhouses and low-rise apartments, are dominated by NIMBYism—residents who oppose new development in their area.
NIMBYs (“Not In My Backyard” activists) are often older homeowners who don’t want higher-density housing near them.
And because local councils tend to listen to their loudest constituents, much-needed developments are often blocked.
The result?
Well, we have no choice but to sprawl further out, adding to congestion, increasing infrastructure costs, and making our cities less efficient.
Will state governments override NIMBYs?
There’s a growing realisation that we simply can’t let local councils dictate all planning decisions.
That’s why we’re now seeing state governments stepping in and overriding council objections to push through higher-density housing.
In Victoria, the government has identified areas where planning approvals will bypass local councils and even VCAT, allowing fast-tracked development.
Similarly, New South Wales has started directing councils on where and how new housing must be built.
According to Simon, this is just the beginning.
He believes that State governments are waking up to the fact that councils won’t solve the housing crisis.
They’re starting with incentives and extra funding for councils that meet their housing targets, but soon, we’ll see the stick.
Councils that refuse to allow development will lose funding, and some may even be put under administration.
We’ve already seen this happen in Victoria, where the state government sidelined councils on certain high-rise projects.
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In the coming years, expect more direct intervention from state authorities as they attempt to force density into established suburbs.
The message is clear: Change is coming, whether the NIMBYs like it or not.
The infrastructure challenge: can we keep up?
Of course, building more homes is one thing, making sure people can actually live in these new suburbs is another.
Infrastructure is often an afterthought in Australia.
We build houses first, then scramble to add schools, hospitals, and public transport later.
It’s an expensive, inefficient way to grow a city.
One of the biggest long-term debates is high-speed rail.
Right now, a fast rail network linking Sydney, Melbourne, Brisbane, and regional cities seems unrealistic.
But at some point, it will become a necessity.
According to Simon, the current idea of a fast rail network might not be financially viable today, but at some point, it will be an absolute must.
He said that the mistake we keep making is failing to earmark land for these future projects.
If we don’t protect corridors for future rail lines now, we’ll be paying billions later to fix our short-term thinking."
For example, Melbourne’s level crossing removal project is costing billions of dollars to correct decisions made decades ago.
The same will happen with transport corridors if we don’t plan properly now.
Where will Australians actually live?
Here’s a thought experiment: Australia’s population is expected to double within the next 70-80 years.
That means another 27 million people will need somewhere to live.
Where will they go?
We could simply double the size of our current cities, but that’s not practical.
Melbourne and Sydney already struggle with congestion and liveability.
Instead, we need to look at new growth hubs.
Newcastle, Wollongong, and Geelong don’t need to double in size, they need to triple or quadruple.
These cities will become major urban centres in their own right.
Instead of allowing these cities to sprawl like Sydney and Melbourne, we should be building them smarter from the start, creating medium-density, well-connected, and walkable neighbourhoods.
Will we do it?
That depends on whether our urban planners can think beyond short-term politics.
What this means for property investors
If you’re looking at property investment through a long-term lens, here’s what you need to consider:
- Outer suburbs will become middle suburbs – Areas that feel “far out” today will be prime real estate in the future.
- State governments will override councils – Planning rules will continue to evolve to allow more housing.
- Infrastructure is key – Suburbs near future transport upgrades and planned amenities will benefit.
- NIMBY resistance won’t last forever – Eventually, baby boomers will move on, and new generations will push for change.
- Look beyond Sydney and Melbourne – Regional cities like Newcastle, Wollongong, and Geelong will be growth hotspots.
The bottom line
Change is inevitable.
The way our cities look today is not how they will look in 20 or 30 years.
Some suburbs will gentrify, others will densify, and entirely new urban centres will emerge.
Smart investors will anticipate these trends before they happen, rather than reacting when it’s too late.
So, the next time you drive past an outer suburban estate and think, “It’s too far out”, remember, someone said the same thing about Box Hill, Parramatta, and Chermside 30 years ago.
The future is coming.
Are you ready for it?
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