INTRODUCTION

Melbourne, Australia and the world are changing. Changing demographics, economic downturns, environmental impacts, changing community and social expectations and growth in technology will all affect what is planned and built. Understanding these changes will help us plan and adapt for what Melbourne municipality needs today and in the future.

Information sheets have been prepared to provide a snapshot of the current situation and emerging trends important to the City of Melbourne’s future. These information sheets cover the themes of:

  1. People
  2. Housing
  3. Environment
  4. Lifestyles
  5. Social Inequalities
  6. Economy
  7. Knowledge
  8. Infrastructure
  9. City Governance

Eachinformation sheet is intended to prompt your thinking about these themes and their implications on the future planning for the City of Melbourne.

Acknowledgements

This research report is an update of a paper that was first prepared to provide a new Council with information to support strategic planning and development of the next Council Plan. This update was prepared as a series of fact sheets based around less than ten key issues for the four years ahead. Each sheet addresses three things: introduction, key statistics and implications for the municipality and City of Melbourne. It is intended to provide conclusions or recommendations for actions - it asks questions to stimulatethinking and discussions.

PEOPLE

INTRODUCTION

Between 2008and 2013the Melbourne Local Government Area’s residential population increased by almost 30% (around 26,500 people) to an estimated 116,447people. In the last year (2012-13) our population grew 10% or 11,000 people, making Melbourne City thelargest and fastest growing municipality in Victoria.

While the municipality’s population will grow, our demographic profile will remain similar, in contrast to the trend in Australian and Victorian where households will get smaller, and populations will continue to grow and age. This will test our assumptions about current and future demographic characteristics of our population.

DID YOU KNOW?

  • The municipality’s estimated resident population is approximately116,447 (30 June 2013).
  • In the coming years, the population is expected to grow rapidly at an average annual rate of5.8%reaching a forecastpopulation of over 133,000 in 2016.
  • Unlike Australia and Victoria, Melbourne Local Government Area’s(LGA) population is not ageing and is not expected to age. From 2011 to 2016 the older population is forecast to remain proportionally the same or decline. Median age has remained 28 years.
  • Average household sizes in Australia have remained the same (2.6 people per household) over the past 10 years.In contrast, the municipality’s average household size increased to 2 persons per household and could be expected to remain at that level for the next few years.
  • Australia is experiencing a reversal in fertilitytrends with minor increases in fertility rates (i.e. more babies) while Melbourne City has low fertility rates.
  • Young people and young adults (12 to 35 years of age) comprise the largest proportion of residential population at just over 60% and this is forecast to remain the same in 2016.
  • The areahas become more multicultural since 2006, when 48.5% of the population was born overseas (53.5% by 2011) and almost 39% spoke a language other than English (43% by 2011).
  • The population is more multicultural than the rest of Australia. In the rest of Australia, 26% of the population was born overseas and 19% speak a language other than English at home.
  • More Melbourne City residents were born overseas than in Australia.
  • A large number of international students live and/or study in this municipality.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Population growth and migration

Victoria gained more people from interstate migration (particularly New South Wales) than any other state during the year ending 30 September 2013. This is the highest net interstate migration gain for the state in over 30 years and Victoria has now overtaken Queensland and Western Australia in net interstate migration.

The change in the interstate migration trend is being driven by employment options rather than the traditional driver which is lifestyle. Australians will still migrate to Queensland and Western Australia for lifestyle reasonshowever there is a perception that Melbourne has more job opportunities and more affordable housing.

Demographic changes

While the population continues to grow, it will remain relatively young.The proportionatelylargestresidentgroup will continue to comprise youthful, culturally diverse, tech-savvy, relatively asset poor students (including a significant proportion of international students) and young professionals, often living in single person households and often from an overseas background. This cohort is likely to demonstrate a need for a range of services. They are considered mobile, and likely to live in Melbourne for a short time.

While the population will grow rapidly in the next five years no particular age group will increase its share of total population at the expense of any other. The cohort of older persons will remain around the same size proportionally, at around 10% of the total population by 2016, but their actual numbers are expected to increase from just over 10,000 in 2011 to just over 13,000 in 2016. Similarly, while the number of children of both primary and secondary school ages will increase from 5400 in 2011 to over 9300 by 2016, the proportion of school age children and teenagers is expected to increase only slightly. The number of children under five years of age is expected to increase from 3600 in 2011 to 4500 2016 while the proportion of total population will remain around the same.

The ageing of the national population may have implications for City of Melbourne. Increasedpressure on the productive population of the nation and on government health and social security budgets may in the long term manifest as increased competition for limited government resources, devolution of responsibilities to Local Governments and competition for highly mobile skilled workers. In the future, many 70 year olds could still be fit and healthy and working, commuting to Melbourne municipality. Some of our older residents will remain healthier longer, but others will have high needs for community services.

The large and growing daily population, which includes residents, workers, students and visitors highlights the multiple roles of the municipality in residential, business, tourism and education and hasimplications for regulatory activities and services and prepare for older visitors or workers.

