Australias Growth Outside Capital Cities

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Growth in Commercial property outside major capital cities.


AUSTRALIAS GROWTH OUTSIDECAPITAL CITIESURBIS CENSUS 2011 PAPER NO. 1Outside of Australias five largest capital cities, regional populations grew strongly from 2006 to 2011. Our analysis of the 2011 Census results show that the metro-hinterlands within 90 minutes of the capitals attracted the greatest growth, and that these areas offer the greatest opportunity for further investment in development. Coastal areas, particularly in Queensland, continued to be popular, and mining stimulated important pockets of development, particularly in Western Australia. To maximise these opportunities, the role of government is important. Some pro growth Councils have delivered growth to their areas, while the Census identifies that government spending in slow growth areas is not effective.Michael Barlow Director 03 8663 4820 Solonsch Senior Research Manager 03 8663 4819 ONE-THIRD OF AUSTRALIANS LIVE OUTSIDE OF THE CAPITAL CITIES COMMONLY REFERRED TO AS REGIONAL AUSTRALIA.These regional areas attract significant political attention and funding support, but these areas can exhibit extraordinarily different characteristics. The release of the 2011 Census data provides the opportunity to better understand how regional Australia is travelling and its future potential. To undertake this research, Urbis constructed 166 Urbis Regional Areas (URAs) for analysis. These URAs range from small areas with just over 3,000 people such as Eden in NSW and Tennant Creek in NT up to the largest area of the Gold Coast in Qld with over half a million. There are vast differences between these regions, but they share one thing in common they are not a part of Australias five largest capital cities. Most surprisingly we found that there was very significant growth in the hinterland areas of the five largest cities. The closer to the capital city, the greater its growth rate.Type of area2 Metro-hinterland Coastal Xtra-peri Mining areas Inland areas River areas3 MINOR CAPITALS DWELLING GROWTH 22,295 METRO AREA 22 METRO HINTERLAND AREAS DWELLING GROWTH 64,882 33 XTRA-PERI AREAS DWELLING GROWTH 33,618 107 OTHER REGIONAL AREAS DWELLING GROWTH 71,490Percent increase in occupied dwellings from 2006-2011 13.5% 11.8% 11.3% 11.0% 10.5% 8.6% 10.4%Average of all URAsAcross all URAs, the average increase in occupied private dwellings was 10.4% over the five years from 2006 to 2011. The greatest increase was among metro-hinterland areas and the slowest growth among river areas, such as along the Murray. This report offers insights about 5.77 million people living in 2.15 million dwellings. Over the five years from 2006 to 2011, that is an increase of 186,000 dwellings.Fastest growing Regional urban areas 2006 to 2011 1. Torquay (Vic) 2. Drouin (Vic) 3. Latrobe (Tas) 4. Clare (SA) 5. Busselton (WA) 6. Mareeba (Qld) 7. Moruya - Tuross Head (NSW) 8. Margaret River (WA) 9. Strathalbyn (SA) 10. Yeppoon-Emu Park (Qld)1Percent increase in occupied dwellings from 2006-2011 34.8% 32.9% 28.4% 28.3% 28.2% 26.2% 25.3% 24.8% 23.8% 23.6%Slowest growing Regional urban areas 2006 to 2011 Roma (QLD) Broken Hill (NSW) Eden (NSW) Deniliquin (NSW) Kyabram (VIC) Queenscliff (VIC) Ingham (QLD) Carnarvon (WA) Port Augusta (SA) Leeton (NSW)Percent increase in occupied dwellings from 2006-2011 -3.7% -3.4% -1.4% -1.3% -1.0% -0.4% -0.3% -0.1% 0.1% 0.3%2An Urbis Regional Area is based on 2011 SA2 boundaries. To compare to the older 2006 ABS geographical classification, Urbis has used ABS correspondences and GIS analysis to create a best fit based on 2006 CCDs. An URA can fit into more than one category such as being both a mining area and also being coastal.2 CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREASMETRO-HINTERLAND AREAS WITH PLANNING SUPPORTAcross regional Australia, Metro-hinterland areas have achieved the highest dwelling growth of all areas.THE FASTEST LANE:A METRO-HINTERLAND AREA IS:Outside of the Greater Capital City Statistical AreaWithin 1.5 hour travel time from the CBD of the State capital4These areas are different from the outer suburban growth zones of our major cities. They are quite distinct areas, with their own characteristics. Across Australia, there are four examples of substantial metro-hinterland areas with over 100,000 residents Gold Coast, Sunshine Coast, Illawarra and Geelong. However, the star performers over the last five years were mid-sized metro-hinterland areas. These areas are growing due to affordable housing and improvements in transport links to the major capital cities nearby. In the early stages of their growth, they are feeder cities for the capitals, but quickly develop enough critical mass to sustain their growth for the longer term. TORQUAY:The fastest growing metro-hinterland area was