Regional Australia Institute study warns of city pain if sprawl continues

Congestion and rising house prices will hurt Melbourne’s outer suburbs as the city’s population booms, but new figures show more of us would benefit from a tree or sea change.

Melbourne’s outer suburbs will suffer surging congestion and rising house prices if population growth isn’t spread to regional Victoria, a new report has warned.

Analysis from the Regional Australia Institute has found decentralisation will tap the brakes on rising house prices and commuter distances in the urban fringe.

It revealed that if population growth was left uncontrolled, house prices in the outer suburbs would jump from $776,276 in 2016 to $834,699 in 2056 — 10 times the average annual income.

But prices would be kept to $813,909 — more than $20,000 cheaper — if up to 2.1 million people were instead spread to regional centres.

Commuting distances and congestion will worsen with population growth, a new report has warned. Picture: Andrew Henshaw

Commute distances from the outer suburbs to the CBD would also be limited to 23.9km, instead of blowing out to 28.1km.

Regional Australia Institute co-chief executive Kim Houghton said proper planning would naturally draw people from Melbourne into regional areas.

“We are quite good at planning around the cities and there is good infrastructure in the pipeline, particularly in Victoria, to address problems in the outer suburbs,” he said.

“But we haven’t thought as ambitiously about our regional centres.

“There will be a succession of decisions over the next five, 10, 15 years that lay out a road map for where population growth happens.

“We choose these futures by choosing how to plan and where to invest.”

Dr Kim Houghton has called for more action on decentralisation.

Melbourne is on track to hit “megacity status” with its population tipped to reach 10.2 million by 2056 with the outer suburbs predicted to more than double.

The institute warned that Melbourne had already hit its peak for “agglomeration benefits” — the perks of having a large population — and the city would soon be slammed by congestion and the rising cost of living.

Its analysis modelled three scenarios — one in which it was “business as usual” and another where population growth was spread to Geelong, Ballarat, Bendigo and Latrobe.

The third “highly ambitious” scenario diverted up to 2.1 million future residents from greater Melbourne to those regional cities, as well as Shepparton, Warrnambool and Albury-Wodonga.

Regional towns, including Rupanyup, are trying to attract residents. Picture: Jason Edwards

State and federal governments are being told to free up more greenfield and brownfield sites in regional centres, while “constraining” the urban sprawl.

The institute has also called for better regional infrastructure, particularly fast rail that connects regional cities to Melbourne and can increase property value and boost business investment.

Planning by the state and federal governments is currently underway for a bullet train that could cut travel times between Melbourne and Geelong to as little as 32 minutes.

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A campaign is also needed, the institute said, to spruik the benefits of regional Victoria’s job opportunities, “10-minute commute” and wages comparable to outer Melbourne but significantly cheaper houses.

“At the moment, there is a perception that Melbourne is number one but it would be nice to balance that view with the benefits of living in regional centres,” Mr Houghton said.

“Everyone should consider spending a bit of time — five years — in a regional centre because the lifestyle benefits are very strong.”

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