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- 8 Jul 2012
- The Sunday Age
- CHRIS VEDELAGO CAMERON HOUSTON
Housing glut hits suburbs
MELBOURNE’S urban fringe has been swamped with 35,000 unsold homes, prompting warnings the glut could trigger a further slump in property values, and fuelling criticism of the Baillieu government’s ‘‘crazy’’ decision to expand the city’s boundary.
The stockpile of unwanted housing in many of Melbourne’s newest suburbs has led to warnings by some planning experts that ‘‘suburban ghettos’’ could emerge on the city’s fringe, creating a social divide.
Of the record 55,290 unsold homes in Melbourne in June — the highest number of any capital city in Australia — most were concentrated in about 50 suburbs on Melbourne’s periphery, where more than 60 per cent of all unsold homes in Victoria are located, according to data from SQM Research.
As demand has fallen over the past year, the number of outer suburban homes with ‘‘For Sale’’ signs has jumped by almost 40 per cent.
Factors thought to be driving the surge in home listings include mortgage stress, poor infrastructure and transport services in outer-lying areas and limited local job opportunities.
‘‘We are now building suburbs that are destined to fail and ensnaring people in an economic trap,’’ RMIT planning expert Professor Michael Buxton said.
In the western suburbs of Truganina, Hoppers Crossing and Tarneit, more than 4000 homes are on the market — a 54 per cent jump in sales listings on the same time last year.
About 3700 homes remain unsold in the outer-northern suburbs of Doreen and Mernda, most in new estates built over the past decade.
‘‘We’re just not seeing any end in sight to this glut of new supply coming into the market,’’ said SQM Research managing director Louis Christopher. ‘‘It seems obvious there is only one direction for prices. That’s a frightening possibility if you’re a property owner.’’
Even in established outer suburbs such as Epping, Caroline Springs and Deer Park, 2000 homes remain unsold.
‘‘It’s like a ghost town in the new developments. Nothing has moved for the past three, four, five, six months,’’ said Hocking Stuart agent John Halkidis, who works in northern suburbs including Bundoora and Epping.
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