Who lives in the city centre?

Key demographics, 2006 Census, Melbourne's Core and Inner City

There’s so much misinformation being put about lately regarding apartments and city centre living that I thought it would be timely to put some basic facts on the table. Fortuitously, I recently came across a paper by two academics from the School of Geography and Environmental Science at Monash University, Maryann Wullf and Michele Lobo, published in the journal Urban Policy and Research in 2009. It’s gated, but the tables I’ve assembled summarise most of the salient findings.

The authors examine the demographic profile of residents of Melbourne’s Core and Inner City in 2001 and 2006 and compare it against Melbourne as a whole i.e. the Melbourne Statistical Division (MSD). They characterise the Core as “new build” (60.6% of dwellings are apartments three storeys or higher) and the Inner City as “revitalised”.

The Core is defined as the CBD, Southbank, Docklands and the western portion of Port Phillip municipality i.e. Port Melbourne, South Melbourne and Middle Park. They define the Inner City as the rest of Port Phillip and Melbourne municipalities, plus Yarra and the Prahran part of Stonnington municipality. So what did they find? (but let me say from the outset that the implications and emphasis in what follows is my interpretation of the data, rather then necessarily theirs).

A key statistic is that the share of Melbourne’s total population who live in the Core is extremely small – just 1.7%. So however interesting the demography of the Core might be, it represents just a fraction of the bigger picture and accordingly we need to be very careful, I think, about assuming what goes on there reflects what the other 98.3% of Melburnians think, want or are doing. And the same goes for the Inner City, which has just 5.9% of the MSD population.

When the authors looked at the age profile of the Core they found it is astonishingly young. The proportion comprised of Young Singles and Young Childless Couples is an extraordinary 44.0%. The corresponding figure for Melbourne as a whole (i.e. the MSD) is 15.1%, or about a third the size. And just to emphasise the point of the previous para, note the Core has 26,486 persons in these two categories, whereas the MSD has 542,481.

Households in the Core also tend to be small with only 21.6% having children. In comparison, the MSD might as well be another country – the corresponding figure is 53.3%. Unfortunately the researchers don’t break down the large Young Singles group by household size, but given the predominance of apartments in the Core, it’s a fair bet they tend to live in one and two person households.

I expect it will surprise many to see that Mid-life Empty Nesters make up much the same proportion of the population in the Core (and Inner City) as they do in the MSD. They’re also a small group – they account for just 8.3% of the population of the Core and hence their impact on the demography of the city centre is really quite modest.

But it probably won’t surprise anyone that Core residents are far more likely to occupy Professional or Managerial occupations and to earn more than $2,000 p.w. than Melburnians as a whole. Or that the median rent in the Core is much higher than in the MSD (or the Inner City for that matter). The Inner City is a traditional location for renters and 45% of households living there rent privately, much the same as the figure for the Core (48%), but well in excess of the 19.4% figure for the MSD.

What’s very interesting though, is the relatively high proportion of Core residents who earn less than $500 p.w. This low income bulge might partly be due to the high proportion of public renters in the Core, but the authors attribute it mainly to the high proportion of foreign students living there. This interpretation is supported by looking at the composition of in-movers over the 2001-06 period. In the large Young Singles category, a whopping 54% of in-movers to the Core were from overseas. The corresponding figure for the Inner City is 38%, so young ‘migrants’ are biased to the Core.

Net migration, 2001-06, Core vs Inner City

The researchers also looked at net movements over the period i.e. in-movements to the Core minus out-movements (see second exhibit). This reinforces the earlier findings. Young Singles and Young Childless Couples together accounted for 73.0% of population in the Core in categories that recorded increases. Other households without children – older singles, Empty Nesters and Retirees – made up a further 17.6%. The number of Young Couples with Children was the only category that went down.

The second exhibit also shows a remarkable difference between the Core and the Inner City. The trend in the latter region is strongly biased toward people younger than 44 years. The Core, on the other hand, made absolute gains in all categories except, as mentioned above, Young Couples with Children (notwithstanding that it was still heavily biased toward younger singles and couples without dependents).

Thus living in the Core is an attractive option for one and two person households without dependents. Young singles are a particularly significant part of the market, especially overseas students. Rents are very high compared to the MSD. On the other hand, households with children positively eschew the Core.

In my view, Wullf and Lobo’s research tells us we should be very careful about assuming the living patterns in the Core offer a template for how to manage growth in suburban Melbourne, especially in Growth Areas. If nothing else, it would be wise to keep the Core’s miniscule 1.7% share of MSD population front-of-mind and to note that even combined, the Core and Inner City have less than 10% of Melbourne’s population.