I get many questions as to the next ‘in’ suburb or Melbourne ‘hotspot’ that is just about to take off.
Many experts keep talking up suburbs that are in the growth corridors of Melbourne and those outer suburbs as areas to ‘take off’ in growth in the near future.
I feel some of the next ‘jewel’ suburbs are actually the discovered suburbs but we just haven’t valued them enough, we perhaps haven’t taken into account future trends and how Australian cities will evolve.
Melbourne ranks 8th (some expert’s say 2nd) on the planet in terms of sprawled out cities, what we consider ‘inner city’ for instance would not be classified that way in say New York or Tokyo were these cities are much more condensed.
The Financial Review produced a fantastic article on ‘how cars drive property prices’ and the power of proximity to a properties value.
Cars play an important role in all Australian regions no matter where you are. We are so spread out (Australia) and have the lowest number of people per square kilometre on the planet: cars have been essential to how we’ve all lived since our ancestors were riding on horseback!
Cars have also never been more affordable than now; it takes 32 weeks of an average persons earnings to buy a V6 car compared to 42 weeks back in 1995, there are 705 cars to every 1000 people. The flipside to this as we all know is never before has a car been so expensive to maintain.
Residents in transport rich inner city suburbs pursue 50% of their trips from home by car compared to the outer suburbs which rely on 80% of their trips from home and the gap is widening.
Now consider the above with the fact that petrol prices are at ‘never seen before’ highs and it’s hard to see movement in the downward direction, many argue that peak oil production may have been reached and this translates to further price hikes.
Driving to work and parking in a parking station will cost approx $1000 per month for a city worker.
Congestion is also at its worst so it’s no wonder so many people are riding their bikes to work, bicycle sales hit record highs last year of 1.5 Million units sold and growing while Scooter sales have quad tripled in the past 12 months.
Public transport rose 14% 2003 – 2006 and this is expected to grow at a rapid rate.
Researchers have proven that a one hour threshold exists for workers who commute to and back from work meaning any longer and people can’t do it, this is because we have become ‘time poor’ and work longer hours this number will drop dramatically and this intensifies.
If we could save 2 hours a day in commuting times by living 5 minutes to work, we would be saving approx 10 hours a week to do other things and not pay the high cost of travelling long distances in today’s environment.
The inner city offers not only a great lifestyle that more and more people are seeking but the option to throw away the car keys and the high costs involved. Being close to a massive workforce such as Melbourne’s CBD gives people so many benefits that are still undervalued today.
One could argue (I would agree) that many inner city areas are still great value if you look at what our future cities provide and the ‘convenience’ factor which is ever so important.
Here’s a snapshot of Melbourne & Sydney for its inner suburbs compared to each cities more car reliant suburbs.
South East $293,000
12 Month Change:
South East 9.7%
South West $340,000
12 Month Change:
South West -0.6%
It’s very possible these figures will widen much more especially for Melbourne over the coming years.
It might help to remember this word: proximity