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A dangerous imbalance on the Bulldogs’ home turf

Whitten Oval in Melbourne's west is at the heart of a population growth hot-spot.

Whitten Oval in Melbourne's west is at the heart of a population growth hot-spot. Photo: AAP

Tears of joy flowed at my local pub on Saturday when the Bulldogs clinched the AFL premiership – the underdogs had finally struggled to the top of the heap.

And club officials and players were right, in many media interviews afterward, to claim that their western Melbourne suburbs fan-base reflects that struggle.

The areas west of Footscray contain a broad cross-section of established working class families, migrant families and young couples breaking into the housing market – augmented in recent years with wealthier pockets of gentrification.

Having mostly lived in the area myself since 2003, and with three kids in the local schools, I’ve seen first-hand the region’s rapid growth and cultural blossoming.

But unlike footy goals, population growth isn’t always a case of the ‘more the merrier’. There’s a great danger that the rolling out of suburbs across the western region will be too quick.

New generations of migrants, first-home buyers and, well, Doggies fans, don’t just need a small block of land and a house. They need infrastructure, services and jobs – or at least really good travel options to get to where the jobs are.

Travelling through Melbourne’s west, it’s not uncommon to see freeway traffic banked up as early as 6.30am as commuters from suburbs like Caroline Springs or Derrimut try to get to jobs further to the east.

A national problem

It’s not only in Melbourne these problems are apparent. Many of Australia’s fastest growing areas, according ABS data, are situated far from the bulk of job opportunities – south west Sydney, Brisbane’s Gold Coast, the northern fringe of Adelaide and south west Perth to name a few.

The obvious reason to move to outer suburbs is to get on the real-estate ladder before soaring house prices force you into the ‘rental generation‘.

Problem is, economic discussion in Australia has treated the 15-year housing credit boom, and the more recent dwelling construction boom, as just what’s needed to replace the waning mining boom.

house prices melbourne

Property prices have soared in Melbourne’s gentrified suburbs.

Hitching households to decades of debt repayments boosts GDP numbers, but doesn’t do a lot to make families wealthier.

In aggregate, expensive housing isn’t really producing wealth at all. While families sit on large paper profits, every new generation of homebuyers has to spend a larger proportion of their disposable income on their mortgages – what some call ‘bigger fool economics‘.

The argument that ‘servicing debt has never been cheaper’ doesn’t hold water. As my colleague Jackson Stiles recently noted, the biggest determinant of wellbeing in retirement is owning your own home, which requires the paying down of record-high loan principal amounts as well as making those ‘cheap’ interest payments.

The wage-debt problem

What can fix this problem? In an ideal world it would be wage inflation getting ahead of house price growth for the first time in decades.

For wages to rise in real terms, the value of what each worker produces has to rise.

Put another way, the burgeoning catchment of Doggies fans in Melbourne’s west must attract investment in the high-productivity industries of the future.

Some are upbeat about that prospect. Regional Development Victoria, for instance, said in a recent report that: “The West’s offer to investors is clear. Few other Australian regions can match its rapidly growing, highly qualified and diverse labour force, proximity to the CBD, ports and airports, and stock of sites ready for development. This opportunity is set to catalyse Melbourne’s West as a powerful and diverse economy.”

That’s all true. But the point is that not enough of the jobs are there yet. Nor is the right level of infrastructure, especially for public transport and roads.

traffic congestion melbourne

Affordable housing in outer suburbs often comes with awful commuting options.

Part of the problem is the concentration of Australia’s population into the main capitals – cities that get wider and wider, but with a lot of jobs concentrated at the centre.

Sydney and Melbourne between them house 41 per cent of the nation’s urban population. By contrast, regional centres with good growth prospects are minute – Geelong has 0.8 per cent of the nation’s population, Cairns 0.6 per cent, Albury-Wodonga 0.4 per cent and Bunbury in WA just 0.3 per cent.

Yet all these are have potential in the kinds of industries the government says will ultimately fill the void left by the mining boom – tourism, more capital-intensive agribusiness, food processing, advanced manufacturing and even health services and education exports.

The economic struggles of Melbourne’s west have bred a tough, scrappy, and now triumphant football team. And their fan-base should be proud of what they’ve created.

But as with so many of the hot growth spots in Australian cities, governments need to get their heads around the idea that industries, not suburbs, are what will make those fans prosperous in the future.

To read more columns by Rob Burgess click here

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