If you’ve been following my blogs you’d know I strongly believe the inner and middle ring suburbs of our capital cities are the place to invest in property.
I’ve quoted a study which proves not all land is created equal and that’s why you should invest in the inner suburbs
So it didn’t surprise me last year when I read in The Age Melbourne could soon have a dual economy: a permanently prosperous inner city, surrounded by ”client” suburbs where jobs are hard to get to and lack security, a new study warns.
And the continued spread outward of the ”already super-sized” Melbourne could leave residents in these new outer suburban areas at risk of ”profound social exclusion”.
As you’ll read below urban sprawl has created an extreme advantage for those who live closer to the CBD and this has also created a widening disparity in housing values with properties closer to the CBD growing faster:
The Age reported:
Four of the last five former Victorian premiers talked to economist and planner Marcus Spiller as part of his research, published in an urban planning journal ahead of last week’s new metropolitan planning strategy, Plan Melbourne.
Dr Spiller, a principal of influential consultants SGS Economics and Planning, recommends reinstatement of a body similar to the long-defunct Melbourne and Metropolitan Board of Works, as a way of de-politicising planning and tackling the growing social divide of access to jobs.
The MMBW’s planning powers were removed in 1983. But all four ex-premiers – John Cain, Jeff Kennett, Steve Bracks and John Brumby – said there was no use in ”rolling back the clock” to reinstate the Board of Works, which one referred to as a ”dinosaur lacking entrepreneurial energy”.
All four agreed, however, that the elevation of planning as a voter issue and ”the introduction of a new [planning] strategy with each change of government” had exacerbated the ever-outward spread of the city’s suburbs.
Melbourne is one of the Western world’s lowest-density cities, stretching more than 100 kilometres from east to west and 90 kilometres from north to south.
Dr Spiller’s report makes clear the extreme advantage inner-city residents have over the outer suburbs in access to work.[sam id=50 codes=’true’]
A Carlton resident, the study said, could access 890,000 jobs by driving for 30 minutes in peak hour, while those in Cranbourne East could get to just 345,000.
The disparity in access to employment is even starker for those using public transport: a Carlton resident had 724,000 jobs accessible within a 45-minute public transport journey, compared with just 5000 for someone in Cranbourne East.
Over the past two decades there has also been a widening disparity in housing values.
In 1990, a house within a kilometre of the CBD cost just over $200,000 while a house 80 kilometres out cost a little over $100,000.
By 2010 a house next to the CBD had a median price around $1.4 million compared with between $300,000 and $400,000 in outer Melbourne.
Dr Spiller’s paper suggests that, after the planning functions were stripped from the MMBW, no new force emerged to plan for the entire city.
Planning ministers had also come to be seen as ”planner-in-chief”, and instead of rising above the political fray had become ”at the centre of the action”, making planning a key battleground.
Instead, individual inner-city councils often frustrated attempts to encourage urban density. Meanwhile, lower land prices encouraged expansion on city fringes.
The Napthine government’s Plan Melbourne predicts the city will grow from its current 4.25 million people to around 6.5 million in 2050.
Key aspects of the plan include a ”permanent” urban growth boundary, encouraging population and jobs growth in regional towns such as Kilmore and Wonthaggi, accelerating planning permit approvals in areas slated for significant housing growth, and encouraging huge employment growth in Melbourne City Council’s area.
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.