Foreign investors to flood Melbourne CBD with dingy flats
Leader Community News
Kylie Adoranti and Nick Miller, Herald Sun
13 April 2015

RMIT professor Michael Buxton says there is a lack of planning regulations applied to Melbourne’s new ­developments.   Picture: Josie Hayden

FOREIGN investors have snapped up more than 70 per cent of development sites sold in inner Melbourne in the past few years, mostly to build low-quality high-rise apartments, a planning ­expert says.

RMIT Environment and Planning Professor Michael Buxton said research showed foreign investment was about 13 per cent of turnover in the total Australian real estate market but was much higher in Melbourne.

“Up to three-quarters or more of Melbourne Central Business District (CBD) inner-urban brownfield land sales in recent years have been to foreign investors,” Prof ­Buxton said.

And up to 60 to 80 per cent of the new inner-urban Melbourne apartment market was investor-owned, made up of foreign and local investment, he said.

Prof Buxton said that in the 12 months to June 2013, ­Australian commercial and residential property drew ­almost $6 billion in Chinese ­investment, more than from any other country.

A 2014 report by Prosper Australia found more than a quarter of units in Docklands were empty.

But Prof Buxton said it was difficult to estimate the unoccupied apartment rate because some were used by owners and investors as short-term ­accommodation.

Some might be left vacant as rent was not always an important financial consideration.

Prof Buxton said there was an absence of planning regulations applied to Melbourne’s new ­developments.

the worst quality and densest residential high-rise apartments in the world

“We are building the worst quality and densest residential high-rise apartments in the world, that is pretty much agreed on,” he said.

Prof Buxton said the lack of height controls “led to a speculative frenzy, which has bid up the price of CBD land” and some sites had doubled in value in two years.

He also ­criticised the Foreign Investment Review Board for failing to enforce laws preventing ­foreigners from buying existing dwellings.One million Queenslanders who live in apartments want assurances from the state's building watchdog that units are safe, in the wake of London's Grenfell Tower fire disaster.

too small, too dark and badly ventilated

State Planning Minister Richard Wynne acknowledged some apartments in Melbourne were “too small, too dark and badly ventilated”.

“Melbourne is in danger of creating a monoculture of one-bedroom poorly designed apartment stock,” he said.


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