Apr 7, 2016

Melbourne victory on western front keeps Australian dream alive

There is a powerful demographic transformation under way in Australia that will continue to play out for another generation. One of Australia’s largest cities is re-­balancing its urban form to deliver a long-term shift in the demand for housing, infrastructure and commercial property.
This is a once-in-a-generation property transformation and it’s taking place right now in Melbourne. Yes, Melbourne, that rustbelt city that couldn’t hold on to its state bank in the early 1990s is now this nation’s property powerhouse. Why? Well that’d be ­because the city’s demographic weighting is shifting from the east to the west.
For 160 years Melbourne’s suburbia pushed east into the soft ­alluvial soils of the market gardens, the orchards and the dairy farms that led to Lilydale and ­beyond to the Dandenong Ranges. Then in the late 20th century the mighty Maroondah corridor bumped into the hills and the city’s growth deflected south into the Cranbourne-Berwick-Pakenham corridor.
But then in the late 1990s something odd happened: the city lurched in a different direction. The completion of the Western Ring Road in 1998 was part of the reason but it was more than this. The eastern push of car-based Melbourne had simply reached the limits of commutability at Pakenham, 55km from the CBD.
The city’s far-more-accessible western edge started to look mighty attractive and especially with new suburbs like Caroline Springs, west of Deer Park, and Point Cook and Truganina on the Geelong-facing front all located barely 35km from the CBD. Sure, the west’s treeless volcanic plain and sewage ponds created development challenges, but nothing that couldn’t be overcome with good land-use planning and a robust planting schedule.
All of a sudden Melbourne ­delivered something that Sydney could not deliver: affordability and accessibility. House and land packages on Melbourne’s western edge start at the mid-$300,000s and are less than 40km from the CBD. The best Sydney can offer in the affordable-housing space is mid-$500,000s at Kellyville, 45km from the city centre.
Melbourne has added more people than Sydney every year this century, challenging the demographic dominance of the harbour city that had ruled since Federation. And the trend continues. Figures released by the ABS last week show Melbourne adding 89,000 residents, versus 81,000 for Sydney, over the year to June 2015. But the significance of the Melbourne ascendancy is more than the volume of growth, it is the city’s shift from the east to the west.
The infrastructure underpinnings of Melbourne’s urban mass need to be rethought: new railway lines (regional rail link), new freeways (Western Ring Road upgrade), new river crossing solutions (Western Distributor), new and expanded shopping centres, industrial space and office parks. And whole new suburbs must now be conceived and ­delivered.
In the year to June 2015 the City of Melton and the adjacent City of Wyndham added 15,300 residents, making this “western front” the fastest growing region in Australia. The Gold Coast held this title every year during the late 20th century, but the Coast’s annual growth has contracted to 11,000.
Melbourne’s northern front (Hume and Whittlesea) added 13,900, while the southeast corridor (Casey and Cardinia) added 12,900 over the same year. Sydney offers annual growth of 11,000 in the west (Blacktown and Penrith) and of 12,500 in the southwest (Liverpool, Campbelltown and Camden).
The great commuter corridors of metropolitan Australia have for a generation reinforced the existing urban form: Brisbane to the north and south, Perth to the north and south, Sydney to the north, south and west. And all this, of course, makes perfect planning sense since new growth leverages off the community’s investment in existing foundation infrastructure.
But Melbourne is different. Here is a city that is reconfiguring its urban form and where the west is virgin territory. Everything has to be imagined from scratch. Melbourne used to push east but it is now shifting its demographic weight rather like an elephant getting more comfortable as it rouses from a bit of a lie down on the African savannah. Every shuffle of Melbourne’s heaving urban mass creates localised demand for new housing, new railway lines, new motorways and new workplaces.
Melbourne’s development front isn’t hard to see and nor is it unclear as to where things are headed. Thanks to the urban growth boundary the trajectory of development within Melton and Wyndham is neatly corralled for the balance of this decade and into the next.
By the middle of the 2030s, as Melbourne passes the six million mark, the western front now connecting Melton and Wyndham will have fused into a single urban coagulation not unlike the city’s eastern side. The western front’s Hopkins Road, for example, could evolve into something like the west’s equivalent of the east’s Springvale Road.
Why should business have faith in the future of Melbourne’s west? Because Melbourne’s west is this nation’s last untamed urban frontier. There is nothing quite like Melbourne’s great east-to-west switcheroo that is planned, or that is even likely to be planned, for at least a generation, if not two. Perth isn’t going to push east. Brisbane will not reach out to Toowoomba. Sydney cannot push east.
If Australia is to top 40 million by mid-century; if Melbourne is to approach eight million by 2050; then a fair proportion of this net additional demographic weight will land on the patch of dirt that lies within the urban growth boundary and bounded by Caroline Springs, Melton and the northern edge of Werribee.
Not only will Melbourne rebalance in the first-half of the 21st century, but in so doing it will offer what Sydney cannot offer or will not offer, and that is housing ­affordability. And the reason why Sydney cannot offer competitive housing affordability is because it can no longer deliver developable land within 40km of the CBD.
If Sydney wanted to compete in this space then strategic planners should have reimagined Sydney as a Dallas-Fort Worth binary city, probably inclusive of a bigger Parramatta, from the 1970s onwards. Such a strategy would have opened up Wollondilly to urban­isation within commutable distance of one of greater Sydney’s two CBDs.
Not that this “lost opportunity” will worry Sydney; that city will continue its trajectory as a global city attracting global knowledge workers and it will allow Melbourne to accommodate those who cannot afford to live in Australia’s Manhattan.
Melbourne, on the other hand, will continue to do as it has always done and that is deliver on the Australian dream of home ownership. But rather than deliver this dream exclusively through the quarter-acre blocks of the eastern suburbs, Melbourne will reimagine the dream in the west.
This raises an interesting question: which city — global exclusive Sydney or broad inclusive Melbourne — will ultimately deliver the better lifestyle and opportunities to its residents?
The taming of Melbourne’s west is a break-point in the ultra-long-term visioning of the two greatest cities on the Australian continent.
Bernard Salt is a KPMG partner and is an adjunct professor at Curtin University Business School.

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