New Geography

Author: Michael Matusik

  • Queensland’s Future: Diverse and Dispersed

    I was recently asked to outline my thoughts on how the Queensland urban landscape might look 40 to 50 years from now.  Go on, you can laugh.  I did too.  It’s hard enough to forecast the next 12 months, let alone two generations away, but I’ve given it a go, of sorts, so here it is:

    First though, it might be best to outline my methodology.  In short, this forecast will be based on underlying trends, some understanding of human nature, and importantly, the Australian mindset.  My outlook is supported by evidence – what people actually do rather than say – and importantly, not by urban myths or fallacies, despite the frequency with which they have been aired of late.  Unfortunately, we don’t have the space or the time here to support every claim or go into massive detail; so this discussion is confined to broad shapes – not nitty gritty.

    Queensland’s urban future (and that of Australia) can best be summed up in two words – Diverse and Dispersed.

    Let’s deal with the second D – dispersion – first.  Our regional centres are likely to become a whole lot bigger and at the expense of the already crowded south-east corner of the state.  The move away from the world’s bigger cities is already underway, as evidenced in the recent census in the United States, but also throughout much of Europe.  Several Asian and Middle-eastern countries are now also following suite  As a Mckinsey Institute study recently found, smaller cities, particularly in the developing world, are growing considerably faster than the much discussed megacities.

    The annual ABS small-area population data suggests this trend is also very true in Australia and particularly in Queensland, which, over the past decade, been the fastest growing state on the continent, appears to be following the same trend, something likely to be borne out by 2011 Census, due later this year .

    Within our capital cities themselves, the much ballyhooed move downtown will slow – again, it already is doing so – as the cost to live within close proximity to the CBD is just too high compared to the real benefits. 

    The irrational assertions about the trend towards denser living rest on urban myths that promote inner city density over other housing forms. These include the notion that suburban growth worsens carbon emissions and traffic congestion; people are being forced to live far from jobs concentrated in our CBDs and denser development will make it cheaper for them to get to work. These notions are all largely exaggerated or incorrect. More to the point, they stand in opposition to the basic preferences of the market.  

    Instead of having a single high-density city core, with lower development density radiating outwards, the most likely urban shape in the future will be one of more even distribution of housing density throughout the city; concentrated more, no doubt, around middle-ring transport hubs and new master planned town-centres.  Our middle-ring and outer suburbs will have much more compact urban settings but will remain primarily dominated by relatively low density housing.

    Diversity relates to the housing stock itself.  The current push towards smaller dwellings has little to do with demographics and the market’s wants, but reflects basic reaction to diminished housing affordability.   There is a demand for tightly-sized product, but it is nowhere as near as high, nor is the long-term trend towards such as strong, as the urban boosters advocate.

    Taking a wider view, Australia (and America too) is still in its frontier or "barbaric" stage of its cultural evolution.  We walk with wide gaits, worship most things large from roadside bananas to women’s appendages, and don’t really like crowded spaces or queues Most of us like our space; aren’t really ready to give it up, and are not likely to do so for many decades to come.

    Rather than remaining focused on density and concentration, it could well serve the community to focus on what appeals to the vast majority of the population, particularly the middle and working class families.  A more practical approach might be to foster the development of smaller, more efficient cities, as well as expansive suburbs and revived small towns rather than engage in a manic drive towards persistent centralization. 

    Rather a forced density agenda on a largely unwilling population, it makes sense to consider how to make a more dispersed (and diverse) urban future more workable and sustainable. Innovations in work environments, notably increased use of telecommuting and dispersed workplaces, and more fuel efficient cars hold more promise than plans that force Aussies to live a way the vast majority do not prefer.

    This article originally appeared in the June/July 2011 edition of the UDIA Queensland’s Urban Developer Magazine.

    Michael Matusik is a qualified town planner and director of independent residential development advisory firm, Matusik Property Insights.

    Photo by Michael Zimmer.

  • Australia’s 2011 Census: Chock Full of Surprises

    There is nothing better than a good old count to check out what’s really happening.  And a lot has happened across Australia over the last five years.  But what actually has happen to the country’s demographic fabric might surprise many. 
    There are ten trends which I think will emerge out of our next national count on Tuesday 9th August.

