Christmas has come early to Melbourne this year – the Baillieu government has opened up a Melbourne sack of goodies and granted the promise of a new suburb in the wilderness of Werribee “East”. In case you think it’s going to end up like one of those other outer-suburban zones, lacking the adequate infrastructure to support the 17,000 new residents, don’t worry! Planning Minister Matthew Guy has promised 50,000 jobs and around $10 billion worth of investment into providing a “new freeway interchange, residential areas, and industry hubs”.
The idea is to move jobs out of the city – keeping them “local” – and a sterling idea it is. All agree that we simply can’t keep everything centralised forever.
Families with children are Melbourne’s biggest buying demographic – they need houses (not apartments) gardens, green areas and local schools. They need community facilities, a local doctor on hand, good public transport systems and nearby shopping centres – and they need it all at an “affordable” price range. Could Werribee East be an answer, I wonder?The Victorian government has got a lot on its plate at the moment. Aside from Werribee East, it is in the process of developing the new Fishermans Bend precinct – our new “high-rise” metropolis, which Guy assures will be more successful than the soulless Docklands, which apparently is still only “half completed”.
The initial rush of investors who bought into the Docklands developments when they were spruiked on the open market some 10 or so years ago were left sitting on a pot of negative equity and expired “rental guarantees”. The suburb still maintains a high vacancy rate (currently 8.3%, according to SQM) and as a suburb lacking in family community facilities (schools, churches, and so forth) it only attracts a narrow demographic of professional couples and office workers, which is one key reason the location lacks “soul”.
The worrying part of Docklands was the way it was initially marketed.
Purchasers bought in buoyed by the promise of a new 220-hectare site made up of: “luxury waterfront living, cafes, restaurants, a state-of-the-art stadium, a high technology park, and many other attractions”.
Financial and property advisers pocketed healthy fees from developers who paid them to push unwitting local and foreign investors into speedy purchases.
It’s not an uncommon practice – many still work under the guise of giving “independent” property investment advice principally marketing off-the-plan and new units – the key difference being, if you’re not paying for the information, someone else is – usually the developer. Hence why ASIC is currently ringing the alarm bells over a new rush of property acquisitions as part of self-managed super fund accounts which all but promise to ‘underperform.’
I don’t have to go into the details of why high-rise developments make poor investments – I have written enough in the past to make it abundantly clear. As the City of Melbourne aptly described on its website back in 2011, most of proposed new blocks are “relatively small one- and two-bedroom apartments largely targeted at the student market and owned by investors”.
And judging from the high vacancy rate, they are doing little to provide affordable accommodation for the home buying or rental demographic. However, in Guy’s own words, high rise is apparently good for the city, as “taller buildings ... are a symbol of a growing nation, a strong economy, and they do have the ability to define a city".
Of this there is no doubt – however, as with many tall buildings, the lights may be on, but all too often no one is home.