Do higher travel costs make the fringe unaffordable?

The new art of Cartosimpsonology

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 »