• • • • • • • • • • , ~ 711.4 099451 MEL:M 2030 pr~ No.4 copy 2 :~ _.... • • Message from the Ministers • By world standards Melbourne is a great city. The Bracks Government is committed • to maintaining Melbourne's reputation as a highly liveable city and an attractive investment destination. The Government has embarked on the preparation of a • Metropolitan Strategy to set a clear vision for Melbourne's future liveability, prosperity and, importantly, its long-term sustainability. • The preparation of the Metropolitan Strategy is drawing on inputs from a wide • range of sources. It is vital that the strategy has a sound research and information • basis. It is also especially vital that community aspirations for the city's future be well understood. .'. The key inputs to the strategy therefore include both a wide • ranging public consultation program as well as a series of research or technical papers on issues that may have an impact on Melbourne's future. • The Bracks Government has given an undertaking to make as much of this • background information as possible widely available to stimulate discussion about • the future of Melbourne. • This report is one of the technical reports commissioned by the Department of Infrastructure, which we hope will stimulate feedback. At this stage content and • recommendations are only the views of its authors and not necessarily the views of the Government. The Strategy is still in its early stages of development and we • remain open to hearing what the broader community would like it to encompass. • We encourage you to read this and other technical reports and, should you wish, • to make your views known about the future of Melbourne by contacting us on: • Tel : 1800 191 012 Email : [email protected] • or write to: • Metropolitan Strategy Project • GPO Box 2797Y Melbourne 3001 • • John Thwaites MP • Minister for Planning • • • The technical reports entitled, Melbourne's Housing Past, Housing • Housing Futures, have been written for the Department of lnfrast1 Social Research . Contributing authors were: • Terry Burke David Hayward. • A summary of these reports is also available. For a copy of this su • technical reports and summaries, please visit the project web site telephone 1800 191 012 . • ISBN 0 7306 8653 1 • • • • • • • • Housing Past • • • Melbourne's Infrastructure Library • • Housing Futures • • This paper has been produced as a background discussion document for the • Melbourne Metropolitan Strategy Project. The contents of this paper do not • necessarily represent the position of the Department of Infrastructure or its • employees or of the State of Victoria . • Any representation, statement, opinion or advice, expressed or implied in this paper • is made in good faith but is not intended to be nor should be relied upon by any • person . • Comments with respect to the contents of this paper should be sent to:.· • • M~tropolitan Strategy Project Team Department of Infrastructure • Level 23, 80 Collins St • GPO Box 2797Y • Melbourne Vic 3001 • e-mail: metroplan@ doi. vic.gov .au • • Terry Burke -···------ David Hayward 711.4 00105703 • DRAFT: 19 September 2000 099451 Melbourne's t1o9sing MEL:M · past, housing futures • 2030 pre No.4 • copy 2 • -··---·---- ) • © lrstiluleforSOOal Researd1, S\WtJume UrWerStyofT~ • • Table of Contents • t Introduction ............................... ·........ ·............... ;.......................................................... 5 • 2 The Study Framework ......................................................................................... ~. 7 3 The System of Housing Provision ........ ···: ............................................................ 8 • 4 The Systems ·context_.::_.·................. .-......,· .. .- ....._ ..................................................... 12 • 4.1 Regulatory Context ......................................................................................... 17 • 4.2 Housing Subsidies .......................................................................................... 18 4.3 Place Marketing ............................................................................................. ;.19 • 5 Housing Production: The Building Industry ................ ·.: ..... , .......................... : .... .'.20 • 6 Housing Consumers ........................................................................................... 24 • , 6.1 Landlord Investors .......................................................................................... 28 7 .Exchange ...........,. ........ , ....................................................................................... 29 • 7. t Finance h1stitutions : .......... : ...................... ~ ...................................................... 29 • 7.2 Estate Agents .................................................................................................. 31 • 8 The Housing Market Outcomes .......................................................................... 32 • 8.1 Prices····.·······························~··········································.····················:············· 32 8.2 The Private Rental Market .............................................................................. 40 • 8.3 Affordability ..................................................................................................... 46 • 8.3.1 Income to House Prices ........................................................................... 46 8.3.2 Housing Costs to Income ......................................................................... 50 • 8.4 An Explanation .............· ............. ; ....................... ~ .......... , ................................... 52 • 8.5 The Form of Residential Development ........................................................... 55 • 9 The Future: Planning and Policy Implications .............. ~ ..................................... 60 9.1 The Economy: Implications for the Next Decade ............................................ 61 • 9.2 House Prices: Up or Down? ................... ································:·······················-63 • 9.3 Affordability. An Enduring Problem ................................................................. 66 • 9.4 Spatial PolarisatiorJ and the New Life for Old. Suburbs ................................... 68 9.5 The Future of Medium Density/ Multi-unit Dwellings ...................................... 69 • 9.6 Back to the Future. The New Fringe Development.. ....................................... 73 • 9.7 Demographics and Housing Futures .............................................................. 74 • 9.7.1 Young households ................................................................................... 75 • 9.7.2 Couples and Dependent Children ........................................................... 76 9.7.3 Empty nesters/retirees.·························.-·····:············································ 77 • 1·0 Conclusion .......................................................................................................... 78 • • • I • • • 2 • • • • Index of Tables Table 1 Housing Tenure Status of Households, M~lbourne and Selected OECD • Countries (Percentage of Total Households) ........................................... 8 • Table 2 Dwelling Type Composition of Housing Stock, Melbourne and Selected • OECD Countries ....................................................................................... 9 Table 3 House Price Volatility Compared: Melbourne and OECD Countries, • 1988-99 ....................· ............................................................................... 11 • Table4 Employment by Employment Status for Major Melbourne Statistical • Regions, 1989-99 ......................................... : ......................................... 14 Table 5 Community Support Fund Expenditures by Region, 1994-99 .... .' ........... 19 • Table 6 Top 20 Residential Builders, Victoria, 1997-98 ...................................... 21 • Table 7 Change in Consumption of Housing Types, by Household Types, • Melbourne Statistical Division, 1996 ....................................................... 25 • Table 8 Change in Consumption of Housing Types, by Household Types, Melbourne Statistical Division, 1991-96 ................................................. 27 • Table 9 Change in Real Median House Prices, Bottom and Top Twenty • Suburbs, 1990-99 ................................................................................... 34 • Table 10 Bottom Twenty Median Priced Suburbs, 1979, 1989 and 1999 ............ 36 ·Table 11 Top Twenty Median Priced Suburbs, 1979, 1989 and 1999 ................. 37 • "'(able 12 Melbourne Housing Market, 1999 (Separate House Sales Frequency by • Price Range) ........................................................................................... 38 • Table 13 Melbourne Flats and Units Market, 1999 (Sales Frequency of Flats and Units.by Price Range) ............................................................................. 39 • Table 14 Quartile Weekly Rents ............................................................................ 44 • Table 15 Changes in Rental Stock, Sydney and Melbourne, 1986-96 ...................... 45 • Table 16 House Price. Affordability and Availability for Selected Income Levels, Melbourne, 1999 ..................................................................................... 52 ,.• Table 17 Medium Density Approvals as a Percentage of Total Residential • Approvals,