    1.            Acceleration towards suburbia.  Despite what we are feed by the intelligentsia most Australian’s want to live in a suburban settling.  The amount of new development on the fringe and the proportion of the population living out there will have increased over the last five years.  This trend is also likely accelerate in coming decades as to will a shift to “opportunity” regions, many of which being regional towns.  And there is the real surprise, many of those that moved to suburbia are young – the 25 to 34 age group. 

    2.            Increase in household size.  Household sizes are no longer shrinking.  2006’s 2.6 people per household average will be closer to 2.8 this census and may rise even higher in the future.  Why?  The baby bonus, change in overseas migrant mix, low housing affordability and poor government decisions like, ironically, the first home owners grant and the more recent increase in owner-resident transfer duties in Queensland.

    3.            More family households.  Despite forecasts of more lone person and couple households, we are likely to see an increase in the proportion of family households this census.  In fact the proportion of lone households is likely to fall, as many are forced to live in shared arrangements or move back home with family. 

    4.            Increase in net wealth.  Despite the GFC, rising household costs and now declining house prices our net household wealth will have risen sharply between census periods; as too will our household incomes. Equity in our homes (and investment properties) will have also risen, with more people owning their home outright than ever before.  The August 2011 poll will also find that Australia’s net household wealth is also at a record high.

    5.            Working longer.  The number of hours reported as worked each week will be up, but when they were clocked will be increasingly outside of the core 9 to 5.  Yet, and whilst not a census measurement, our productivity and ability to innovate will be down.  In broader terms our economic measurements are wrong – we have suffocating, quarterly consciousness and proprietary trading rather a focus on nurturing talent and innovation.  The county is far less dynamic as a result.

    6.            Change in demographic mix.  A shift in overseas migrants from China, India, Africa and the Middle-East and less arriving here from more traditional sources such as the United Kingdom, Europe and New Zealand.  This means bigger household groups, a younger age profile and rising demand for detached housing (and burqas too).  

    7.            Larger homes.  Whilst there has been shrinkage in apartment sizes of late and only really to make them easier to sell, most other housing types across Australia over the last five years have gotten bigger.  High and rising land costs, relatively cheap building costs and increasing household sizes are the main reasons why.  Our aging demographic will also want big new homes – assuming that baby boomers move – but how cheap new housing will be to build in the future is uncertain at present.  Home owners are also moving less often and the distance, when the do move, is becoming less.  “Fewer moves, local focus” should be the catch-cry for the next decade.

    8.            Fewer marriages.  And those that are taking the plunge are getting married later.  The average age of mothers having their first child should exceed 30 years. 

    9.            Dissolution of relationships.  Not only are fewer Australians getting married, but we are breaking off relationships at an increasing rate.  Family and relationship disbanding reflects our declining resiliency and mounting acceptance of the nanny state.  We don’t seem to overcome hardships these days, just “cut and run”.  From a housing prospective if our households are fracturing so easily, then why are our prescriptions for housing increasingly rigid?

    10.          Less religion.  Last census more Australia’s nominated that they believed in the Order Of The Jedi than Christianity, so maybe the census is bunkum after all.  Yet more Australian’s are likely to nominate that they have no religion at all.  Whilst we are not America, we do live largely an American way of life and were founded on similar values – industriousness, honesty, marriage and social cohesion – but these seems to be unravelling.  This census count should show us how far lost we have become.

    To paraphrase international urban authority Joel Kotkin “Whatever your politics or economic interests, the 2011 census will show that the country is changing and in a dramatic way – if not always in the ways often predicted by pundits, planners or the media.  It usually makes more sense to study the actual numbers than largely wishful thinking of mostly urban-centric, big-city based and often quite biased analysts.”  As we wrote after the last census, it maybe time for the planning industry to take a breather and set a different course with regard to our urban land use.  Hopefully this time around the planning intelligentsia will take some notice.

    The Matusik Snapshot is opinion and not advice.  Readers should seek their own professional advice on the subject being discussed.  Comments are welcome, contact me on michael@matusik.com.au.

  • Turn the Focus Towards Australia’s Regional Towns

    Too much property reporting and media attention is given to our capital cities, and not enough effort is spent analysing our regional towns. 

    As a result, too few investors understand Australia’s regional potential.  Right now, not only are many of our regional centres at the bottom of their cycle, but larger, long-term trends are at play.  Indeed, regional Australia is on the cusp of some big demographic changes. 

    Here’s why:  In recent years our capital cities have attracted around two-thirds of Australia’s population growth, with many of these new residents settling in the outer suburbs. Our capitals also generated the lion’s share of employment. 

