It might be an urban planners nightmare, but Australia's growing urban footprint is sure to create investment opportunities for astute property buyers moving forward.
The extent of this urban sprawl has been highlighted by a recent international report measuring the size and population of cities throughout the world.
Out of more than 1,000 cities in the world, Melbourne has been ranked 30th largest in geographic size according to the 2014 edition of Demographia World Urban Areas.
Sydney was ranked 40th largest city in the world by geographic size, and Brisbane 44th out of 1,008 cities surveyed.
Demographia World Urban Areas is the only annually published inventory of urban areas with a population of more than 500,000.
Melbourne, Sydney and Brisbane now outrank super cities (cities with a population of more than 13 million persons) in terms of geographic size such as Mexico City, Delhi, Cairo, Manila, Tehran and Istanbul.
World Ranking of Cities by Geographic Size (2015)
1. Tokyo 11,642 square kilometres
30. Melbourne 3,800 square kilometres
40. Sydney 2,037 square kilometres
44. Brisbane 1,972 square kilometres
* Source Demographia 2015
These world rankings show that Melbourne, Sydney and Brisbane are now larger than Manila (22 million population), even though they are only a fraction of the population of super cities.
The physical expansion of cities throughout Australia is placing huge financial pressure on government through the provision of new infrastructure such as schools and roads in fringe city areas.
A recent report produced by The Department of Planning in that state indicated it would cost the state government an extra $40 billion in new infrastructure costs to continue with its urban expansion plans compared to encouraging the redevelopment within existing suburbs.
This revealing report, cited research that found 'for every 1,000 dwellings, the cost for infill development (in existing suburbs) is $309 million and the cost of fringe developments is $653 million.
Because of this cost of urban sprawl, many governments throughout Australia are now encouraging urban infill in major capital cities.
Older areas with large amounts of vacant land are now being re-zoned for higher-density use.
This trend to urban infill will create opportunities for astute property investors moving forward since these older neglected inner-city areas will be regenerated over time and underlying land values will surge.
Astute property investors contact the planning department of their state government to examine the most current plans for urban infill and then draw up a target list of potential areas in the inner city that are primed for growth.
They should then physically visit these areas to determine whether major property development companies have secured land, but this is an early indication that the area is set to boom once their developments get underway.
Even buying a small one-bedroom apartment in these neglected inner-city areas can prove to be a wise investment over the long term if it is surrounded by land that will be developed into quality real estate in the near future.
Shane Kempton
Shane Kempton is the inaugural Group CEO of Professionals Real Estate Group which has nearly 300 offices located throughout Australia and New Zealand.
Professionals have been operating in Australia for four decades and provide a wide range of real estate services to consumers.
