Melbourne’s West – set for growthApril 5, 2018 / By
It is clear from recent Federal and State government reports that Melbourne’s West will experience the greatest change of all Australian metropolitan regions over the next 30 years.
Infrastructure Australia’s – Future Cities report looks at the impact of three growth scenarios for Melbourne and Sydney over the next 30 years. According to the report Melbourne’s population will increase by 2.8 million (+63%) to 7.26 million and Sydney’s by 2.65 million (+57%) to 7.34 million by 2046
Based on a balanced medium density growth scenario, infill development within the western sub-region will accommodate 34% of Melbourne’s population growth to 2046. This equates to roughly 900,000 additional people (+120%) or approximately 4% per year and compares to Metropolitan Melbourne at 2.1% per annum and Sydney 1.8% per annum. This will be the most significant change in population of any Sydney or Melbourne metropolitan region.
Rebalanced Medium Density Scenario – Increase in Population by District
Source: JLL Research, Infrastructure Australia
Melbourne’s West has the potential to be the most dynamic property market in Australia in coming decades.
The State Government announced five new Precinct Structure Plans in mid-2017 within the existing urban growth boundary in Melbourne’s West. Approximately 485 ha changed from industrial to residential growth zone at Tarneit Plains (Sept 2017). Providing future growth zone land for both residential and industrial uses and with increasing demand for both will be an ongoing challenge. Residential precincts are encroaching and increasingly surround Melbourne’s western industrial precinct. As a result, industrial land values started rising from a low base in the West in late 2015. For example, Altona, Derrimut and Laverton land values have increased between 23% – 33% over the last three years.
We have also seen residential land sales transaction volumes in Melbourne’s west peak at close to $980 million in 2017 as offshore and Australian developers target future housing demand.
The Western Distributor / Westgate Tunnel project will provide a vital alternative to the West Gate Bridge with completion expected in 2022. In addition, Federal and State government commitments to Inland Rail and VIC Regional Rail upgrade projects (with $1.7 billion secured this month in federal funding) will bring inland rail directly to the Western suburb of Tottenham and improve existing rail networks.
In this context, maintaining Melbourne’s Western industrial precinct is vital. This precinct provides the greatest industrial / logistics capacity closest to the CBD now that City fringe precinct capacity at Port Melbourne is all but exhausted. Infrastructure Victoria’s Container Port Capacity Advice Paper (March 2017) indicates that trade demand in Melbourne will reach around 12 million TEU – or twenty-foot equivalent units – by 2065. The report advises that when the Port of Melbourne (2.5 million TEU today) reaches 8 million TEU in 2055 Melbourne will need a second port and this should be at Bay West in Geelong.
Capacity expansion at the Port of Melbourne and major infrastructure projects further support the case for Melbourne’s West.
Infrastructure Australia report: Future Cities – Planning for Our Population Growth Feb 2018
Infrastructure Victoria report: Second Container Port Advice Discussion Paper March 2017
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