Melbourne residents may need to tighten their belts if urban sprawl is to continue at current rates. 

A report from the Victorian Eco-Innovation Laboratory at Melbourne and Deakin Universities suggests that Melbourne's food bowl is being eroded by urban sprawl. The continued development around Melbourne's outer edges has been eating into surrounding farmland for some years now. Developers appear keen to take advantage of relatively cheaper development costs in these areas rather than the more expensive exercise of obtaining planning permits and residential permission for the redevelopment of Melbourne's middle and inner regions.

Modelling estimates an annual loss of agricultural output from Melbourne’s food-bowl of between A$32 million and A$111 million according to one recent study. Loss of agricultural production is just one of the many market adjustments which may arise as this land use shifts from being used for agricultural to urban purposes. This also has the potential to alter the value of water as demand characteristics alter with this shift.