Households

We may need to re-think the conventional wisdom that this city has declining household sizes and how housing needs are addressedby high proportions of one or two bedroom apartments (see facts about household size above).

Although fertility rates are expected to remain low and the proportion of children is expected to remain the same, the youthful and growing resident population is likely tocause anincreasing number of births in the (from 700 in 2007-11 to almost 1100 in 2012-16).Early childhood and other services to meet the needs of parents and children will be in demand.

Services

The growing population will increase demand for services from City of Melbourne, including waste collection and recycling, social, family and early childhood services, public and environmental health regulation(for example,dealing with noise complaints), open space and community facilities.

The increasingly multicultural nature of the municipality’s residential population has implications for the types of social services and community activities City of Melbourne will provide in the future. It will affect the way Council and City of Melbourne involve the public in decision making, for example, how to increase the participation of people from a wider range of cultural backgrounds in local government decision making. Finally, it has implications for how City of Melbourne communicates and promotes to residents.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

HOUSING

INTRODUCTION

Australia’s housing market is still dominated by home ownership, low density development and the separate house. In contrast Melbourne municipalityhasexperienced a boom in flats and apartments over the past 10 years, driven by increasing residential land prices and the market perception of demand for smaller dwellings close to the city.

Housing affordability in Australia is worsening. International research suggests GreaterMelbourne house prices increased faster than income levels. Australian cities are among the most unaffordable housing markets in the world. This pushes low and moderate income households to the outer Greater Melbournesuburbs for more affordable opportunities for first home purchase and renting.

DID YOU KNOW?

  • There has been strong growth in dwelling construction from 2006 to 2012, especially in the Melbourne CBD (37%), Southbank (15%) and Docklands (8%).
  • Between 2014 and 2016 new supply is projected to average 6600 dwellings per year, tripling the ten year average of 2100 dwellings per year.
  • More than 10% of new homes approved in Victoria 2010-11 were built in Melbourne municipality.
  • Over the period 2012-14 Melbourne Local Government Area will account for around 35% of overall residentialurban renewal development activity in Greater Melbourne and will be the largest growing residential urban renewal area in Greater Melbourne.
  • The proportion of flats and apartments increased from 78% in 2002 to 83% of all housing in 2010.
  • The proportion of renters and mortgagees paying morethan 30% of their income on housing declined between 2001 and 2011, from almost 61% to about 53.5%.
  • 7% of private occupied dwellings are social housing.
  • City of Melbourne’s StreetCount shows a slight decline in numbers of people sleeping rough from 112 in 2008 to 101 in 2012.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Housing growth

In November 2013 there were 51 developments under construction, expected to yield around 11,732 residential dwellings by the end of 2016. Eighty-five proposed developments with a total of 15,515 dwellings have town planning approval and could be expected to begin construction within two years. A further 63 proposed developments yielding 17,580 dwellings could be expected to begin construction within three to five years (subject to town planning approval). This level of dwellings growth will drive a relatively high rate of population growth in the coming years (see population facts and introduction under ‘People’, above).

Between 2014 and 2016 new supply is projected to average 6600 dwellings per year, tripling the ten year average of 2100 dwellings per year.Melbourne is the only Local Government Area in Australia that is forecast by the Housing Industry Association to supply sufficient housing to meet forecast demand from residents by 2020.

The City of Melbourne will be involved in at least three major urban renewal projects at different stages of development in Docklands, Southbank and Fishermans Bend (See also Knowledge section, page 15) and E-Gate and City North over the next Council term.

Housing Types and diversity

Analysis of the diversity of the municipality’s housing stock revealed some clear trends and changes over the past six years. While therebeen strong growth in dwelling construction over the past six years, few three or four bedroom dwellings are being developed. Approximately 50% of new dwellings have one bedroom and dwelling size is shrinking with 40% of new dwellings having less than 50m2 of floor space. Around 42% of new dwelling construction is in higher density of 20 levels or more above ground.Finally, more than 90% of new dwellings are apartments.

Households are not declining in size.This has implications for the amount and type of housing needed to meet population growth and new information about the average household size and type. If more people are likely to work from home then this may also have implications for the type of housing that should be planned.Dwellings with a valuation of less than $300,000 have dropped from 43% in 2006 to 21% in 2012.

State Government housing has decreased by 4% in the past six years. Almost 70% of dwellings in the municipality are not held by owner occupiers, likely because dwelling growth is increasingly driven by overseas investors purchasing in the Australian market.

Some analysts and social researchers consider risks in the Melbourne housing market, including:

  • A glut in the municipality’s market thatcould extend to the end of the decade.
  • Financial losses on sale of dwellings. RP Data’s Painand Gain report, showed 15.5% ofall sales in Melbourne municipality in the final threemonths of 2013 were belowthe initial purchase price, compared to 6% in metro Melbourne. The average loss was $33,000.
  • Possible loss of liveability and the creative class vision for the centre of the city as “a place of work, recreationand residence in almost equal measure”.

