% share of metropolitan population in the inner city at 2001 and 2011 (ABS data)

There’re some interesting takeaways from the latest ABS estimates of population growth released last week. You can get a broad overview from demographer Bernard Salt’s analysis, but I think there’re a few other points pertinent to cities that warrant examination.

For a start, I expect many will be surprised at how small a proportion of each city’s population lives in the inner city. In each of the four largest cities in Australia – Sydney, Melbourne, Brisbane and Perth – less than 10% of metropolitan residents live in the inner city.

Defining comparable areas across cities with big differences in population, geography and housing stock is an inexact science, so I’m going with what the ABS defines as the inner or central city in each case.

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Inner Melbourne, which roughly equates to a 5 km radius around the CBD and stretches out to St Kilda, Prahran, Fairfield and Kensington, has a current population equal to 8.0% of the metropolitan area’s population. Inner Sydney and Central Perth have similar shares, but Inner Brisbane, which includes Bowen Hills, Kelvin Grove, Dutton Park and Paddington, has only 4.7%.

Brisbane of course was always a suburban city. Even historic suburbs like Spring Hill which today are on the edge of the CBD were comprised mainly of detached houses. Although founded nine years earlier than Melbourne, terraces were uncommon in the northern capital.

Another interesting observation is the high rates of growth in the central areas. Inner Sydney and Central Perth both grew by around 23% over the ten years from 2001 to 2011; Inner Melbourne by 32%; and Inner Brisbane by a spectacular 43%. That seems to gel with the high levels of residential redevelopment visible in and around the centres of Australia’s capitals over the last ten years.

However – and it is a big ‘however’ – the inner city’s share of metropolitan population barely increased, as illustrated by the first exhibit. For example, the share of metropolitan residents living in Inner Sydney – which includes Botany Bay, Leichardt and Marrickville – increased from 7.1% to 7.8% between 2001 and 2011. If this glacial trend were to continue, by 2031 Inner Sydney would have 10.3% of the metropolitan area’s population!

Inner Melbourne and Inner Brisbane had similar small increases. In fact Central Perth, which includes Subiaco, Claremont, Cottesloe and Cambridge, actually lost share over the period, dipping slightly from 8.8% to 8.6%. The explanation is simple – the population grew even faster in the rest of the metropolitan area, especially in the outer suburbs.

Clearly the vast bulk of population growth in capital cities took place beyond the inner city. In Sydney’s case, much of it was located within established middle ring suburbs like Auburn, Holroyd, Parramatta and Blacktown. However this wasn’t the case in the other cities.

For example, the second exhibit illustrates that while Melbourne’s middle suburbs added 202,000 people over 2001-11, the outer suburbs contributed a much more impressive 384,000. In fact population grew by a third in Inner Melbourne and the outer suburbs (32% and 36% respectively) but by a mere 9% in the middle ring suburbs. The middle ring’s tardy performance is a problem because it had the lion’s share (62%) of metropolitan population in 2001.

Population in Melbourne 2001 and 2011 by region (ABS data)

Recent research by the Grattan Institute suggests a substantial proportion of settlers in the outer suburbs of Melbourne would prefer a location closer to the centre if it were affordable. They would be prepared to forego space and a detached house in order to avail themselves of a more accessible location.

Yet it is starkly clear from the data that the middle ring suburbs, despite housing most of Melbourne’s population, simply aren’t responding to this demand. They’re not contributing – the necessary apartments and town houses simply aren’t getting built. A key reason is existing residents and councils tend to oppose multi unit housing developments.

The inner city isn’t maximising its contribution either. Most of the growth over 2001-11 took place very close to the CBD. For example, Leichardt, Marrickville and Botany Bay together accounted for just 17% of population growth in Inner Sydney – the rest was located in the City of Sydney (and most of that in the South and West of the municipality).

Not everyone wants to live on the fringe or on the edge of the CBD. Ways have to be found to increase housing supply in middle ring and inner city suburbs. This applies to all capitals but is especially pressing in Melbourne, Brisbane and Perth. The ‘bicycle wheel’ model – where growth is focussed on the hub and rim – is untenable.

I’ve previously discussed various policies proposed to increase housing supply in established suburbs. These include multi-unit developments in activity centres and along transport corridors (here, here and here); infill development (here and here); and redevelopment of disused industrial sites (here).

These are valuable approaches but they’re not delivering supply of new housing on the required scale and on trend aren’t likely to. Other approaches need to be considered. I’ve suggested some, including developing surplus land in large institutions like suburban universities (here); retrofitting existing industrial areas (here); and creating major new suburban activity centres in places like Melbourne’s Clayton (here).

Note: The LGAs I’ve classified as ‘outer suburbs’ of Melbourne are: Mornington Peninsula, Frankston, Casey, Cardinia, Yarra Ranges, Nillumbik, Whittlesea, Hume, Melton, Wyndham.

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Peter Fray
Peter Fray
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