Simar Bamrah says her new neighbourhood in Donnybrook on Melbourne’s northern fringe has lots going for it; good schools, a strong Punjabi community and plenty of future job prospects.

But for now, the local dining scene is not up to much, there’s no public transport to speak of and she has to drive up to 20 minutes for a bottle of milk.

Simar Bamrah, who has recently moved to Donnybrook, with her sons Raninder, Harteg and baby Gurniwaaz.Credit:Eddie Jim

The Indian migrant’s experience is typical for the hundreds of thousands of people, many of them from overseas, who fuelled Melbourne’s phenomenal pre-pandemic population growth and who decided to make their homes on the city’s rapidly sprawling periphery.

But then the virus came.

Melbourne suddenly went from one of the fastest-growing cities in the developed world, on track to overtake Sydney as Australia’s biggest metropolitan centre within a few years, to one with a shrinking population.

Overseas migration halted overnight as borders slammed shut, temporary residents went home and other Melburnians fled interstate or to the regions to escape the city’s lockdowns.

Now Australia’s international borders are slowly opening up and experts say the scene is set for a return to the rapid population growth that drove the state’s economy to record heights in the seven years prior to the pandemic, with migrants attracted to the city by the same thing that brought them here between 2013 and 2019 in their hundreds of thousands: jobs.

Between 2013 and 2019, the state’s economy grew by more than 20 per cent, from $364 billion annually to $461 billion, and by 2019 Victoria’s economic powerhouse was estimated to have contributed nearly 40 per cent of the nation’s annual economic growth.

The state government has always been clear that Victoria’s pre-pandemic economic success was fuelled by population growth, most of it in Melbourne. Between 2013 and 2019, Melbourne grew by more than 700,000 souls, from 4.37 million to 5.08 million people, with overseas arrivals driving the increases.

In 2019-2020, about 56,000 were international migrants and 9000 came from interstate or regional Victoria. That year Sydney saw 50,000 overseas arrivals settle in the city and about 33,000 people leave, heading interstate or to country NSW.

But the headline successes masked underlying weaknesses, with the state’s per capita economic performance worse than South Australia’s and Tasmania’s. The surging population was making the economy look great on paper, but it wasn’t improving living standards.

Critics derided the state’s economic strategy as based on “building apartment blocks and shopping malls” to keep up with surging population, warning that if the people stopped arriving Victoria would be in serious strife.

At the same time, the city’s decades-long sprawl to the north, east and west became turbo-charged to accommodate the newcomers, more than half of whom were making their homes on Melbourne’s fringes. State and local governments were scrambling to catch up and provide the public transport, roads, schools, libraries, hospitals, access to work and other amenities taken for granted in inner and middle-ring suburbs.

Even then, there were frequent complaints that residents of the outer suburbs were not enjoying the same quality of life as other Melburnians and calls to slow down or rearrange the city’s sprawl into something more sustainable.

But then the people stopped coming. In the 12 months following the outbreak of the pandemic and the first national lockdown, 34,000 people left Melbourne, two-thirds of them heading for regional Victoria, according to provisional Bureau of Statistics data.

The full effect of COVID-19 on Melbourne’s population will not be known until the official full-year figures are published by the bureau next year, but University of Melbourne demographer Dr Tom Wilson believes a shrinking city is on the cards.

Wilson said he expected those areas with large numbers of temporary migrants, including the economically vital international students, to be the most depleted, in further bad news for the CBD and Docklands.

The effects on the state and city economies have been devastating, with youth unemployment soaring toward 11 per cent, Victorian economic output shrinking by .05 per cent in 2020-2021 and one in five shops in the CBD standing empty, with thousands of apartments and units in central Melbourne vacant and unable to attract buyers.

It is unsurprising, then, that the City of Melbourne added its voice to various business interests last week in calling for a massive increase in the nation’s annual migration intake, from 160,000 to 300,000. It’s a level of migration that would see about 100,000 overseas arrivals make their homes here each year, based on pre-pandemic patterns.

KPMG urban planner Terry Rawnsley says the city should prepare for a rise in migrant numbers, regardless of the national intake.

“The factors that drove that population growth were a strong labour market, a growing city and existing ageing population where workers were leaving the labour force more rapidly. All those factors remain, so there’s no reason why we won’t revert to 75,000 or 80,000-ish numbers, once the borders return to some sort of normality,” he says.

Rawnsley says the growth in Victoria’s regions cannot be ignored, pointing to the building booms underway in several regional cities, but that the state’s non-metro centres simply do not have the scale to absorb the level of expansion needed to significantly alter Melbourne’s trajectory.

“If you doubled regional Victoria’s historical population growth rate, from 1 per cent to 2 per cent, over the next 20 years, that extra growth would reduce Melbourne’s population from 7.4 million to 7 million,” he says. “The growth of the regions doesn’t really change the narrative for Melbourne.”

The shortage of workers in Melbourne, which has become acute in some sectors as the pandemic drags on, looks likely to exert a magnetic pull once again, he says.

“There’s a whole range of labour shortages. Some of them are pretty obvious, in the hospitality sector where trying to get staff to make coffees is challenge, but in health and caring too, nurses and aged care workers. There’s a whole range of service sectors where the vacancies have spiked up from where they were pre-COVID because we just can’t find the people out there to fill these jobs from the local population.”

That will be welcome news to the business lobby, with both the Property Council of Australia and the Urban Development Institute of Australia – which represents many of the greenfields developers doing a roaring trade in house-and-land packages in the outer suburbs – telling The Sunday Age that renewed population growth was the key to economic recovery.

