Melbourne’s median house price has taken a beating over the last year, but the land cycle is still gifting huge economic gains. Not so much on the ground but, more accurately, above the ground.
Economic rent—the hidden engine of wealth transfer—is playing out in real time, and nowhere is this more evident than in Arden, a tiny precinct in North Melbourne.
Source: theinnernorth.com.au
Arden is one of the 50 new activity centres announced by the Victoria Government in October, to “revitalise urban spaces and address critical housing needs.” Which, under current policy, basically translates to two things.
1) Up-zoning vast tracts of land, creating a massive free lunch for land speculators – and
2) Flooding the market with an abundance of small, poorly constructed 1 & 2 bedroom apartments in areas where there’s already an oversupply.
I’m all for promoting urban development – but this is just more fuel for the boom/bust dynamic of the land cycle.
Just days ago, plans were lodged for an enormous 57-story tower—a height that eclipses Melbourne’s iconic Rialto building - once the city’s tallest tower at 55 stories.