The availability of employment and services varies according to where you live. This is particularly so for people living on the edge of metropolitan Melbourne. Greg U'Ren, AIFS Research Assistant, argues that general assumptions about housing on the urban outskirts and factors explaining where people live need to be reconsidered.

Melbourne's outskirts, or fringe suburbs, consist mainly of 'greenfield' localities beyond the more established outer suburbs. But who is living in these areas? Are they the disadvantaged, the urban poor, forced out by the high prices of closer, more accessible and well-serviced regions?

A report by the Department of Planning and Housing (1990) proposed some alternatives for Melbourne's future shape, addressing in particular the issues of population growth and burgeoning urban limits. There is much said about these urban outskirts, both in published research and in the media, and there seems to be a conventional wisdom about who lives in fringe suburbs and how they come to be there. Popular belief is that low income earners are forced to buy homes on the urban fringe, and that for many, the outskirts of Melbourne is the sole option for housing they can afford. But to what extent is this true?

This article considers the actual proportions of people buying and living in lower priced dwellings on the outskirts of Melbourne and in other areas, by looking at the housing market as it was in 1989. In terms of housing prices, this was one of the most difficult periods for low income earners to buy homes, and it was also a time when the greatest percentage differences between buyers limited to cheaper housing and those with greater buying power would be apparent on the urban fringe. (The analysis does not take into account people without incomes or people in rental accommodation.)

Lower Priced Housing

According to information from the Victorian Valuer General's Office (which receives notification of all property transfers), 40 per cent of all dwellings sold in 1989 were in the middle suburbs, followed by the outer suburbs with 30 per cent, the fringe suburbs with 21 per cent, and the inner suburbs with 9 per cent. In this article, the number of sales and the prices of dwellings in each region are used to indicate the availability and value of housing stock for the entire region.

The four regions - inner, middle, outer and fringe - are shown in Figure 1; also shown is the percentage of lower priced housing in each fringe local government area. Lower priced housing is defined here as any dwelling (house or own-your-own flat) sold for below $115,000, and represents just over one-third of dwelling sales in 1989. One-quarter of dwellings below $115,000 were bought in the middle region, while two-fifths were purchased in the outer region and about one-third in the fringe localities. Less than one- tenth of cheap housing sales were in the inner suburbs. Interestingly, there was no large difference in proportions of cheaper dwellings between the outer suburbs where there are established services and the fringe areas where there are relatively few.

As the Figure shows, Melbourne's fringe region is not homogeneous; for example, about one-tenth of sales in Eltham were below $115,000, while the proportion of cheaper housing in Melton was close to 90 per cent.

It should be noted that the picture does not change much when looking at the location of houses (as distinct from houses as well as own-your-own flats) across Melbourne regions. Although there was a slightly larger proportion of houses bought in the fringe localities (two- fifths of houses below $115,000), three-fifths of houses bought in 1989 were in the middle and outer suburbs.

Figure 2 reveals the locations of people who bought homes below $115,000, broken down into three price ranges. According to popular belief about the absence of choice of home location for people living in fringe areas, it is likely that those purchasing below $105,000, and in particular those buying homes under $85,000, would be even more constrained or 'forced' into these isolated greenfields than people with greater purchasing power. Yet nearly two-thirds of purchases in these lower price ranges were located in the middle and outer regions

These sales can be compared with figures gathered for people who, in the 1988--89 period, bought homes with assistance from the Commonwealth Government's First Home Owners Scheme, designed to assist low to moderate income earners into home ownership. Eighty per cent of approved applicants had incomes below average weekly earnings, and about 90 per cent of people in the Scheme bought homes in metropolitan Melbourne for less than $110,000, with a median price of about $86,000 (First Home Owners Scheme 1989).

The location of Scheme participants' homes in Melbourne is similar to the pattern of the lower priced dwelling sales from the Valuer General data. Twenty-two per cent of the Scheme's buyers purchased homes in the middle region (2368 of approved applicants), while the largest group of participants (46 per cent) bought in the outer region, with 29 per cent in the fringe and 3 per cent in the inner suburbs.