The Property Council’s Victorian executive director Danni Hunter describes the state going into negative population growth for the first time in many years as “a pretty stark situation”.

“We’ve had the benefits of population growth really underpin economic growth for so long,” she says.

But for local governments at the pressure points of the population surge, trying to service some of Australia’s fastest-growing suburbs and finding demand for housing from onshore residents has made up for the lack of sales to new migrants, the benefits are much more mixed.

Casey Council in the city’s south-east said its population had continued growing strongly despite COVID-19, with the LGA adding 11,300 residents, about half of them babies born locally, in the 12 months to June, down from 13,700 the previous year.

The council said its 380,000 residents need more public transport, better roads, faster and more reliable internet and fewer mobile phone blackspots.

To the north of the city Carly Moore, mayor of Hume City Council, says growth has “slowed somewhat” over the last 18 months but is still continuing and the key reason is affordability, with houses available to buy from $500,000.

But despite the breathing space afforded by the closed borders, many of the LGA’s needs were still not fulfilled.

“There are some things that are lacking … road infrastructure is one of those things,” Moore says. “We have some very congested roads out our way, which hasn’t been as much of a challenge during COVID because people haven’t been using them as much, but certainly now that we are starting to get people back on the road again you can feel the pressure on some of our biggest roads.”

The council wants to see employment more evenly distributed across Melbourne so that fewer of its residents have to face the long daily commute to the CBD or other jobs hubs.

“We want our people to live and work in close proximity,” Moore says.

Moore also wants the federal government to provide more support to booming regions like Hume, with the Labor mayor backing her state government colleagues in their longstanding position that Melbourne was not getting its fair share of infrastructure spending from Canberra.

“Growth is not just a local government or state government issue, it is actually also a federal government issue,” she says. “Issues like migration are absolutely federal government issues, and if they’re going to be bringing people to settle in our communities, then they certainly need to be paying their fair share of making sure we’ve got the infrastructure needed to make these people comfortable.”

In nearby Whittlesea, population growth projections of 146,000 in the next 20 years look likely to be shattered after sales of housing lots surged by 230 per cent last year, according to Justin O’Meara, director of planning and development at the council.

”Now that we’re moving to a new permanent hybrid way of working where you don’t need to be in a city office location five days a week, people are looking at the suburbs as a viable option to actually own a piece of land and build a house and have some space and not necessarily be stuck in the inner city,” he says.

Simar Bamrah, one of the LGA’s new arrivals, is happy with her new home.

“It’s a new area and it’s going to be more growth and it’s great future for the kids and the jobs and opportunities,” she says. “The community is really supportive, the neighbours are very good.”

But the expanding population is feeling some growing pains without any shops or restaurants yet only a few buses a day connecting residents to the nearest train station.

“The first few years are a struggle for areas, so there’s no public transport, no shopping, no local stuff,” she says. “I have to drive 15 to 20 minutes to get milk.”

Professor Jago Dodson, director of the Centre for Urban Research at RMIT, says the state government has an opportunity, before immigration comes roaring back, to reset of the city’s growth trajectory.

“It’s a useful moment to pause and ask if we just want to forget that COVID ever happened and keep on with the [pre-pandemic] trajectory, or if we want to pause and reflect on where the city is going,” he says.

“Uncertainty remains about if and when international migration might recommence and at what scale if it does recommence, so we’ve got a bit of a breather.”

Dodson says there are opportunities to steer the housing sector away from its capital and carbon-intensive building practices, get jobs closer to people and make the transport sector less car-reliant, as well as to change business models and retrain workforces for a changing economy.

“To change the settings was a bit of a challenge because everything was happening so quickly,” he says. “Now there’s a chance to change the settings before the next boom happens, so it’s a useful moment.”

He suggests the state government, heavily reliant on property taxes and with much of its stimulus efforts being delivered through the construction sector, might not be able to afford to plot a new course for Melbourne.

“Much of our economic activity was orientated towards building housing, infrastructure, providing the services to meet the needs of that rapidly growing population.

“If we just down tools or reduce … that activity for a few years, then it takes quite a proportion of employment out of our system at a time when we actually are looking to stimulate the economy.”

A statement from a the office of Treasurer Tim Pallas on Friday indicated that the state government is committed to present population and urban growth policies.

“As our state continues to grow, our focus will always be on building the schools, hospitals, road and rail projects that keep our city moving and give all Victorians access to the services and jobs they need,” a spokesman said.

The Liberal Opposition took a comprehensive decentralisation policy to the last election, looking to ease the pressure on Melbourne by channelling population growth to Victoria’s regional cities, but did not respond on Friday when asked if that plan was still official policy.

Shadow Treasurer David Davis did say the Andrews Labor government needed a plan to deal with the population decline stemming from the pandemic, but did not have one.

“Victoria was so hard-hit, we were the only state to massively lose population, down 0.6 per cent, 42,900 people on the population a year before,” Davis said. “Every other state had its population increase. There is no doubt people have been voting with their feet.”

The Victorian Greens also say they want to see a plan from the state government to manage Melbourne’s growth sustainably.

“We just need a better plan for planning this state,” says Greens MP Ellen Sandell.

“We just keep releasing land, building suburbs with no trees, no public transport and largely kind of poor quality housing and that doesn’t create good community, it doesn’t create good livability.”

Most Viewed in National

From our partners

Source: Read Full Article