Public Housing

The Victorian Government is reviewing the future of social housing in Victoria, which could include new social housing funding and development models and changes to rent levels and terms of social housing leases. The intent is to make social housing financially sustainable but could result in higher rents, less security of tenure and low income households being forced to leave the inner city or live in a cycle of homelessness, poverty and transitional housing.

Although public housing comprises 7% of the municipality’s occupied housing, it is mostly concentrated in estates with relatively higher levels of disadvantaged residents who use City of Melbourneand other services.

Homelessness

Homelessness has a range of impacts, including poverty and poor public health outcomes. There are also clear links between discrimination against people experiencing homelessness or poverty and poor health outcomes. In the case of women and children there are clear links between homelessness and family violence.

For data sources and references see the accompanying document (DM#8417055)

For more detailed information and data about health trends and priorities see DM#7441302

SUSTAINABILITY AND CLIMATE CHANGE

INTRODUCTION

Cities around the world are capturing the opportunity to reduce environmental impacts to improve short term and long term health impacts for residents and city users. Cities are also preparing for climate change, given the high risk impacts of these changes on biodiversity, economies and societies.

Australians are estimated to have the fourth highest ecological footprint in the world. As the driest continent on earth, potable water supply is a finite resource and infertile soils present challenges for food production.

DID YOU KNOW?

  • Residential greenhouse emissions in Melbourne municipality were estimated at 6.07 tonnes CO2-e per capita in 2012-13.
  • Non-resident emissions were estimated at 14.24 tonnes CO2-e per worker in 2012-13.
  • Total residential electricity consumption increased from an estimated 223.6 million kWh in 2011-12 to 249.8 million kWh in 2012-13.
  • Non-resident electricity consumption also increased from in 3b kWh in 2011-12 to 3.5b kWh in 2012-13.
  • Daily water consumption per resident in the area declined on average by 4.2% per annum from142litres in 2008-09to 112litres in 2012-13.
  • Workers’ daily water consumption decreased by an average of approximately 1.4% per annum from 108litres in 2008-09to 102litres in 2012-13.
  • Garbage collected per household per year increased 2% per annum between 2006 and 2012.
  • Recycling per household per year in the area increased 3% per annum from2006 to 2012.
  • In 2012, 32% of residents and 29% of businesses have done something (saving water or installing more efficient air conditioning) to prepare for extreme weather events.

WHAT DOES THIS MEAN FOR THE CITY OF MELBOURNE?

Climate change

The most relevant predicted effects of climate change on the municipality include: reduced rainfall; higher temperatures and heat waves; increased evaporation; sea level rise and storm surges; intense rainfall events; increased storm frequency and intensity; increased wind speed with consequences for the economy, public health, and infrastructure.

Greenhouse emissions

Data for greenhouse emissions show total emissions in the municipality of 6,442,240 tCO2e in 2012–13 which includes emissions from electricity, gas, landfill waste, private vehicles and public transport. This is estimated as 6.07 tCO2e per resident and 14.24 tCO2e per worker. If electricity consumption in the municipality continues grows, greenhouse emissions may also be expected to increase in future. Greenhouse emissions are driven by demand for energy, which has impacts locally including increasing the temperature of the city. Sustainable energy use requires the adoption of energy conservation measures and a switch to more sustainable generation of energy. Melbourne is reliant on the most greenhouse intensive fuel source for its energy.

Waste and recycling

From 2006 to 2012 garbage collected per household has grown 2% per year and shows Melbourne’shouseholds have been consuming more materials each year andthrowing away more waste to landfill. Without any change this trend may continue in the future. The amount that households recycle has also increased from 2006 to 2012. An understanding of the environmental footprint of goods consumed in the city will assist behaviour change programs.

Water consumption

Water consumption indicators show that the downward trend in daily water consumption by both residents and workers, from 2000 to 2007 has slowed since 2008, possibly because water restrictions ended. The recent water consumption pattern from 2010-11 to the presenthas been almost flat, at about 100 litres per worker. It did however continue to decline to 112 litres per resident. If this recent water consumption trend remains unchanged further reductions in daily water consumption by residents and workers will be harder to achieve in future.

Infrastructure

Provision of water incurs a significant social, economic and environmental cost through the construction of storage, treatment and transport.

Reducing the consumption of potable water may be achieved by using water carefully, installing water efficient fixtures and appliances, designing gardens and open space to use less water, harvesting rainwater and storm water and recycling water.Melbourne has an opportunity to provide leadership in integrated water management. Reporting water use can help engage residents and workers about reducing their water consumption.

Implications for transport infrastructure include more frequent transport interruptions due to extreme weather events, which will impact on productivity. Infrastructure is required to support modal shifts in transportation toward walking, cycling and public transit to minimise congestion, air quality and emissions impacts.