VICTORIA’S PLANNING MAZE NEEDS LOCAL KNOWLEDGE

Developing property in Melbourne, Victoria, requires local expertise due to its many levels of governmental processes and strong influence from outside stakeholders.

Investing property in Victoria and Melbourne has always been an attractive proposition, with over a century of property price rises. In fact, despite any number of different external environmental and economic conditions, historically property prices in Melbourne double every 7 years. Given much of the growth in Melbourne property demand is due to strong underlying shifts in population, opportunities for property investment in Melbourne promise to become ever more promising.

Developing in Victoria necessitates navigating a complex set of processes where, unlike other jurisdictions, policy, discretion, and stakeholder opinion play a role in the success or failure of the venture.

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Not only does the planning process involve multiple levels of government, but outside stakeholders and neighbours can strongly influence the outcome of planning decisions.

The 79 councils that make up the local government in Victoria make most of the planning decisions that affect their area, for example, deciding whether to grant a planning permit for a new use or development, and key permit decisions. Local governments are responsible to a number of stakeholders, and take neighbours’ feedback on proposed developments very seriously.

Developing in Victoria requires knowledge of the political and policy environment, as the Minister for Planning has responsibility for a range of functions and, in certain circumstances, has the power to intervene in the process. The Minister for Planning is also the responsible authority for certain large-scale developments and planning scheme areas, such as the Fishermans Bend Urban Renewal Area.

To successfully navigate various stakeholder priorities, the nuance of enforcing planning rules and while seeking discretion to accommodate the latest policy priorities and political demands requires strong, comprehensive advice from trusted experts.

Here are some examples of situations we have encountered at The Agenda Group:

1 NOT IN MY BACKYARD

Many residential property investors seeking to develop in Melbourne assume that they can simply apply for a planning permit, wait for approval and start work. In actual fact, each of Victoria’s 79 local government areas has unique priorities and stakeholder considerations.

Most planning applications are advertised, with written notice about the application sent to neighbours and a sign displayed on the land. Through this process, neighbours are informed about a proposal and are invited to inspect the plans and make submissions that are heavily taken into account in deciding planning permit conditions.

Given residential neighbours can play such a role in the success of a project, it is vital to communicate the right messages and strike the right tone from the outset of the project.

2 HIGH-RISE, HIGH STAKES

Outside stakeholder influence is also vitally important in commercial property development, and often this is where the rubber meets the road in State-level policy and political considerations.

In fact, recently enacted planning controls allowing for extra height or floor space for buildings in the centre of Melbourne that can demonstrate a public benefit, give some discretion for decision-makers to determine what falls under ‘public good’. Knowing the current political and policy priorities that inform a decision-maker’s determination can make the difference between a high-rise skyline-shaping building or a mid-rise apartment block.

3 BUILD IT, BUT WILL THEY COME?

Melbourne’s outer suburbs have some of the fastest growing populations in Australia. Thousands per week flood into the growth areas, and developers stand to make great profit if they can navigate the complicated challenges associated with greenfield development.

To build new development in Melbourne, there are yet more decision-makers and stakeholders involved.

The Metropolitan Planning Authority (MPA) is the statutory authority that oversees the development of Precinct Structure Plans (PSPs) for Melbourne’s growth areas.

Developers need to obtain a Precinct Structure Plan (PSP) from the Metropolitan Planning Authority (MPA) to lay out roads, shopping centres, schools, parks, housing, facilities, employment, natural open space and connections to transport for new communities before planning on the development even begins.

Understanding the strict constraints that a burgeoning population puts on a local government’s budget is crucial to obtaining planning approval for a development, but also understanding the rollout timeline of enabling infrastructure can make massive differences in the sale price of the finished development down the road.

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