Is Melbourne Becoming Too Dense?

Market Insights
8 years ago
2 minutes

Australia is filled with pockets where investment flourishes; however, these areas aren't neccesarily attractive to owner-occupiers - why?

Australia is one of the least dense nations in the world - and when you look at each capital city individually, including the likes of Melbourne and Sydney, the density levels are far lower than any other major city around the world.

To put this in perspective, Melbourne currently has 25 people per square kilometre, whereas a city like London is 1,510 people per square kilometre. 

Asian investors familiarise with dense areas as highlighted by Melbourne's vast, rapid and strong growth in the CBD area.

Whilst not as dense as most major capital cities around the world, for Australians, who are used to open spaces and car spaces weren't as attracted by the skyscrappers.

Buyers who chose not to buy in the CBD, were intimidated by the density, whereas those who chose to buy in the CBD were attracted to the dense nature.

For owner-occupiers, and new buyers, not only is the CBD far too dense, but also far too inconvenient for those who own a car, or those who welcome visitors on a weekly basis (parking can be an issue).

However, following a recent report by the Oliver Hume Real Estate Group, Melbourne is slowly morphing into a dense city much like New York and Hong Kong.

Some developers are prioritising the placement of more units in a single tower, rather than spacious apartment living.

Two years ago the average size of a one-bedroom apartment was at aruond 55 square metres, today it is closer to 44 square metres. Two-bedroom apartments were, on average, nearly 70 square metres, whereas today, they measure up to around 60 square metres.

Developers are seemingly prioritising amenities such as large swimming pools, outdoor social areas, fitness gyms and entertainment and cinema rooms.

Many are arguing that there needs to be stricter CBD planning and density laws to prevent and preserve Melbourne's CBD.

A new planning authority/group would work with the Melbourne City Council along with the State Architect on restoring the accountability of CBD planning.