[Last updated September 2011, first posted April 2010]
How much is Melbourne sprawling? Is urban densification happening? I thought it worth looking at ABS population data to find out.
While this isn’t transport data, urban growth has obvious impacts on transport demand and mode share.
Population growth
The first chart shows net annual population growth by regions of Melbourne (see below for definitions of regions and note that the areas have different sizes).
As you can see, Melbourne’s population growth accelerated dramatically in recent years, although it eased to 2.0% growth in 2009-10 (down from 2.5% in 2008-09). There were a net 79,014 new residents in 2009/10, an average of about 1500 per week.
The chart also shows a dramatic switch in 2010 from urban consolidation in established areas to growth on the fringe. Probably a record annual number of new residents settled in the growth areas, while population growth was down significantly in established areas of Melbourne. This bucks a trend between 2005 and 2009 of higher rates of urban consolidation in inner, middle and established outer areas.
Perhaps this partly explains the slowdown in public transport patronage growth in 2009-10 (more population growth in car dependent areas).
The chart below shows that the growth areas are now taking 58% of new residents, a level not seen since 2004. This is a significant deviation from the aims of the (now defunct) Melbourne 2030 strategy. More on that further below.
Note that not all greenfields sites are in outer growth areas – the “outer” areas also include some smaller greenfields developments.
Growth compared to forecasts
The Victorian government periodically makes projections of population growth in all local government areas (LGAs). The following chart shows the ABS population estimates exceed both Victoria In Future (VIF) forecasts made in 2004 and 2008.
Growth in dwellings
Data on dwelling approvals is published by the Department of Planning and Community Development.
The following chart shows a spike in dwelling approvals in 2009-10, after three years of tracking just below VIF 2008 forecasts.
Impacts on household sizes
The following chart shows the ratio of population growth to dwelling growth. In 2008-09, there was one new dwelling approved for every 3 new residents, but this dropped one new dwelling for every 2 new residents in 2009-10 thanks to the surge of dwelling approvals in 2009-10. Earlier in the decade, the ratio was one dwelling for every 1.5 new residents.
The chart also shows the VIF 2008 forecast of average household size (of occupied dwellings), and forecast ratio of population growth to dwelling growth. The forecast was for slowly declining average household size (following a recent trend).
Until 2010, population growth outstripped dwelling growth which would suggest that actual average household sizes have been forced upwards. Given the surge in dwelling approvals in 2009-10, maybe the housing “crisis” has eased?
Curiously, the ratio of new residents to dwelling approvals was only 1.5 in the early parts of the decade, much lower than average household sizes. Does this reflect small dwelling sizes approved in those years, or a housing glut? I’ll leave that to the housing experts.
Note that not all dwelling approvals represent an increase in available housing stock for permanent residents. The RBA has estimated that around 15% of dwelling approvals replace demolished dwellings, and around 8% are second homes or holiday homes.
Measuring progress against the Melbourne 2030 urban consolidation target
Melbourne doesn’t have population targets for different regions, but there was a target for dwellings growth in the now defunct Melbourne 2030. It stated the aim to:
reduce the overall proportion of new dwellings in greenfield sites from the current figure of 38 per cent to 22 per cent by 2030
The greenfield sites in Melbourne 2030 were mostly (but not entirely) located in the designated growth areas. As “greenfields” dwelling approval data isn’t readily available, I have used dwelling approvals in the designated outer growth LGAs as a proxy (from DPCD’s Residential Land Bulletin).
The dashed red line is a straight line interpolation of the Melbourne 2030 target for greenfields dwelling share. The outer growth LGA’s share of dwelling approvals has been higher than the target, but fluctuates a fair bit, and curiously has been taking a dive since June 2010.
The Melbourne 2030 target share of dwelling growth in greenfields areas is not being met, at least as a share of much higher than forecast population growth.
(Note: The growth LGAs’ share early in the decade was much lower. This may reflect urban growth that was still occurring in areas I have classified as “outer” (as opposed to “outer-growth”) before the Melbourne 2030 plan was released in 2002.)
However, if you look at absolute volumes of population growth in established areas, the story is very different. The next chart shows the VIF 2004 forecasts for population growth by region (I use VIF 2004 because it came out soon after Melbourne 2030):
Urban consolidation in Melbourne has vastly exceeded the VIF 2004 forecasts, even with the slowdown in 2010, as the following chart attests:
I cannot comment on whether the 2004 forecasts were too conservative.
Unfortunately the available data doesn’t tell us whether this urban consolidation has occurred in designated activity centres, or it is spread throughout the urban area. Changes in population density as measured by the census would illuminate this topic in more detail – although the last census was 2006, early in the consolidation trend (and census districts boundaries regularly change size).
Appendix: Definitions of regions
I have allocated local government areas to regions as follows:
Centre = Melbourne, Yarra, Port Phillip
Inner = Hobsons Bay, Maribyrnong, Moonee Valley, Moreland, Darebin, Banyule, Boroondara, Stonnington, Glen Eira, Bayside
Middle = Brimbank, Manningham, Whitehorse, Monash, Kingston, Greater Dandenong (all but one in the east)
Outer = Nillumbik, Maroondah, Yarra Ranges, Knox, Frankston, Mornington Peninsular (all in the east and south-east)
Outer growth = Wyndham, Melton, Hume, Whittlesea, Casey, Cardinia
Here is a map of Melbourne with the regions shaded (dotted white are indicates within the 2006 urban growth boundary, sorry the colours don’t match exactly).
Here is a reference map for those unfamiliar with Melbourne LGAs. You’ll need to click to enlarge so you can read the text.
Hi Chris, good analysis as usual.
Those figures for dwelling approvals versus population growth are particularly interesting. Something’s going on here, though I’m sceptical that it really means household sizes are escalating rapidly and defying the trend established over decades. I think we need to consider a couple of alternative explanations:
1. The time lag between dwelling approval and dwelling construction. The change in the relative numbers pre- and post-2005 might partially reflect a surge in planning approvals prior to 2005, for dwellings that were only occupied later. (I seem to recall there was a severe labour shortage in the construction industry around that time.) It’s not unreasonable to expect that speculative property developers might obtain approval for dwellings in a low-growth period, then on-sell or hold the development sites until the market picks up.
2. Prior to 2005 there was actually a lot of underutilised real estate in established parts of Melbourne. Go back to 2004 and you can read stories about high vacancy rates for inner-city apartments, with landlords having to bribe tenants with movie tickets or car parking vouchers. Doubtless those same apartments are all occupied now. Similarly, a lot of middle suburbs established in the postwar era were seeing a population decline prior to 2005, which would have meant quite a few vacant houses. Lastly there’s the possibility that a lot of inner-city terrace houses being used as business premises have been at least partly converted back to residential use in response to rising rents.
Census data shows average household sizes in Melbourne declining steadily from nearly 2.7 in 1991 to just over 2.5 in 2006. So what your data appear to suggest is that dwelling approvals a decade ago were proceeding at a rate faster than actually required to accommodate the population (probably through a combination of speculative development and replacement of housing stock), but that now the two are moving together with population growth the main driver.
Hi Chris,
Great analysis.
I am not very familiar with Melbourne. Could you please explain how do you define established area?
Thank you!
Regards,
Grace
Hi Grace,
Thanks for the feedback.
By established areas, I mean any LGA that is not a designated outer metropolitan growth area (“Outer growth” in the lists of LGA at the end of the post).
I’ll try to update this post with a map showing designations for each LGA soon.
New map showing regions now added.
[...] these region definitions are quite different to those used in another post on urban sprawl and consolidation which had larger “inner” and “middle” [...]