Melbourne to receive the biggest infrastructure investment in history?

CommSec have recently released their quarterly “State of States” report that outlines the performance of each state on an economic basis. Surprisingly, Victoria has taken top spot for the strongest performing economy – knocking New South Wales off top spot for the first time in four years. This comes off the back of Victoria’s strong population growth and low unemployment levels, while the NSW housing market has softened since mid-2017

Driven by the evolution of Melbourne, the state has become the largest producer in Australia. Albeit for only one quarter, this reflects the growth occurring in the city. This paints a rosy picture for Melbourne as the demographic centre of the state, but it must have repercussions for the economy. With rapid population growth comes growing pains and an inherent need for more public services, transport infrastructure and facilities. After all, more residents in a city can only fit into two places, upwards (through denser living options) or outwards (with the creation of new suburbs).


So, what is happening to ensure Melbourne keeps its appeal as the city grows?

To counter exponential levels of population growth, the Victorian government has committed to a 35 year expansion plan. “Plan Melbourne” is a government backed blueprint for Melbourne’s future, aimed at the sustainable growth of the city while increasing the liveability and integrity of the metropolitan region.

A major part of the plan is the focus of transforming Melbourne into a polycentric city i.e. a city not centralised around one main centre, but many. With the city expected to overtake Sydney as our most populated over the next 15 years, there is a need to promote suburban job centres – rather than rely on the city CBD as the only major job centre. This will be done through the agglomeration of current major satellite hubs, as indicated in the below heat map.

Melbourne’s suburban job centres (Source:

There are a large number of major employment centres throughout Middle Melbourne, with ABS data indicating over 3 quarters of Melbourne’s jobs lie more than 5 kilometres from the city.  Considering this, the majority of the employed population work in an area that is accessible primarily by car or bus. This is a critical problem for the city, if the population is set to grow by another 3 million by 2050, without proper planning a significant traffic congestion issues will occur. An example of this can be seen in Beijing and Rio de Janeiro, where there is an estimated 47% congestion of the roads daily.

The solution? A forward-thinking plan from the Andrew’s government has been proposed in foresight of the growing population. Recently proposed is the plan for the largest transport infrastructure investment in Australian history. The proposal of the project was placed by the government to bolster the city’s transport network, future proofing it against what is estimated to be Australia’s largest population. The SRL (Suburban Rail Link) is proposed to be completed by 2050. The orbital connection stretching from Dandenong to Werribee will cost an estimated $50 billion, carry an extra 400,000 passengers per day and create an additional 20,000 jobs over the construction time frame.

Proposed Suburban Rail Link (Source:

If approved, the SRL will connect the economic growth centres of Melbourne’s middle ring, running underground to link major hospitals, university centres and employment areas. It will be the biggest change to public transport infrastructure program in Australia’s history, providing up to 90km of rail line and taking 200,000 vehicle trips off major roads.

Melbourne continues to grow into Australia’s economic powerhouse. As the city transforms, investment into the public services is paramount to ensure the maintenance of the city’s liveability standards. If approved, this infrastructure plan could be the key to driving the economy, and ultimately the performance of the property market.

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