Wind back half a century or so and the largely industrial nature of Australia’s economy along with growing levels of car ownership precipitated an urban sprawl which allowed families to own their own quarter acre block in the outer suburbs and still be within comfortable distance of employment, shops and their local community.
Fast forward to 2015 and the economy has changed. Over the past three decades alone, employment in the largely suburban orientated manufacturing sector has dropped by 16 percent whereas that in the professions has grown more than threefold and that in largely city centre based sectors like finance and technology has grown by more than half and more than one-third respectively
Yet the housing market has only partially responded. Whilst non-detached dwelling accounted for more than four in ten new housing units approved for construction in the five years to March 2015 (up from less than three in ten over the same period twenty years earlier), by far the majority of the growth has been in has been concentrated in high rise apartment complexes in CBDs and the inner suburbs.
This, Grattan Institute researchers Frances Kelly and Paul Donegan argued in their recently published book City Limits, underlines a housing market failure whereby aside from inner-city high rise apartments - which may be suitable for single young professionals but are not an ideal environment in which to raise families - the majority of new housing is being built further away from the city centres where many of the best employment opportunities lie. The upshot, they say, is a lack of affordable housing within reasonable commuting distance to employment opportunities, greater traffic congestion, young families being locked out of the housing market, restricted employment opportunities for those forced to live further out and less time spent with family due to increased commuting times.
What’s missing, Donegan told Sourceable, are new housing options in middle suburbs. During his and Kelly’s research, he says a significant portion of those interviewed were willing to trade off the size of their property in order to be closer to family and employment opportunities, and were amenable to alternatives such as townhouses, units or low rise apartments. Yet arduous planning restrictions meant projects in this space were often not worthwhile from the viewpoint of developers and the availability to make these trade-offs was often not there.
Furthermore, Donegan says the market is being influenced by a myth that Australians' housing preferences are largely homogeneous. He says housing preferences are influenced by a number of factors outside of property size, such as proximity to employment opportunities, family members and schools as well as accessibility for residents or visitors of limited mobility and the type of neighbourhood people want to live in. Moreover, he says priorities change throughout varying stages of people’s lives.
“I think there is a tendency to assume that all Australians want the same thing,” Donegan said. “And just like lots of other things that we buy or rent, different people want different things and the same people want different things and different stages of their life."
“The kind of notion that ‘well, the current housing stock is relatively homogeneous and therefore that’s what Australians desire’ - that’s something of a myth."
The latest comments come amid growing evidence that Australians want more housing choice. In an AECOM survey of more than 500 residents in Sydney early last year, for example, 35 percent of those surveyed said they want new types of housing and a greater diversity of housing options. Moreover, an earlier Grattan report in 2011 showed that even as 40 percent of Sydney residents and 38 percent of Melbourne residents listed either semi-detached housing or low rise apartments (up to three stories) as their preferred option given a range of trade-offs, in Melbourne, this type of housing supply accounted for just 18 percent of new construction between 2001 and 2010.
Donegan says solutions revolve around simplifying development processes in middle suburbs.
“Really it is about ensuring that there are less convoluted planning and zoning rules and decision making processes that have a much stronger bias toward giving people housing choice, making housing affordable and increasing the supply to build the reality of the growing population,” Donegan says
“You can do that in a way while keeping high standards. It need not be a free for all. But the process needs to be a lot simpler and done in a way that gives both developers and residents a lot more certainty about what’s Ok and what’s not.”