CLOSING IN: Sydney Has Lost Its Mojo And Melbourne Is Catching Up... Fast

Melbourne fireworks – underwhelming. Picture: Getty Images

Sydney is the emerald city, a shining town.

It’s rarely shining as brightly as right now with the lights of the Vivid festival illuminating the city each evening. Or think of a hot summer’s day spent on the harbour or on New Year’s Eve with the magnificent Harbour Bridge as the backdrop to the world’s best fireworks display.

Melbourne is very… different.

Nestled on the muddy Yarra and with a bay remote from the city – unless you live in Port Melbourne or St Kilda – it has grown up with a classier more stylish feel.

Lamborghini versus Rolls Royce, WRX versus 208 GTi.

I grew up in one and lived for a time in the other and for me Melbourne wins hands down. It seems that an increasing number of Australians, both new and established have the same view.

Mark Steinart, Stockland MD, is reported in the AFR this morning as having said “Ten years ago I wouldn’t have felt it necessary to come down to Melbourne to do business”. Now he says it’s a market he can’t ignore.

Of course, a large part of that is the land releases that have allowed the footprint of Melbourne to grow and companies like Stockland and Australand to be part of that growth. But also a result of these releases and the impact of keeping property prices relatively cheap, at least by Sydney standards, is that the gap between Sydney and Melbourne’s populations has closed to just 400,000.

By 2053, Melbourne will take back the mantle of Australia’s biggest city.

AMP Capital Investors chief economist Shane Oliver told the AFR that Sydney has “lost its mojo” after the Sydney Olympics. BAML chief economist Saul Eslake (himself a Melburnian) says that its down to better planning while Melbourne’s Lord Mayor Robert Doyle says much can be said about the Postcode 3000 program from 20 years ago to bring residents into the city.

The key to Melbourne’s population growth seems to be affordability. You can expect to pay up to 30% less in Melbourne for its Sydney equivalent.

That’s not to say that Sydney is taking the news that Melbourne is catching up lying down. Former Sydney Lord Mayor, and now chair of the Committee for Sydney, Lucy Turnbull, told the AFR that the debate should not descend into a “football match”. She does helpfully, however – and completely non-parochially – add that Sydney contributes more to GDP than Melbourne, 22% to Melbourne’s 17%.

Can Sydney get its mojo back? Only time will tell – but Melbourne is still on the rise.

In the meantime, Melburnians looks like they might have to deal with another Swans flag in 2014.

That should put the debate to the side for a time.

You can read more of the AFR article here.

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