Michael Grochowski on Melbourne’s booming population growth aggravates the housing shortage
Melbourne’s population is growing. At the 2011 census Melbourne had a population of 3,999,982, an increase of 9.7 percent since 2006. By now it will be over 4 million. But the growth is by no means uniform across the city. While the middle band of established suburbs show little movement in population, the big growth is occurring in the outer urban fringe, where new suburbs are being created at a steady rate. The biggest growth centre is in the suburban municipality of Wyndham, in Melbourne’s west. Here the population is growing at a staggering 43.4 percent since 2006. This compares to 9.7 percent for Melbourne as a whole.
The need to house this rapidly expanding influx of people continues to put pressure on the housing stock. The National Housing Supply Council estimates that the total dwelling stock across the whole of Australia increased by only 142,000, or 1.6 percent, over the year to end-June 2011.
The housing shortfall, or gap between demand and supply, increased by 28,000 dwellings over the year to end-June 2011, taking the cumulative shortage since 2011 to 228,000 dwellings.
Compared to other states and cities, Melbourne is faring slightly better in terms of the gap between supply and demand. But the shortage is still significant and this is continuing to put pressure of rental prices.
In 2009-10, 60 percent of lower income private renters faced direct housing costs of more than 30 percent of their income, an increase from 57 percent in 2007-08.
A larger proportion of lower income renters in capital cities faced housing costs of more than 30 (and in some cases, 50) percent of their income than did low income renters outside the capital cities.
The data shows there is a shortage of properties that are not only affordable, also available, to lower income renters. The National Housing Supply Council estimates that there is a shortage of 539,000 rental properties that are both affordable and available for less affluent households, with may lower priced rental properties being occupied by higher income earners.
All in all, the demand for new housing stock in both the growth corridors of Melbourne and in Victorian regional cities will continue to keep developers and the building construction industry busily engaged for decades to come, even despite predictions of gloomy consumer sentiment and stressful employment conditions in some areas.