“Metropolitan policy should reinforce this nexus and seek to minimise constraints to new development where such preconditions exist so as to optimise supply opportunities."
Melbourne urban renewal to slow and spread to the suburbs from 2014: Charter Keck Cramer
The City of Melbourne, Southbank and Docklands will continue to be the epicentre of high-density urban renewal projects in Melbourne until 2014, according to a new report compiled for the Property Council of Australia by consultants Charter Keck Kramer (CKC).
However beyond 2014, CKC anticipates that there will be an increased provision of medium-density projects, “particularly across the established middle region, as well as continuing supply of smaller apartment projects”.
The apartment push into the suburbs is already occurring in established middle-region suburbs like Dandenong, 30 kilometres from the CBD, where 43% of construction activity is currently for apartment projects.
Apartment projects account for more than a third (34%) of construction activity in Box Hill, 28% of activity in Footscray and 22% of activity in Sandringham.
CKC says it can be confidently predicted that residential urban renewal supply will slow considerably after 2014, “given the heavy influence of apartments within the urban renewal concept”.
“The evident slowing in the established housing market since 2010, and the more pronounced reduction in off-the-plan apartment sales activity at the same time will translate through to lower future completion levels,” says CKC.
The report anticipates that 421 major residential urban renewal projects (including several multiple stage developments) will be completed between 2012 and 2014.Click to enlarge
The projects are expected to deliver 34,440 dwellings, with 82% of these being apartments, with the higher concentration of supply in larger projects of more than 100 dwellings.
Over this period, about 42% of new apartment buildings will have more than 10 levels, compared with 31% in the construction period from 2005 to 2011.
High-rise apartments will remain concentrated within the established inner-city municipalities.
The report notes that pattern of major residential urban renewal concentrated in the City of Melbourne (including parts of the St Kilda Road precinct), Southbank and will continue to prevail.
However, it notes that though the City of Melbourne will account for a lesser concentration (29%) of overall activity than it has over the recent past.
Stonnington and Yarra local government areas account for the greatest increases in relative supply between the recent past and forthcoming periods. Their shares of overall metropolitan activity will increase by 3 percentage points to 9% each.
The CKC report ranks the City of Melbourne as the top urban renewal LGA from 2005 to 2011 (6,651 apartments) followed by Southbank (2,718 apartments); Docklands (1, 956 apartments, 2026 total dwellings); South Yarra (1,352 apartments) and Port Melbourne (1,070 apartments, 1,183 total dwellings).
In total CKC identified 607 individual major urban renewal projects (including several multiple stage developments) that have been completed between 2005 and 2011, containing 39,355 new dwellings.
The report, Making the Numbers Stack Up, was released in response to Victorian government projections that over the 40 years to 2051, Victoria’s population will increase by 3.2 million to 8.7 million.
Over the same period, Melbourne’s population is expected to grow to 6.5 million, while regional Victoria is projected to grow to 2.3 million.
The report concludes that there is currently “strong alignment between policy and market preferences for supply into locations offering high amenity and transport connectivity”.
“Metropolitan policy should reinforce this nexus and seek to minimise constraints to new development where such preconditions exist so as to optimise supply opportunities and maximise community benefits associated with urban renewal.
“Locations that currently do not exhibit the necessary preconditions to support higher density outcomes must undergo a period of progressive step changes in market conditions and density before apartments can be supported.
“Not every centre, nor every suburb, can be expected to accommodate higher-density urban renewal but those suburbs which have the necessary preconditions (transport, amenity and supportive house price structures) should be expected to provide opportunities for appropriate urban renewal to occur,” says the PCA.
Photograph courtesy of Flickr.