Are these really the most (and least) liveable suburbs in Melbourne?

Liveability index for 314 Melbourne suburbs (from The Age)

I never read those glossy magazine inserts in The Age (who does?) but on Friday I made an exception for The Melbourne Magazine because it promised to tell me “the most liveable suburb in the world’s most liveable city”.

The Age’s Our liveable city project ranks the “liveability” of 314 suburbs from top to bottom and claims to reveal “Melbourne’s best suburbs, the ones improving the most, and where you should buy your next home”.

Liveability is defined initially as “the general quality of a place that makes it pleasant or agreeable for people to reside in”. Fortunately, someone saw that was a tautology and wouldn’t be of any practical help. So liveability is subsequently defined by 13 measurable criteria.

These cover topography, traffic, crime, cultural facilities and parks, as well as proximity to a range of amenities – the CBD, beaches, public transport, schools, restaurants and shops. Scores out of five on each criterion are added to give an overall summary score for each suburb. Each suburb is subsequently ranked from 1 to 314 on an Index of Liveability.

Unsurprisingly with this sort of exercise, there was a lot of criticism from readers, with many pointing to apparent anomalies in the rankings. One said, “once I saw Footscray was rated higher than Middle Park I stopped reading”.

Disagreement is inevitable. People are different and so it’s hard to get consensus on just what does, or doesn’t, make a place liveable. That shouldn’t be surprising – an elderly couple, for example, is likely to have a very different definition of liveability to that of a young single. Throw in further differences, say in education, income or ethnicity, and it gets much more complex.

There is a much more straightforward and reliable way of establishing the relative liveability of suburbs. That simply involves measuring what people are prepared to pay to live in them i.e. property prices. It doesn’t require complex measures and weights (not that The Age bothered with the latter). In fact it sidesteps entirely the hardest and most intractable question of all – defining apriori just what liveability is.

Moreover, it provides a clear ranking and allows us to measure the size of the difference between suburbs. And it’s based on the actual decisions of hundreds of thousands of householders. Knowing that the average property value in South Yarra is three and a half times higher than in Hallam is a much more useful and valuable piece of information about the relative merits of the two suburbs than knowing one ranks 350 places ahead of the other on the Index of Liveability.

There’re distortions in the market so property values aren’t a perfect representation of the relative liveability of Melbourne’s suburbs. I would argue however that this approach involves infinitely fewer compromises than the methodology used by The Age. Of course it wouldn’t make a very interesting story when there’s the option available to the newspaper of bringing some “science” to the issue.

That’s not to say exercises like the Index of Liveability don’t have value. They can be useful to establish just why residents think one suburb is more liveable than another. Knowing why properties average $1,300,000 in South Yarra and $369,000 in Hallam would be very important information for policy-makers.

Interpreted this way, I think The Age’s attempt is actually better than many of the commenters are prepared to concede (even though I’m annoyed that very little information about the methodology is disclosed). You can argue the toss at the margin – for example, I suspect proximity to schools only matters in the case of certain institutions – but by and large the criteria are a reasonable compromise.

Even so, the project does have flaws. One is the questionable assumption that all criteria are of equal weight. This is highly unlikely even in terms of the way The Age conceived of the project. Had it sought to explain why property values differ between suburbs, the differences would’ve been very important, as the objective would’ve been to understand the relative contribution of each of the thirteen measures.

The key shortcoming, though, is simply that The Age tries to infer way too much from the data. The level of measurement just isn’t fine enough to discriminate between 314 suburbs, much less rank them cardinally.

For example, one of the compromises the researchers make is to measure proximity to various amenities from the centroid of each suburb, not from each house. Using the centroid is a common simplification made by researchers and that’s OK for measuring proximity to the CBD, but it’s problematic for measuring access to local amenities and facilities, especially with a polygon as large as a suburb. Researchers tend to limit their inferences to aggregates, not individual suburbs. They also tend to use smaller polygons – for example, the traffic zone layer for Melbourne has over 2,000 zones.

Despite its flaws, I think the Index of Liveability captures the general direction of differences across Melbourne, particularly at the extremes. Proximity to the CBD seems very important (although that’s partly because this measure “double counts” others like proximity to public transport). It’s just that it doesn’t even come close to delivering on the claims the newspaper makes on its behalf.

10 Comments on “Are these really the most (and least) liveable suburbs in Melbourne?”

  1. Matthew says:

    South Yarra is the most liveable. There’s some dick on Caroline Street/Avenue? who burns wood to heat their house and as I walked past it each morning I hated him/her. What a selfish bastard. The most liveable suburb surely would have fresh, clean air.