Torquay with a 34.8% increase in occupied dwellings. It is south of Melbourne just under a 90 minute drive. It has the added benefits of being a coastal area and being very close to the large provincial city of Geelong. From early 2000s, Mirvac began developing Torquay with a 126 lot gold course resort, The Sands. Development in Torquay was accelerated even further in 2007, when the Torquay Jan Juc Structure Plan was developed. AFFORDABILITY AS A KEY Urbis consumer research conducted prior to the residential boom in 2003 found high levels of interest in Torquay residential development, particularly from the Geelong commuter market, and also from Melbourne retirees. Some were concerned about the many new estates in the area, but there was quite a remarkable change in attitude when informed of the pricing for house and land at $300-$350,000 which was perceived to be particularly good value.S.A. VICDROUIN:The second fastest growing metro-hinterland was 75 minutes east of Melbourne at Drouin with a 32.9% increase in occupied dwellings. It is located only 15 minutes from the slightly larger area of Warragul, and while both towns are striving to retain their individual identities, they are now merging into a substantial economic zone of over 30,000 people, which may create even more momentum.STRATHALBYN:In South Australia, Strathalbyn which is 1 hour south of Adelaide increased its occupied dwellings by 23.8%. In 2005, the Strathalbyn Town Plan identified that to meet future demand strategic areas needed to be rezoned for residential development. The Mt Barker council rezoning allowed for an additional 1,025 new homes.4Excludes DarwinCENSUS PAPER NO. 1 - REGIONAL CITIES AND AREAS 3THE BIG DEVELOPMENT OPPORTUNITY:NORTH OF PERTHThe strong growth in metro-hinterland areas around Australia is not a new phenomenon, and the map below shows the metro-hinterland and xtra-peri locations around the five major capital cities which are already established and growing strongly.There is an obvious gap in metro-hinterland and xtra-peri land North and East of Perth. Every other capital city has substantial metro-hinterland and xtra-peri Regional Urban Areas, and most are growing strongly. These are not urban growth areas, but distinct communities within commuting distance.Barossa +9.3 Clare +28.3 Port Pirie +4.5 Berri -4.2 Loxton +10.5Toowoomba +9.2Gympie +15.8 Kingaroy +30.6 Sunshine Coast +12.6Bathurst +9.3 Lithgow +6.3Gold Coast +13.6 Warwick +19.8 Tweed Valley +8.1 Lower Hunter +6.1 Singleton +12.4Bunbury +10.7 Busselton +25.9 Capel +25.9Murray Bridge +14.7 Strathalbyn +23.8 Victor Harbor +15.9Goulburn +8.8 Illawarra +5.5 Lower Hunter +6.1 Nowra +6.8 13 areas S & E Metro-hinterland: +5.2 to +34.5 Xtra-peri: -0.4 to +26.4 Huonville +24.715 areas N & W Metro-hinterland: +3.3 to +12.4 Xtra-peri: -1.0 to +18.2The most obvious missing piece of the puzzle is the area north of Perth. Despite the rapid growth in WA, the metro-hinterland locations north of the city are currently undeveloped. It is only a matter of time. LANCELIN, CERVANTES AND JURIEN BAY Development of a major road infrastructure Indian Ocean Drive - will assist development of towns along this section of the coast.W.A.LANCELIN. The biggest residential development to ever hit Lancelin is underway at Lancelin South, 2.2km from the Lancelin townsite, and is planned to ultimately be a 4000 lot community. Texan Joe Matthews owns the Lancelin South land and has been trying for 10 years to commence development but has been delayed because of servicing issues. TURQUOISE COAST. The Shire of Dandaragan has developed a Regional City Plan for the coastal strip from Cervantes to Jurien Bay. Jurien Bay was named as one of WA Regional Development Minister Brendon Grylls Supertowns in 2011. The Structure Plan includes over 11,000 residential lots, a tourism precinct and substantial plans for the Cervantes township. Developer partnerships are still being sought by the Shire.P4 CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREASSTRUCTURE PLANS VS RESIDENTS ASSOCIATIONS:Although metro-hinterland areas have tremendous geographical advantages, the planning environment can have a major impact on the growth achieved in these areas. Three metro-hinterland areas close to Melbourne demonstrate the huge impact between areas that welcome growth and areas which oppose growth.THE ACHILLES HEELTable 1 shows that Drouin and Torquay have achieved over 30% dwelling growth over the five years to 2011, while Woodend (a highly accessible township) has achieved virtually no growth. Drouin and Torquay have pro-growth Structure Plans. Woodend has a very strong residents association. It is clear that growth is difficult to achieve in the face of entrenched opposition by local communities.Table 1Distance to Melbourne Drouin Torquay Woodend 91 96 70 Percent increase in occupied dwellings from 2006-2011 32.9% 