The rise and rise of the city ‘fringe dwellers’

GROWTH on the urban fringes has continued “unabated” and should not be ignored in favour of creating higher density housing closer to the city, according to a group representing outer metropolitan councils.

The National Growth Areas Alliance fears the government’s push for ‘well located’ housing close to jobs and services may be at the cost of ignoring the urban fringes.

“I’m tired of a bit of a value judgement, almost, on greenfield sites because people do want to live there. People are moving there in droves, it hasn’t slowed down at all,” CEO Bronwen Clark says.

“In capital cities, there’s still about 25 years’ worth of land and development on the table.

“We’re really concerned that the government focus on what they’re calling ‘well located’ means they’re just going to leave outer suburban people in not well located areas and instead throw all their money towards increasing public transport, for example, where already existing public transport.”

The alliance represents five million people living in Australia’s outer metropolitan areas.

Ms Clark says a move to the city fringes is a different dynamic than a move to the regions, which are established with services. 

“The levels of residential development have just been growing every year for about 30 years. Our members all have population growth rates generally above 3% per annum and the national average is 1.2% per annum. Some of them are up to 8 or 9% per annum,” she says.

“The crux of our alliance is trying to convince state and federal governments to invest in where people are actually moving to.

“When people move to a greenfields development on the urban fringe there are no medical and education services, there is no public transport.”

However, Ms Clark says research is clear people want their own home on their own block of land in suburbia.

“Australia’s not going to stop growing population wise, so we also need to actually make areas currently not seen as well located, into well located. We need roads, public transport, schools, hospitals, employment centres. All those things that exist already where the government wants to increase density.”

CoreLogic’s Eliza Owen says the shift from inner city to outer fringes may be reflected in a recent acceleration in rental values, which on average have been strongest about 30-40 km from city centres.

“That’s one indicator of migration, and rental demand is usually relatively responsive to migration trends,” Ms Owen says.

Research by the National Housing Supply and Affordability Council – independently advises the federal government – shows workers are increasingly living further from their workplace. It associates this with a lack of affordable housing in cities.

The Council recognises the need for an “ambitious” target of 1.2 million homes, but its six-year forecast predicts a shortfall of 39,000 dwellings, based on new demand versus new supply.

Its May report calls for more well-located housing amid worsening affordability and low supply.

Meanwhile, the Urban Development Institute of Australia says the government’s target of 1.2 million homes is a “big task”.

President Col Dutton says Australia is currently building about 170,000 dwellings in a standard year, 100,000 of which are greenfield sites.

“To accelerate from 170,000 to 240,000 a year from July is a big, big task,” he says.

To hit the target, Mr Dutton says planning approvals and infrastructure will need to be coordinated, and building costs need to stack up.

He believes the $3 billion in federal incentives to the states should focus “at the very front” of the process to reduce bottlenecks when planning new supply.

While the government’s aim is to create ‘well located’ homes in established areas where services and jobs already exist, this is also where historically it’s more costly to develop, and community opposition to development can be a factor, Mr Dutton says.

“Building has increased, in some locations, over 50% in cost,” he says.

“In the last couple of years, with the cost of construction and anything going vertical – and cost of borrowing money to actually develop it – it’s really put a choke on the amount of ‘missing middle’ or infill development that can be developed.”