Victoria's independent infrastructure adviser is calling on the state government to fast-track approvals of good-quality townhouses in Melbourne's established suburbs and phase out stamp duty, as part of a plan to create more affordable homes and slow the growth of the city's urban fringe.
Infrastructure Victoria has conducted what it says is the largest-ever survey of housing preferences, asking 6,000 people in Melbourne, Geelong and Ballarat about the type of home they would move to if they were moving today.
It found new home buyers, traditionally people looking to start families, want a three-bedroom house with car parking in an established area near family and friends.
But Infrastructure Victoria Chief Executive Officer, Dr Jonathan Spear, said one in five households said they would trade a detached home in a new suburb for a townhouse or apartment for the same price closer to city centres — if they could find one.
"Our research shows that new home buyers are locked out of inner and middle Melbourne," he said.
"Households on moderate incomes, many of which are families and first-home buyers, are being locked out of Melbourne's middle suburbs, pushing them further away from jobs, schools and public transport, and locking them in to more travel time in the car," he said.
Households on moderate incomes are those earning between $88,000 and $132,000 a year.
Dr Spear said the lack of housing choice was a growing problem, given Melbourne's projected population and the existing pressure on infrastructure in the growth areas.
"For each decade to come we're going to have around a million more people coming to Melbourne, and that's welcome, but we need to plan for it," Dr Spear said.
New home owners priced out of Hopper's Crossing
Larissa Strzadala and Doipayon Halder recently moved from Brisbane to a new estate in Melbourne's outer south-west.
They love the community and the parks, but said they had hoped to be able to buy a home closer to family in Hopper's Crossing.
"We were originally looking at more established areas but we soon realised that basically we were being priced out of the market," Ms Strzadala said.
She said she is reasonably happy with the local infrastructure, especially looking at future schools for their three-year-old daughter, but said there are problems, especially when it comes to transport.
"Traffic is chaos," she said.
"We don't have a bus service that comes up this way just yet, so in order to get to work in the Melbourne CBD we have to drive to the station, so we have to make sure we leave early enough to get a park," she said.
Elizabeth Detering and her partner bought a medium-density townhouse in inner Brunswick last year.
She said she rides a bike most places, including to drop her daughter at school, and to work in the CBD.
"Not being reliant on a car was definitely one of the top values when we were looking at somewhere to buy," she said.
She said she plans to move "eventually", but the house is big enough for now, and close to plenty of good parks.
"We didn't need anything too big — big enough, good enough for now," she said.
She said she would definitely support more housing like hers being made available in established suburbs.
Phase out stamp duty, fast-track quality townhouses as part of plan
The State Government has a long-term plan for 70 per cent of new homes to be built in established suburbs — but Dr Spear said the government was falling short of this.
"Currently less than 50 per cent of homes are being built in established Melbourne," he said.
Infrastructure Victoria has made 10 recommendations to the state government to turn this around, including developing better standards for low-rise apartments, and streamlining the approvals process for homes that meet those standards.
Dr Spear said he was not recommending more high-rise apartments, or changes to heritage planning requirements, as some communities express concern about developments that change the character of their local area.
"What we have identified we think is a very fair balance if making sure there are clear standards of the quality of design and the appearance of townhouses and apartments," Dr Spear said.
"In exchange for that, then an ease in delivering those townhouses and low-rise apartments that we know one in five families would like to have the opportunity to purchase."
Infrastructure Victoria is also calling for a reform of the state's infrastructure contributions scheme, which contains hundreds of millions of dollars in unallocated funding for projects including train stations and bus lines.
Dr Spear said another important reform would be removing stamp duty, which he argued lead people to buy bigger houses than they needed, and the first-home-buyers grant, which the Reserve Bank found was partly to blame for driving up property prices last year.
"Instead of subsidising developers to the tune of about $200 million a year there is a more effective way the state government can support homebuyers through equity investment in properties," he said.
He suggested the state government contribute to the equity of homes, which the home owner could repay over time.
The report also calls for targets for the number and type of new home in each local government area, in conjunction with local councils.
RMIT's Centre for Urban Research Professor Jago Dodson said there was a role for the state government in achieving more good-quality development in established suburbs, especially in enforcing environmental and inclusivity standards.
"The market model has not worked well," he said.
But he said any moves to fast-track development should include consultation with people who live in the local area right from the start of the planning process.
"A one-size-fits-all approach to infill development simply will not work effectively in terms of the way it brings community and local government into the development process."
The Victorian government is releasing the five-year review of its long-term strategy, Plan Melbourne, later this year.
The state government said the Infrastructure Victoria report showed it was important to build infrastructure across Melbourne.
"The report reinforces why the Suburban Rail Loop is so important — we need to deliver more housing and more jobs in areas that are well served by public transport," it said in a statement.
"We constantly review our revenue and planning systems to ensure they are delivering the best value and outcomes for all Victorians."
