Melbourne's challenges in the face of outer suburb growth

Posted August 23, 2023

  • State government
SGS Economics and Planning Fringe Growth

Melbourne’s outer suburbs grapple with rapid growth challenges.

New research for Interface Councils finds that the State Government’s proposed 70/30 housing commitment will not significantly stem the tide in the short term. Government collaboration is crucial to provide the needed employment, infrastructure, and housing to those on Melbourne’s outskirts.

The State Government is intensifying efforts to manage the expansion of Melbourne's outer suburbs. The primary concern is the potential for population growth to surge in regions where essential services and infrastructure may be insufficient to support burgeoning communities adequately.

By concentrating on development efforts within established suburbs, the government wants to increase the amount and diversity of housing in existing suburbs with established services and infrastructure. The goal is to improve housing affordability, sustainability, and the city's overall liveability.

The plan is to ensure that 70 per cent of future housing is developed in existing inner suburbs, while 30 per cent of housing is built in outer-growth suburbs – the ‘70/30’ housing strategy.

While this approach is necessary, our analysis shows that the 70/30 strategy will only moderately slow down population growth in outer suburbs before 2036. Since many growth areas need better access to employment and infrastructure, accommodating this suburban growth will be challenging.

In a report for Interface Councils, SGS Principal and Partner and lead analyst of this research, Dr Marcus Spiller outlines the obstacles and opportunities that come with a 70/30 development plan and expresses that the strategy will heavily rely on collaboration to execute it effectively.

Melbourne's growth management strategies for the outer suburbs will need to be a collaborative effort between governments for successful urban transformation.

— Dr Marcus Spiller, SGS Principal and Partner
SGS Economics and Planning Marcus Spiller

Dr Spiller’s findings show that although properties in the outer areas come with a lower price tag, they also bear a concealed cost. His studies reveal an increasingly pronounced trend – individuals residing in outer suburbs often lack substantial access to suitable employment opportunities when compared to their counterparts in inner suburbs.

For example, in 1996, new residents moving into Lynbrook could access over 370,000 jobs within a half-hour drive in the morning peak. 15 years later, those living in a new growth area, Officer, could access less than 300,000 jobs in a half-hour drive during the morning commute.

A comprehensive Commonwealth-State partnership akin to the National Competition Policy is required. This partnership would align federal and state interests, leading to planning reform, housing delivery improvements, and infrastructure investment.

— Dr Marcus Spiller, SGS Principal and Partner

The State and Federal Government needs to work with local councils to guide the development of affordable and diverse housing but also put the proper planning measures in place to economically include people who move to the outer suburbs.

Dr Spiller contends that economic inclusion means giving people the chance to access jobs that make the most of their skills and education. Suburbs should be planned and developed to be affordable and sustainable, ensuring access to fitting employment opportunities for everyone.

Download the report

SGS Economics and Planning Melbournes Deveopment Oppotunities Report Cover

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  • State government
SGS Economics Planning Marcus Spiller
For further information contact:

Marcus Spiller

Principal & Partner I Executive Director

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