34.8% 3.3%LOW GROWTH OR MODERATE FOR WOODEND? ACT NOW!The Macedon Ranges Residents Association (MRRA) has waged a vigorous anti-development campaign in the area. They are opposed to moderate growth and want a low growth future. Their campaign has aggressively targeted proposed changes to the Planning Scheme by the Department of Planning and Community Development, and new development proposals such as the Villawood Properties Davies Hill development. Thus far, the MRRA has been successful in its goals.VICMCENSUS PAPER NO. 1 - REGIONAL CITIES AND AREAS 5AUSTRALIANS STILL LOVE THE COASTAustralians have a love affair with the coast. The number of occupied dwellings grew by 11.8% in the Coastal URAs - well above the average of 10.4%. Importantly, this growth was strong across areas of all sizes, not just the large coastal areas along the Qld and NSW coasts. Due to their sheer size, the Gold Coast, Sunshine Coast, Lower Hunter, Cairns and Townsville added the largest number of occupied dwellings, but these were not the fastest growing regions. Other than Torquay, which also benefits from being metro-hinterland, the fastest growing coastal regions were Margaret River and Busselton (south WA), Broome and Karratha (north WA), Moruya - Tuross Head and Merimbula - Tura Beach (NSW), Lakes Entrance (Vic) and Yeppoon-Emu Park (Qld). All grew their dwelling stock by 21% or more over the 5 year census period. BUSSELTON A CLASSIC COASTAL GROWTH STORY PIONEERS FIRST, PLANS FOLLOWBusseltons population growth began in the 1980s. From 1986, the Shire grew at 4% per annum and increased from a population of 7,784 to 11,569 in 1996. The first settlements were centred on the coastal strip on Geographe Bay. Now the LGA of Busselton has a population of over 30,000 with State forecasts indicating it will exceed 55,000 by 2026. It is continuing to grow at one of the fastest rates in Australia. According to the 1999 Busselton Urban Growth Strategy, the attraction of the area is a combination of its coastal and geographic location, significant natural attributes and traditional and expanding agricultural base.W.A.Of interest, the early growth of Busselton evolved until the late 1990s with individual site and general geographical factors the most common determinants in new developments. This approach worked well, but as development areas became more constrained, the need for an overall plan emerged, which has been used since 1999. This approach of having few development constraints, providing people with the flexibility to be the pioneers in the first instance, and only then introducing a plan at a later stage has tremendous parallels with the success of the Gold Coast.55,000P198020122026THE COASTAL SLOW Being on the coast doesnt guarantee dwelling growth. Three URAs actually suffered a decline in occupied dwellings. Eden (-1.4%), Queenscliff (-0.4%) and Carnarvon (-0.1%) all shrank. These three locations can all be described as the coastal slow. These particular communities value the slower, quiet life, which also creates an environment that is not conducive to significant residential development. Of particular note is that Eden is a neighbour to Merimbula-Tura Beach and Queenscliff is a neighbour to Portarlington, which are two of the faster growing URAs so their relative remoteness is not the reason for the lack of growth. Instead, other constraints can apply including opposition from local councils and communities to significant new residential development. CASE STUDY - CARNARVONW.A.Whilst there are many examples of towns in the North West of Western Australia that have been riding the crest of the mining boom, Carnarvon, a coastal town 920 kms north of Perth is a coastal slow. It is supported largely by banana and tropical fruit agriculture, prawn and lobster fishing and a relatively (by comparison) small scale Gypsum and Mineral Salt mining operation to its North. Its lack of proximity and infrastructure to support the large scale iron ore mines and North West Gas fields have seen it remain more of a stopover point for holiday makers rather than a town undergoing significant development or growth.P6 CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREASMINING AREAS5 AND GROWING PAINSONE OF THE MOST TALKED ABOUT ASPECTS OF AUSTRALIAS GROWTH OVER RECENT YEARS HAS BEEN THE STRENGTH OF THE MINING SECTOR. THAT TALK HAS ALSO FOCUSED ON THE GROWTH OF SOME MINING TOWNS, MOST NOTABLY IN WA. HOWEVER, THE FULL PICTURE REGARDING MINING AREAS IS NOT AS STRAIGHTFORWARD.MODEST DWELLING GROWTH WITH A POPULATION BOOM Most mining areas have seen an increase in population, but dwelling growth has not necessarily kept pace. Dwelling growth across mining areas is a little higher than non-mining areas, but population growth is much higher.Mining areas Non mining areasPercent increase in occupied dwellings from 2006-2011 11.0% 10.3%Percent increase in