Investing in the Inner City Lifestyle
by Grant Warnes_Senior Property Adviser
The latest ABS figures show that over the past year Sydney’s annual population growth increased by 1.3 per cent, Melbourne’s by 2 per cent and Brisbane’s by 2.8 per cent.
In May 2009, the Domain section of The Age reported that Melbourne is growing by more than 200 people a day. That adds up to almost 1,500 extra people a week, and they all need somewhere to live. Bureau of Statistics figures show that at the present rate of growth, the city will have four million residents by the end of 2009.
This demand for inner Melbourne, Brisbane and Sydney living isn’t something that’s just sprang up out of nowhere over the past five years. It has been increasing on a compounding basis for decades. As recently as 1990 you could walk through the city centres, particularly Melbourne and Brisbane, on weekends and barely see a soul. Those hundreds of thousands who commuted to work throughout the week just disappeared out to the suburbs on the weekend. Now people seem to be everywhere at the weekend. They’re shopping, working, either entertaining themselves or being entertained, and they’re out for breakfast, or lunch, or dinner.
Sydney, as we all know, is different to Melbourne. This is probably because it was founded 70 years earlier than the capital of Victoria, and because the Harbour, the hills to the north, west and south and have restricted expansive development. So the inhabitants were much quicker to accept the move to inner urban medium to high density living. In that respect, they’re no different to many other wonderful metropolises of the world – New York, Paris and London to name just three.
Brisbane, like Melbourne, was better planned by its forefathers and, again like Melbourne, had both the time and the room to expand laterally. But as with nearly every major population base, its people have also embraced the many benefits of inner urban living. Look no further than New Farm, Teneriffe, Southbank, Fortitude Valley and Spring Hill.
It has happened all around the world for hundreds and thousands of years, and this phenomenon will almost certainly continue for our three major cities on the eastern seaboard. So what has brought this about?
An increase in amenities in the inner city
The development of these inner urban locations has created the need for improved facilities, the kind that people want to be close to, like supermarkets, restaurants, bars, cafes, nightclubs and cinemas. And this, in its turn, has created a demand for people. There has also, over the past 10 to 30 years, been the regentrification of areas such as Richmond and Port Melbourne, the inner west in Sydney and the Darling Harbour precinct, and near the city on the river in Brisbane on both the north and south banks of the river. Ever larger numbers of people have been tempted to live within these popular inner city locations.
An increase in the number of single person households
Today, there are more people marrying later in life or not marrying at all, and many others choosing not to have children. There are more separations and divorces than ever before, and we’re all living longer. Our natural human desire for company drives many of these people to be closer to others, to be near the centre of things. Coffee in Kings Cross or St Kilda, or a cheap meal in Paddington, Balmain or Milton or the Valley have the effect of making us feel more a part of the community.
A decline in the average person per household size
Following on from the point above, yet different, is the fact we’re having less children. Household size is decreasing rapidly. It’s estimated in areas such as Richmond in Melbourne that by 2030 the average household size will be 1.55. And Richmond is really no different to many other areas in Melbourne, Sydney or Brisbane. So the provision of medium-to-high density residential property both satisfies demand and creates future demand, and it’s present in all these cities.
Less commuting time equals more time with loved ones
Today, in Sydney, Melbourne and Brisbane, people have grown tired of spending two hours a day commuting to and from work – which adds up to a phenomenal 480 hours a year. People are more interested in spending quality time with their families. So they move closer to their workplace – the weight of commercial governmental, retail and entertainment activity and therefore employment still being in, or near, the city centres.
The balance between renting and home ownership has shifted
An increasing number of people are happy to forgo or delay owning their own home in order to rent a place closer to their desired lifestyle. Others make the financially wise decision to rent a place to live, while investing in other properties in order to build up their wealth.
The point to remember is this:
We appreciate that living in the inner city is not for everyone. Some people prefer to live in the suburbs or regional areas. But that doesn’t affect the fact that demand for residential investment properties in the best inner urban areas of Brisbane, Sydney and Melbourne can utterly be relied on for a very long time to come.
For more information, or to arrange an appointment with a John Hopkins Property Adviser, please contact our Client Liaison Officer on 1300 726 082 or click here.