Thursday, August 9, 2012

Fringe fading, inner-city Melbourne booming

MORE than 10 per cent of new homes approved in Victoria in the past year will be built in the city of Melbourne, as developers switch gears to meet the demand for inner city living.

The Bureau of Statistics reports that in the past two years, approvals for new homes on Melbourne's outer fringe have plunged by 25 per cent. Yet approvals in inner Melbourne have almost doubled, almost entirely in the CBD, Docklands and Southbank.

In 2011-12, for the second year in a row, most approvals for new homes in Greater Melbourne were granted in established suburbs within 20 kilometres of the GPO. Of 37,885 approvals in the metropolitan area, 8639 were in the inner ring, 20,374 were roughly within 20 kilometres of the GPO, and 17,511 on the outer fringes.

The figures undercut the state government's decision to take more land out of Melbourne's green wedges for housing. They suggest that increasingly, developers themselves are redeveloping the city and established suburbs to meet demand from buyers.

Last year, Melbourne City Council or the appeals body, the Victorian Civil and Administrative Tribunal approved 5166 new homes in the city, including 1915 in the CBD, 1712 in Southbank, and 640 in Docklands. That was more than the boom municipalities of Wyndham (south-west, 2835 new homes) and Casey (south-east, 2322) combined.

One in 28 homes approved in Australia was in the city of Melbourne. Of the $75 billion of building approvals nationwide, $4.5 billion or 6 per cent was on lord mayor Robert Doyle's turf.

There are fears that supply is rushing ahead of demand, with a risk that apartments could remain unsold, or drive down prices across the inner city, or never be built. Similar fears in 2003-04, however, proved unfounded.

The trend to live closer in is not confined to the CBD. Six other inner or middle suburban municipalities Port Phillip, Stonnington, Monash, Boroondara, Yarra and Moreland each approved more than 1000 new homes, mostly apartments and units.

Of the $7 billion of non-residential building approved in greater Melbourne, $3 billion was in the city centre. But Whitehorse council attracted $554 million of non-residential building, including the Box Hill hospital redevelopment.

On the outer fringes, buyers are going north. The biggest number of approvals last year was in Whittlesea shire, where 3260 homes were approved, mostly in booming suburbs such as South Morang and Mernda. The figures will add to pressure on the state government to extend the new South Morang rail line to Mernda.

Geelong is still booming, with 1897 new homes and $911 million of new building approved in 2011-12. Bendigo approved 1222 homes and Ballarat 985. Overall, metro Melbourne dominated, taking 79 per cent of the state's new homes and 81 per cent of the total value of approvals.