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Is Melbourne’s rapid development affecting its liveability?

Melbourne’s skyline is rapidly changing as growing numbers of high-rise apartment towers spring up in its inner city area to house its ever increasing population.

February 23, 2018

Melbourne’s skyline is rapidly changing as growing numbers of high-rise apartment towers spring up in its inner city area to house its ever increasing population.

The Australian city is moving into the fifth year of its construction boom – with 13,500 extra apartments set to be jostling for space in its Central Business District (CBD) by 2021. In 2017 alone just under 8,000 apartments were completed although numbers are expected to tail off this year.

Nevertheless, the city’s supply of apartments remains in line with demand for housing from both international and domestic migration. “Melbourne has had an extraordinary residential development cycle over the four years yet residential vacancy remains low and rents and apartment prices remain robust,” says Annabel McFarlane, Director, Strategic Research, JLL Australia. “Melbourne apartment prices are still 40 percent cheaper than Sydney.”

For many of the new residents Melbourne’s appeal lies in its liveability; for seven years running, it’s taken the title of the world’s most liveable city in the annual Economist Intelligence Unit’s (EIU) Global Liveability Index. Its particular strengths are in its stable economy, healthcare, culture and environment, education, and infrastructure including its all-night public transport.

The city also serves as Australia’s premier higher education hub with an estimated 270,000 students, of which more than a third are from overseas. And all need somewhere to live.

Amid growing numbers of people – JLL’s research shows that the state of Victoria leads Australia in terms of population growth with around 144,000 residents moving in every year – the city is adapting accordingly. Centralization has been a key theme of Melbourne’s CBD office market over the last decade as businesses see the amenities of the CBD as way to retain and attract talent; now, as more people move in to live in the center, businesses are starting to look elsewhere.

“Melbourne will get denser as many underutilized sites are being redeveloped or have development permits,” says McFarlane. “Some CBD precincts such as parts of Flagstaff and Southbank are changing in character and becoming residential in focus.” To date businesses that have moved out of these precincts have been able to remain in the CBD but as growth continues they may soon be looking further afield.

Pushing back against development

As the city expands upwards and outwards, the challenge is on to maintain Melbourne’s high quality of life while preserving its open spaces and historic laneways.

“This will certainly be one of the biggest challenges facing the city in the coming years,” concurs McFarlane. “It will be critical that best practice and design standards are used for future development. The denser that Melbourne becomes, the more it will need to focus on maintaining its greenery and laneways.”

She points out that larger office and mixed use projects are already incorporating additional green spaces. For instance, CBUS’s Collins Arch will have a green open area retail precinct; Melbourne Quarter will include the Melbourne Skypark providing 2,000 square metres of public open space and the OSK mixed use development in Southbank features a new 3,700 square meter public park.

Enhancing regeneration and infrastructure

New infrastructure to improve connectivity between developing areas and to help residents get around the city in their daily lives is also key to Melbourne’s ability to retain its liveability credentials.

“New infrastructure is essential to ensure the city’s continued appeal to residents and businesses over the next decade, but whether the three major projects – Melbourne’s Metro Rail, West Gate Tunnel Project and 50 Level Crossing Removal Project – will be enough to cope with Melbourne’s growing population is the subject of much debate. For example, it is clear that further infrastructure will be needed to activate some alternative precincts. Fisherman’s Bend will need rail as well as tram to become a successful precinct for the majority of future office occupiers,” says McFarlane.

Yet the focus is not all on new developments; it’s also about protecting existing areas of the city. The city authorities are also seeking approval for heritage controls for about 100 buildings and two laneways in the heart of the CBD to make it more difficult for developers to redevelop or alter these areas.

“And as older areas of the city continue to age, sensitive regeneration will be necessary to maintain Melbourne’s reputation for liveability, says McFarlane.

Regeneration, however, could prove tricky for a city still trying to find a balance between development and civic needs.

“For Melbourne to continue to be a place where people want to live and work, it needs a steady pipeline of new development but it also needs to maintain and preserve many of the buildings and spaces that are a key part of its heritage and make it the unique, highly liveable city it is today,” concludes McFarlane.

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