    But over the last twelve months or so, this trend has shifted, with close to two-fifths of our new jobs now being created away from our major cities and in regional towns.  Past trends suggest that population growth will follow. 

    Deteriorating lifestyle (and rising costs) – in our three major capitals, at least – is likely to add further momentum to this new regional push.

    It’s not too hard to understand why Australia’s regional areas are sometimes overlooked.  A quick look at the demographics of Australia reveals a country the same size as mainland USA, or 20 times the size of Japan, with only eight capital cities throughout its eight states and territories.  This is one of the most urbanized countries in the world, where only 15% of the population resides in rural areas and a vast interior.   

    This week, regional focus has come under the microscope with the unveiling of the 2011 Federal Budget by Australia’s Deputy Prime Minister and Treasurer, Wayne Swan.   The Government plans to flood regional areas with 16,000 skilled migrants via the introduction of new initiatives to encourage skilled migration to regional areas.

    Additionally, regional areas are set to receive critical infrastructure upgrades to hospital and health services, and funding to support strategic planning and growth. 

    Astute property buyers should start to look beyond the capitals for investment opportunities.  The big winners in this regional resurgence will most likely be the resource towns – the “muscle towns”, as Bernard Salt recently called them. 

    By this, we don’t mean the fly-in-fly out places like Moranbah, but places critical to the delivery of iron ore, gas and coal – like Wollongong, Newcastle, Gladstone, Surat Basin (Toowoomba) and Townsville.  Expect big things in these regions.  Two thirds of the new jobs created across Queensland last year were in the Gladstone region alone.

    Regional Australia is to become a whole lot more.

  • Aussie Urban Myths

    Urban planning in Australia is lost in a dense fog of presumption and theory. What’s needed is to toss out the hype and to illuminate some of the common planning myths for what they really are: impediments to progress.

    An example of planning hype occurred not long ago when ten urban academics loudly criticised the Victorian government’s decision to develop about 40,000 hectares of new land on Melbourne’s fringe, calling the decision short-sighted and unsustainable.

    The best way to development Melbourne, they said, is to intensify redevelopment along tram and train lines and around existing activity centres, with such developments being more dense than the surrounding suburbs, but not necessarily high-rise. Their modelling suggests that the 600,000 new dwellings required by 2030 could be accommodated under four stories within the existing built-up area.

    They did confess that not everyone wants or needs to live in an activity centre or on a rail/tramline, but were adamant that a sustainable city is “one where you can get there without a car”. The future, according to them, will be “fitter rather than fatter”; where we will “live with more amenity” and have more “choice of housing type”.

    They concluded that this is a national issue because when we finally commit to a low-carbon economy, we will have these extra 40,000 undeveloped hectares which, one assumes, will act as some form of carbon sink.

    Under normal circumstances, one might be tempted to dismiss the more extreme machinations of latte-left academia, but unfortunately, some serious decision makers are starting to listen to this type of questionable commentary.

    Without doubt, a key challenge facing Australia’s major capitals is how to redevelop the middle-ring suburbs, but placing all of one’s development eggs in this basket is lunacy and is based on misguided presumptions and poor theory. In this light, it is pertinent to consider several urban myths.

    But before our myth busting, it is worth stating that infill development is more expensive than many realise, in terms of site acquisition, approval processes, infrastructure provision, and combating NIMBYism. This is reflected in the high end prices of infill stock which, in short, costs more than twice as much as broadhectare product.

    For example, the cost of a new infill dwelling (which is two bedroom/two bathroom and one car space) within five kilometres of the Brisbane CBD is $650,000. But a new detached house (around 20 kilometres from the GPO, comprises three bedrooms, study, two bathrooms, double garage and on a 500 sqm allotment) can cost $325,000. On a rate per square metre basis the infill product (including any land) is $8,000, the detached house (again including land) is around $2,000, sometimes less depending on who the builder is.

    Low affordability makes the sale of infill product often slow, even in stronger economic times. In addition, there is often a large mismatch between the product type (and size) offered in infill locations and household demographics and, importantly, the market’s aspirations.

    Our urban academics were somewhat correct on one point – not everyone wants to live in an infill development. Our experience is that demand for such product – and assuming the dwellings can be delivered at an economic price point – varies between 25% and 40% of overall demand, depending on the urban location in question. Under current conditions, the real demand, however, is around 15% at best. So from the get-go, delivering such an ambitious infill development target is extremely unlikely. In fact, it is impossible.