  2. rohan says:

    yes it was annoying, rating access to bus the same as train even if only runs every 40mins, and and using areas that varied wildly in size, and giving same weighting to hillyness as distance to schools, though as I was reading I was thinking, ‘well there’s really no completely objective way of doing this’, but then got more annoyed still ‘cos they then went on to only interview people in live-able age-reading suburbs, except for the retired couple in somewhere I havnt heard of that appears to have an unusually large number of eating places for its area. Im still keeping it for the info that does appear though. Then compare with the latest census date when it comes out.

  3. Peter Parker says:

    Even if there was agreement on what is considered ‘good’, the thing that stuck out for me was the existence of adjacent suburbs with greatly varying ratings. Eg Ormond being so much better than Bentleigh, or Edithvale far outranking Chelsea.

    There’s a bias in that gritty inner suburbs like Braybrook score well vis a vis ‘respectable’ suburbs in the east. But even if you compare outer to outer there’s some oddities. For instance Berwick (with its train, private and selective schools, main street shopping, leafy streets in the old part) would surely far outrank remote Truganina, but it doesn’t.

    Then there’s scale – and this overlaps with walkability and the ‘8 year old test’ mentioned. Even within the same suburb there’s big differences. Especially in coastal areas like Mentone, but also for suburbs like Heidelberg and Ivanhoe (both east-west differences but opposite to one another). There would be many cases where variations within suburbs may exceed most variations between them.

    Abandoning suburbs and using a sufficient number of districts in which no street is more than 15 min walk from any other may fix this problem. But that’s less marketable for headlines – as suburb names resonate more than artificial areas.

    What about house price? This seems to be based on a perfect market – and it probably is better than the method used. A problem here is that this is affected by composition of housing stock – eg an area with lots of student apartments might score lowly (though it might actually deserve). And even with houses block sizes vary between Richmond and say Templestowe, so land price per metre would, I think, be fairer if you were to use this method. It should not be too hard to get this data – the councils would have rates info including site value for each rateable home.

    Another possibility is income, with allowance for household sizes etc. This assumes that those with highest disposable income want to live in the best area they can afford, with choice diminishing for those further down the tree.

    However neither allows for imperfect markets – ie that offer high liveability relative to what they cost (and vice versa). These are highly prized by the savvy owner occupier wanting to get the most standard of living for their dollar, or the investor looking for capital growth from ‘undervalued suburbs’. Plus they make for more interesting news – and to quote a rival paper ‘news you can use’.

  4. Interesting thoughts Alan. I question the validity of using just house prices to measure the liveability of a suburb though. A decent portion of a house price comes from the “prestige” of the area. It could be argued prestige is a result of liveability, but I’d argue that prestige usually lags liveability for a good while. Additionally measuring just prices ignores dwelling sizes.

    I would consider Toorak no more liveable than Hawthorn, yet according to the median house price in Toorak is $832,000 more than the Median house price in Hawthorn (this is measuring houses, not units). The two key factors that would undoubtedly contribute to Toorak’s higher prices would be the size of houses (or more accurately in Toorak’s case mansions); and the prestige associated with living in the suburb of mansions. Other liveability factors might play a part, Toorak is slightly closer to the city, but the differences can hardly explain the massive discrepancy between median house prices.

    • Alan Davies says:

      I’m not taking a fixed line on the precise way of measuring it, i’m just saying the indicator ought to be property prices.

      I think the prestige of a suburb is a component of liveability for some, possibly even many, people. Those Toorak people like to live with other Toorak-type people and to be sure non-Toorak-type people are kept at bay. A way of maintaining that liveability (exclusiveness) is having a large average size of lot/home i.e. mansions.

      I don’t think this component of liveability is confined to Toorak snobs, either. Lots of people feel their quality of life would be diminished if they lived next door to certain other types of people. Look at all those problems Rudd had with his GFC-response social housing program

  5. Simon says:

    How about housing price per square metre?

  6. Oz says:

    Average accommodation cost (rent) is one sensible indicator of desirability of a suburb for living in. Another meaningful approach in indicators for living is reflected by taking a quintile distribution of residential rent rates and maybe choosing a ranking based on the middle quintile.

  7. Alan Davies says:

    A great commentary on The Age’s article, focussing on Altona. Daniel Bowen also critiques the article, making the important point that mere proximity to a public transport route doesn’t mean a lot if the service is infrequent and/or has a limited span of hours.

  8. Mark says:

    Absolutely untrue.

    Hallam is a great place to live. I can’t believe it’s being labelled the way it is.

    There’s suburbs in Melbourne that I’ve visited that resemble Compton in L.A (doveton)

    There suburbs that are totally surrounded by factories and plants, depots garbage tips etc and are new estates built on swampland (lynbrook)

    I’m really insulted by the queers who came to conclusion Hallam is the least livable. I don’t understand why.

  9. […] Are these really the most (and least) liveable suburbs in Melbourne? […]

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