If you think that home buyers in the fringe Growth Area LGAs are predominantly young renters buying their first McMansion, then think again.
Given the brouhaha in The Age today over foreign investment on the fringe, the media might give attention to the finding that 23% of purchasers in these areas are investors. However it is not possible to deduce from the report how many of them live overseas.
But there are plenty of other interesting nuggets of information.
Rather than moving out of rental accommodation and into their first home, most fringe purchasers already own a house. Only 36% are first home buyers. Of the 64% who are ‘upgrading’ from an existing owner-occupied dwelling, a third are buying their third or fourth home.
It is therefore no surprise that the average buyer is not ‘starting out’ on the great suburban journey. Nearly half (48%) of adult buyers are aged 35 years or more. In fact 14% are aged 50 or more.
And while some bought large houses, almost three quarters (74%) purchased a single level dwelling. Moreover, 70% of homes are less than 30 squares and 47% are less than 26 squares. That suggests the great bulk of dwellings are roomy but they’re hardly McMansions. However, small dwellings don’t cut it – even though 12% of buyers are single, only 1% of dwellings are smaller than 15 squares.
The stereotype of people travelling long distances in Australian cities is wrong but persistent. The reality is that most trips are relatively close to home.
For example, the accompanying chart and map show that 52% of all weekday trips (all purposes, all modes) by residents of the middle suburban municipality of Brimbank in Melbourne’s west are made within the municipality. Further, 79% of trips are made either within Brimbank or to contiguous municipalities.
In fact more than 90% of trips by Brimbank residents can be accounted for if just one more destination – the city centre – is added to the list above.
This pattern also holds for the other parts of Melbourne.
More than 80% of trips by residents of Monash, Cardinia and Casey, for example, are likewise made within their home municipality or to neighbouring ones.
While another 8% of trips by Monash residents are to the city centre, the corresponding figure is less for far-flung municipalities – just 4% for Casey and less than 1% for Cardinia (see more charts below).
It thus makes sense to think of a city like Melbourne as a number of regions rather than as a very big, singular entity. In terms of what people physically do within the urban area, there are multiple ‘Melbournes’.
Each little ‘Melbourne’ or region is centred on a home LGA and has a limited ‘home range’. The median weekday trip distance (all purposes, all modes) for residents of Cardinia is 3.7 km. Monash is 4.9 km and Brimbank is 6.3 km.
For the great bulk of residents, metropolitan Melbourne is more of a construct – an idea – than something that has a real presence in their day-to-day lives. With the exception of the city centre, few people venture much beyond their own region.
This limited ‘home range’ is a product of many forces. In the case of the inner city municipalities – Melbourne, Yarra and Port Phillip – the predominance of professional jobs and social attractions in the city centre is an obvious and powerful factor. The median weekday trip distance for residents of Yarra is 2.8 km.
For the great bulk of the population who live in the suburbs, the factors explaining this limited geography would include the suburbanisation of jobs (more than 80% of jobs in metropolitan Melbourne are outside the CBD), slower travel speeds on roads due to increasing traffic and the desire to live close to family and friends.
It’s natural therefore to emphasise the importance of regions and devise typologies like The Age uses in its real estate pages e.g. inner east, outer east. But that assumes a community of interest at the regional level. And it assumes it can be defined within fixed boundaries. Read the rest of this entry »
A common argument is that households who settle on the fringe because housing is more affordable end up worse off because of higher transport costs. They are forced to buy a second or third car and they use more petrol because they have to travel further.
Of course there’s an assumption here – that ordinary families actually could find a suitable dwelling, at an affordable price, in an area where transport costs are significantly lower than they would be on the fringe.
Consider the municipalities of Casey and Cardinia, which together comprise the largest Growth Area in Melbourne. At around 45 km and 55 km respectively from the CBD they are also the most distant fringe growth areas.
The median price of an established house and garden in Casey (Narre Warren) is $350,000. Now compare that with the City of Monash, which stretches between 13 km and 24 km from the CBD. The median price for a house in this municipality is $780,000 (although in Clayton it’s $618,000).
A more likely alternative for a settler in Monash who’s primary concern is affordability would be a unit. However the median price for a unit is $464,000 ($401,000 in Clayton).
Thus the Growth Area has a considerable advantage in price and size – it’s much cheaper and offers a three to four bedroom house with a garden compared to a two bedroom unit. Clearly a Monash location would need to offer a considerable saving in transport costs to offset Casey/Cardinia’s advantages. Read the rest of this entry »