From boardrooms to bedrooms: Could the apartment boom kill Melbourne’s CBD?
13/01 2017
Author: FCG Admin

The tidal wave of apartment construction in Melbourne’s city centre has, for the most part, been heralded as a great thing for the vibrancy of the CBD.

Lord mayor Robert Doyle likes to tell the story of how Victoria’s capital was once derided as a “doughnut city”, where at the end of the day all the office workers would flood back to the suburbs, leaving behind an empty, soulless centre.

That dead interior is now long gone, largely thanks to the boom in apartments.

But could these 19,000 new homes in the CBD be the start of a dangerous trend, one that is much more difficult to fix?

Large residential buildings can have hundreds of individual owners, making them extremely difficult to resell and revamp.

This means large parts of the city risk being “frozen” as ageing apartments for decades, if not centuries, at a time.

While older office buildings are often redeveloped into apartments, it is almost impossible to reverse the process, stoking concerns that Melbourne could go from a doughnut city to a city of dormitories, devoid of major business.

National head of research with Savills Australia, Tony Crabb, said office towers could be easily sold and renovated because they typically had one owner.

“A residential tower can have 250 owners and of course getting them to agree to sell the tower to one owner is nigh on impossible,” Mr Crabb said.

“Let’s say the tower reaches the end of its life in 60 years time and it should be demolished to make way for something else. How do you get all those owners to agree? The answer is it’s extremely difficult.”

BEFORE AND AFTER: This building at 85 Spring Street (pictured left) is one of a number of office buildings in Melbourne to be converted into luxury apartments (artist’s impression pictured right).


Tall building design expert Dr Philip Oldfield is concerned that not enough thought is being put into how long Australia’s towers will survive, and how they will be used in the future.

He recounted this statistic: In the history of the world, there have been about 3700 towers taller than 150 metres constructed. But only four of these towers have ever been demolished.

“You build a tower today and it could last 200, 300, 500 years and we are not considering that. That is a problem,” Dr Oldfield said.

Not only is it hard to convert apartments into offices, many of the apartments being constructed today are so inflexible you cannot significantly renovate to suit changing lifestyles, he said.

“If you think of your suburban house, they have a degree of flexibility, you can add on, adapt and personalise the building,” Dr Oldfield said.

“A lot of tower blocks are rather soulless. You can’t really knock down walls and extend apartments.

“The young people moving in tend to move out again when children come on the scene, and therefore towers become quite temporary accommodation places. You don’t build that long-term community there.”

Cr Doyle has raised his own concerns about booming residential development which comes at the expense of office space supply.

In this opinion piece for Domain last month, he called for greater incentives for developers to build commercial space.

Back in 2005, there was almost 2.7 million square metres of office space in Melbourne’s CBD, compared to just 563,900 square metres for housing, a ratio of about 1: 5 in favour of offices.

But in the decade that followed the number of apartments within the Hoddle Grid more than doubled. And between 2010 and 2015, the amount of office space actually went slightly backwards.

Urban development experts say it can it can be a delicate balancing act between living and working in the city. While businesses like the vibrancy and safety that a residential population brings, there can too much of a good thing.

“A person sitting in their office doesn’t really want to look out of the window and see somebody hanging out their washing,” Tony Crabb said.


“There are instances of cities where the CBD has died and the businesses have moved out into the suburbs. Los Angeles and Johannesburg are two examples,” he said.

“It’s unlikely that that will happen in Melbourne because the CBD is in effect anchored by the Parliament and the law courts. But as the nature of work changes and people become more mobile and more fluid in how they work, business activity can leach out into the suburbs pretty easily.”

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