    Myth – higher densities will mean less traffic
    The theory is that higher densities around existing public transport networks will see a lift in public transport use and fewer cars on the road. Public transport accounts for about 10% of total trips in our major cities. Most urban metropolitan strategies aim to increase this to 20%. So, four-fifths of the trips will, at best, still be via private vehicle. Why? Because the car is much more convenient.

    Without serious infrastructure commitments to repair and upgrade the public transport networks in our cities, cars will continue to dominate. In fact, under current conditions, and somewhat ironically, infill development would lead to more traffic congestion.

    Most infill product built within Australian cities will not sell without a car space. The quality of our public infrastructure, especially outside of Melbourne, is not good enough for infill owners (or their tenants) to forgo the security of their cars. So, new infill development is increasing the number of cars on the road and often in areas which are already congested and are hard to improve from a traffic management perspective.

    One could argue that it would be better to further decentralise employment and settlement around the edges of the metropolitan area, and most obviously upgrade the existing road network.

    Academia, obviously, have never tried to sell a dwelling without a dedicated car parking space.

    Myth – urban consolidation is better for the environment
    This implicit assumption is now widespread among the media, the planning community, government agencies and in political circles. Yet the available evidence suggests the opposite.

    • Comparison between suburban houses and infill product often overlooks the number of persons per household, which is much higher in the traditional suburban detached house.
    • In traditional suburban detached homes, larger household numbers share various facilities – the refrigerator; television; washing machine; dishwasher etc., and even the lighting needed to light a room. The per capita energy, and even water consumption, is more efficient in suburbia than in more central urban locations. The “average” household size within an infill development across Australia is around 1.6 people, in detached housing it is 3.2. In most cases infill product have as many appliances as are in a detached house, yet the number of occupants living in infill product is about half that living in detached suburban homes.
    • The nature of infill housing is, in itself, prejudicial to positive environmental outcomes due to things like clothes driers (lack of outdoor drying areas), air conditioners, lifts and the need to service (lights and air-conditioning) common areas. Also, suburban development allows for wider footpaths and private yards, which in turn provide space for trees to grow. There is less opportunity for greenery – a key producer of carbon offsets – in higher density urban development.

    Not withstanding anything about the actual built form, the greatest correlation between energy and water use (and hence, environmental impact) is based on per capita income. Wealthy people consume more energy/water and thus have a bigger environmental impact. The better off are the only ones who can afford to live in infill housing.

    Research in 2007 by the Australian Conservation Foundation found that in almost all Australian cities, higher-density, infill housing produced higher per capita greenhouse emissions and had larger eco footprints than outer suburbs, notwithstanding the greater access to public transport.

    Myth – most jobs are downtown
    There is also a widespread presumption that central business districts and their immediate fringes contain the majority of jobs in a city’s economy, and are therefore the major generators of traffic. Developing housing further from the downtown area, the argument goes will only mean more congestion as commuters try to get into and out off the downtown area.

    It is easy to understand how this myth developed: the CBD/fringe holds the tallest buildings; the seat of government is often located there; so, too, are many cultural facilities; they are the hub of train/tram networks and the focus of much of our angst about traffic congestion.

    But downtown is home to around 20% of all jobs in a city’s metropolitan area (just 10%, when looking at the CBD alone. According to the latest Australian census (2006) the proportion of employment in our major CBDs (Sydney, Melbourne, Brisbane, Perth and Adelaide) ranges from 9% to 11% – thus 10% is pretty consistent). So 80% of our jobs are actually outside of the downtown area. The implications of this are profound. Our ten friends from academia are proposing a policy based on a myth: that urban dispersal of housing will mean longer commutes to work.

    The facts are that most commutes (over 90%) within a city are across suburbs and not downtown. Unfortunately, this type of travel (and the nature of the work involved) makes it impossible to service efficiently via public transport.

    So in truth, more housing on the urban fringe will not in itself lead to more inner-city congestion, but will produce more suburb-to-suburb work trips. Perhaps as a priority (and in concert with more decentralisation and suburban development), we should build better ring-road systems (and more river crossings in a city like Brisbane, for example), rather than advocating mostly infill redevelopment and heavy urban infrastructure spending.

    Michael Matusik is a qualified town planner and director of independent residential development advisory firm, Matusik Property Insights, based in the Brisbane region in Australia.

    Photo by Onlygoneanddoneit – Suziflooze & Stuart