The 2016 Urban Development Program Report provides an updated analysis of supply and demand for residential and industrial land across metropolitan Melbourne.
The past five years have seen historically high housing growth throughout Melbourne's growth areas and established areas, with dwelling approvals averaging approximately 48,000 dwellings per annum. Data on lot construction in growth areas and development intentions in established areas collected in this year’s UDP suggests that high numbers of new dwellings will continue to be developed throughout Melbourne.
Major Residential Redevelopment
As at July 2016, there were 247,000 dwellings identified for future development in major residential redevelopment projects (sites yielding 10 dwellings or more). This is the highest number of dwellings planned for major redevelopment projects since comparable data became available in 2002-03.
The vast majority (84%) of dwellings proposed for major redevelopment sites are expected to be built in buildings of 4 or more storeys. Melbourne’s inner suburbs as well as the inner north and east are expected to see the greatest redevelopment activity.
The number of dwellings proposed in major residential redevelopment projects within activity centre boundaries continues to grow; from 45% in 2004-05, to 62% in 2015-16.
A record 55,000 dwellings were approved for construction in Metropolitan Melbourne in 2015-16 (37% apartments, 18% townhouses and units and 55% detached dwellings).
Broadhectare Residential Development
There is a potential supply of 372,400 lots for future residential broadhectare development. Nearly all of these lots are in Melbourne’s growth areas.
Based on identified land supply and Victoria in Future 2016 input data, as at July 2016, Melbourne's growth areas collectively have an estimated 25 years or more of total broadhectare residential land supply with the exception of Casey-Cardinia (23-24 years) and Whittlesea (16-17 years). This includes both land with an approved precinct structure plan as well as broadhectare land the still requires approval.
Of this supply, 203,000 lots (12-13 years supply) is 'development ready' (i.e. either zoned for residential use, or having an approved precinct structure plan).
During 2015-16, nearly 19,000 broadhectare lots were constructed in Melbourne's growth area municipalities. This is the highest level of broadhectare lot construction recorded since comparable data became available in 2002-03. There were an additional 15,000 lots identified as 'under construction' as at July 2016, indicating continued high levels of lot construction in 2016-17.
The size of new residential lots continues to decrease with three quarters of all lots constructed in Melbourne's growth areas in 2015-16 below 500 square metres.
While there is a significant supply of development ready broadhectare lots across metropolitan Melbourne, Whittlesea has around 4-5 years of approved lot supply. With the pending approval of further precinct structure plans this will increase.
There are 25,860 hectares of industrially zoned land across metropolitan Melbourne of which 6,870 hectares is vacant. Two thirds of the vacant industrial land (4,520 hectares) is located within State Significant Industrial Precincts (SSIP).
In 2015-16, consumption of industrial land in metropolitan Melbourne reached 298 hectares. This is the first time since the Global Financial Crisis (GFC) that industrial land consumption has reached the same levels (averaging 300 hectares per year) experienced prior to the GFC.
The West SSIP has the highest annual average rate of industrial land consumption at approximately 80 hectares per annum, followed by the South SSIP with an annual average level of consumption of 45 hectares per year.
The South SSIP has the smallest amount of vacant land of the SSIPs with 674 hectares. In comparison the West SSIP has 1,857 hectares.