Thus, a substantial number of low income earners in the Scheme bought homes in the middle region and, overall, more than two-thirds bought in areas other than the fringe at a time when prices were nearly at their highest point for the decade.

In addition, unpublished information from a 1988 housing survey by the Australian Bureau of Statistics provides details on the relative proportions of first home buyers compared with buyers who already owned a home and had shifted once or more. Unlike the data from the Valuer-General, this information details the location of owner--occupiers only, and not dwellings purchased by investors or people who own more than one home. The ABS figures cover sales in the period between 1983 and 1988.

In essence, contrary to what might have been expected, there are not greater proportions of first home buyers in the outer and fringe regions than the inner and middle suburbs. Forty-five per cent of all home buyers in the inner suburbs were first home buyers (8000 sales). In the middle suburbs, to the south and to the east, 44 and 27 per cent of home buyers respectively were buying their first homes, while in the outer/fringe suburbs, to the south and to the east, 38 and 36 per cent respectively were first home buyers. Only in the west, was there a greater proportion of first home buyers (56 per cent) than non-first home buyers.

People buying their first home generally have less income and assets than second home buyers and are likely to purchase in lower price ranges. If people are forced to live on Melbourne's urban limits, rather than in closer locations, much greater proportions of first home buyers should be apparent in the outer and fringe districts than in other regions. In fact, large proportions of first home buyers can be found across all Melbourne regions; the outer and fringe districts are predominantly non-first home buyers.

This evidence suggests that in 1989 the fringe region was not the only option for home buyers, and that the process of home location is not simply one of economic constaints pushing home buyers out to the under-resourced outskirts.

Overall, there is not the expected dramatic difference in the availability of cheaper housing across Melbourne's regions, except for the inner suburbs where there were relatively few sales. And at the end of 1989 and in one of the most difficult climates for low income home buyers, the urban outskirts were clearly not the principal location of cheap housing.

Housing Types

The description of housing location as a simple matter of constraints is complicated by the type of housing likely to be available on the outskirts of Melbourne. Although prices between fringe and other areas will often be the same, there can be vast differences between the age and condition of properties. Generally, housing on the outskirts of Melbourne is newer, and of brick construction. Thus it seems possible that by living in fringe localities many families, including low income earners, are trading poor local work prospects, services and travel considerations for their housing preferences.

As well as variation in the condition of homes between regions, other factors likely to affect the regional location of homes include: low deposits (usually $2000--$3000) with which homes can be purchased in fringe suburbs through developers, builders or real estate agents; people's familiarity with certain suburbs; and the influence of family, friends or employment networks.

One other consideration likely to influence home buyers with children is the number of bedrooms in each dwelling. The extent to which there is a shortage of dwellings appropriate for larger families in the middle and outer suburbs compared with housing stock on the outskirts needs to be explored.

Conclusion

Although there were large proportions of lower priced housing sales in most suburbs on the outskirts of Melbourne at the end of 1989, large numbers of cheaper dwellings were also bought across all but the most central of Melbourne's regions, particularly in the outer suburbs. First Home Owners Scheme recipients and first home buyers were also widely distributed across Melbourne, not confined to the fringe areas, and the largest group of First Home Owners Scheme participants was in the outer region.

According to the distribution of dwellings across Melbourne, there is no evidence that people (specifically, low income earners) have been forced to buy on the urban fringe simply through a lack of affordable alternatives elsewhere, or consequently, that the cost of buying a home is the overriding influence on whether families buy a home in the middle, outer or fringe regions. It remains to be seen how family and dwelling size change this picture.

There is a need to investigate further the assumptions about the location of lower priced homes and factors explaining where people live, to look beyond the simple dichotomy of 'choice versus economic constraints' in understanding this process. The Institute's Australian Living Standards Study will investigate some of the complex relationships between housing preference, home location and family needs.

References

• Department of Planning and Housing (1990), 'Urban development options for Victoria: a discussion paper', Melbourne.
• First Home Owners Scheme (1989), Annual Report 1988-89, Department of Community Services and Health, AGPS, Canberra.