population from 2006-2011 13.1% 9.3%SOME MINERS ARE LIVING ROUGH Naturally, if there are more people and not as many houses, this must translate into more people living in each dwelling. Indeed, there has been an increase in the number of people per dwelling in mining areas, increasing from 3.0 to 3.1 persons per dwelling over the five year period. This increase in persons per dwelling is not new it happened five or more years ago, and many areas have achieved a decrease in persons per dwelling over the most recent period. However, a small number areas are clearly not managing this population growth. Karratha and Newman have suffered sharp increases in persons per dwelling, and Port Hedland has made no inroads from 2006 to 2011 to a problem that was very obvious five years ago.4.50Persons Per Occupied Dwelling (PPOD)PPOD 20064.00 3.50PPOD 20113.002.502.001.501.000.500.00LIVING IN A CARAVAN PARK THE MT ISA EXPERIENCE While many mining areas have improved the accommodation for the increased number of workers, Mount Isa is one example where unusual housing has been required. From 2006 to 2011, there was an increase of 130 other dwellings. While this is not a huge number, it is 31% of the total increase in dwelling stock in Mount Isa over the census period. An interview with the Mt Isa Caravan Park revealed that the increase is as a direct result of miners who cannot find other accommodation, or accommodation that is very expensive. The cost for a caravan site is $200 per week, compared with around $600 per week for a house. The miners almost always men - are not happy with the arrangement and are generally living in the caravan park without their families.5Mining area: any area which services a significant mining region, even if it has other advantages such as being a tourism area.CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREAS 7GOVERNMENT SPENDING IN THE WRONG PLACESHundreds of millions of dollars in government funding has been spent on schemes to attract people and investment to isolated areas and according to the Grattan Institute, this money has been largely ineffective. Our analysis has also supported the Grattan Institutes findings that the fast-growing metro-hinterland areas are underfunded in regard to hospitals, and the slower growing areas are overfunded. GOVERNMENT FUNDS ARE NOT STIMULATING GROWTH Governments regularly invest in regions by spending on social infrastructure such as hospitals, with the intention that these areas will become more desirable, and this will encourage people to migrate into the area. If this approach worked, the areas with the best provisioning of public hospital beds per person, would also be the fastest growing populations. The Census data shows that this just isnt so.Population growth 2006-11 %14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%Average population growth by public hospital provisioning segmentsPersons per bedWeakest provisioning2nd weakest provisioning2nd strongest provisioningStrongest provisioning400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0Persons per public hospital bed (Median per segment)Slowest growth quartile2nd growth quartile3rd growth quartileFastest growth quartileThe reality is that the fastest growing areas are vastly underfunded. The URAs with the strongest provisioning of public hospital beds per person had the lowest population growth in the last five years FAST GROWING AREAS CONTINUE TO MISS OUT ON FUNDINGAnd the consequence of this finding is that the fast growing areas are not getting their fair share.Given that these areas are already under-provisioned, and are growing well above trend, this problem will only get worse unless government funding is directed their way. However, analysis of the current public hospital projects show that of the 14 areas in the highest growth quartile and poorest provisioning quartile, only Capel/Busselton with the $150M Busselton Hospital has committed funding. The other 13 areas have no expansion to their hospital provisioning, or residents will need to travel at least an hour to receive treatment at new or upgraded hospitals.Urbis Regional Area Population Public Hospital Provisioning (persons per bed) 776.6 987.3 607.9 555.9 1668.1 531.7 704.8 462.3 651.0 630.0 1847.0 956.5 561.9 1476.0 427.1 Percent increase in occupied dwellings from 2006-2011 28.2% 32.9% 15.8% 28.4% 24.8% 14.7% 9.2% 13.5% 15.5% 6.9% 23.8% 15.9% 21.5% 13.5% 9.1% Percent increase in population from 2006-2011 27.3% 30.0% 14.5% 28.0% 24.7% 19.1% 29.3% 15.6% 15.7% 14.7% 23.1% 16.1% 23.2% 18.6% 9.2%Busselton Drouin Gympie Latrobe Margaret River Murray Bridge Newman Ocean Grove - Barwon Heads Phillip Island Port Douglas Strathalbyn Victor Harbor Yarrawonga Yass Metropolitan Australia average21903 13235 19501 4230 7330 16721 5478 18374 9399 4774 6457 13416 7061 6332 14,729,8168 CENSUS PAPER NO. 1 - REGIONAL CITIES AND AREAS