How will Melbourne cope with an extra 2 million people?

The Victorian Baillieu government is drawing up plans for the future of Melbourne. 

And they’ve got quite a task ahead of themselves as Melbourne’s population is expected to increase by half again from the current 4.1 million. This means an extra 2 million residents in less than 40 years.

This influx is sobering when you consider the amount of infrastructure required to support that many new inhabitants.

A planning report, Planning for Community Infrastructure in Growth Areas, has revealed we’ll need eight new hospitals, 67 secondary schools, 125 new maternal and child health centres and 222 kindergartens by 2050 to cater for Melbourne’s booming population.

Melbourne today.
There are just over 4.1 million people living in Melbourne today and its population is projected to grow by about 65,000 new residents each year over the next decade.

Currently there are 1.63 million private dwellings in Melbourne, of which about 15% are apartments. Over 70% of Melbournians own their own home with almost half of these owning their homes outright (with no mortgage.)

While on average there are 2.6 people per dwelling, almost one quarter of the city’s residents live alone.  In fact less than half of Melbourne’s homes have children living in them.

What about the future?
These figure suggest we’re going to need around 760,000 new dwellings built in Melbourne in less than 40 years of which close to 250,000 could be apartments.

You see…our changing lifestyles mean more Victorians are going to trade their quarter acre block for a balcony and the percentage of apartments in Melbourne is likely to grow closer to 30%.  As a point of comparison, currently 25% of all dwellings in Sydney are apartments.

We already know that Melbourne has been voted as one of the world’s most liveable cities, but in order to maintain this mantle our federal and state governments as well as local councils will have an important role to play by investing in key infrastructure in a timely manner

Especially as Melbourne starts to look like many other large international cities with high-rise apartment building dotting the landscape.

What does this mean for property investors?
Melbourne’s strong population growth, together with the increasing affluence of its residents, coupled with the fact that many of them will want to live in the same suburbs close to where all the action is, will ensure the value of well located properties will keep increasing over the long term.

The trick will be to own the type of property that will be in continuous strong demand by a large demographic of these new residents, and for many, this is likely to be well located apartments.



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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit

'How will Melbourne cope with an extra 2 million people?' have 4 comments


    November 30, 2012 Andy

    Hello Michael,
    I think thats the firs post of yours this year where you are quite optimistic about Mebourne inner city apartments. Do you still think there is going to be oversupply in next few years or your view has changed?


      Michael Yardney

      November 30, 2012 Michael Yardney

      I am confident about the long term prospects of Melbourne “inner city” apartment market, but the short term oversupply in this category of property as well as in the new house and land arena is still of considerable concern



        May 13, 2013 Mandeep

        Would you agree that Melbourne’s housing market may look up north for future property development in the area of free standing houses? Perhaps around Doreen / Epping?

        Look forward to your comments.



          Michael Yardney

          May 13, 2013 Michael Yardney


          I agree Melbourne will spread in all directions. But I do not think these areas will make good investments. Physical growth and capital growth are 2 very different things


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