“The status quo is not an option,” the spokesman said. “Our bold reforms to the planning system will clear the backlog of approvals quickly,increasing the supply of homes and giving industry greater certainty with a planning system that works for Victorians – not against them.”
Australian Housing and Urban Research Institute managing director Dr Michael Fotheringham said it was a worthy ambition,although the bottom had fallen out of the home-building sector,which had been hit by rising interest rates,soaring costs,and shortages of labour and raw materials.
In addition,Victoria has been forced to compete against other states,particularly Queensland,with similar ambitions to build more homes.
“We’ve got a really challenging economic environment ... but they’re part of the reason we have to be ambitious because the situation is getting pretty dire in terms of housing supply and housing affordability,” Fotheringham said.
He said the government had outlined its ambition and vision for housing,but it now needed to outline the funding required to deliver it.
“There is a decade ahead in the housing statement … but the budget is not part of that,there are no funding estimates or projections.”
According to state government modelling,an average of about 57,000 homes will be needed each year just to keep pace with population growth,and prevent the situation facing home buyers and renters from getting even worse.
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But according to the government,Victoria is on track to build an average of about 54,000 homes a year over the next decade – well below the level needed to place downward pressure on house prices or rents.
To relieve “acute pressure”,the government has estimated Victoria will need a total of 2.24 million extra homes by 2051 – a projection that was used to derive the promise to build 80,000 homes a year.
Housing Industry Association Victorian executive director Keith Ryan said the target was “extraordinarily ambitious”,warning the state would need more than a few big tower blocks,with rising costs,labour shortages and a cumbersome regulatory environment making it tricky for many builders.
“You really do need to encourage a lot more townhouses,smaller multi-unit developments in bulk numbers,” Ryan said. “Even if we had a complete greenfields,build-whatever-you-like approach,it wouldn’t get there.”
The government has also been failing in its long-held ambition to ensure that 70 per cent of new homes are built in established parts of Melbourne. The latest figures show that in 2021 just 44 per cent of new homes in Melbourne were built in established suburbs,down from 67 per cent in 2013.
As reported inThe Age this week,new projections from Victoria’s Department of Transport and Planning show the state’s population soaring from 4.9 million to 6.4 million by 2036,and 54 per cent of the growth will be concentrated in the city’s outer west,north and south-east.
KPMG urban economist Terry Rawnsley said the target of 80,000 new homes a year remained a good aspiration,providing an average target to work towards over the next decade.
“It’s really about saying,the market is weakening,it’s not what we want,how do we work ourselves through to get towards that 80,000 average annual number?” Rawnsley said.
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