Does the Victorian Government Only Care About Apartments?

The Victorian Government Housing Statement

In September 2023, the Victorian Government released its Housing Statement and set a target of 800,000 homes to be built in a decade. This bold target relied to a large extent on planning reforms allowing for more homes to be built with “good decisions, made faster.”

At the same time, the Victorian Government confirmed its commitment to a policy that 70% of new homes in Melbourne would be built in established areas and 30% built in greenfield areas.  This 70/30 policy is intended to slow down urban sprawl. This was complemented by an expectation that more homes would be built in areas with “good access to services, transport and green spaces.”

Under the heading, “Cheaper housing, closer to where you work,” the Housing Statement says on page 15 – “We need to create more housing … [and] that means going up and out – not just out.” There is also mention of more homes near rail projects, such as the infamous Suburban Rail Loop and priority precincts. In addition, there is a reference to the Development Facilitation Program that improves the planning process for “medium to high density residential developments.”

All the above suggest that the Victorian Government is fixated on building apartments and has little or no interest in the detached home building market. Other government announcements, including stamp duty concessions for off-the-plan apartments only, further strengthen this perception. Ministers also prefer to attend media and photo opportunities at high-rise apartment projects where they can wear a hard hat and high-vis and talk about larger numbers.

It is probably fair to say that the government sees apartments as being the best housing choice for consumers. The problem for the government is that consumers don’t seem to agree with them. Our members regularly remind us of this. The strong consumer preference is for a block of land to build a house or maybe a townhouse on. Many also want to avoid the risk of having to deal with an owners’ corporation (body corporate).

It is worth noting, however, that despite this preference, a number of Housing Statement reforms do support the building of detached housing and smaller multi-unit developments like townhouses. The Townhouse and Low-Rise Code, the Single Home Code, reforms for Small Secondary Dwellings, and more emphasis (if not yet enough) on speeding up the release of more land for new homes, all provide support for this major part of the home-building industry.

Finally, the Victorian Government’s recent working from home announcement further undermines the perceived value of living in an apartment near a train station. If you are going to be able to avoid a commute at least two days a week, it becomes easier to make the decision to live in a detached house and have your own block of land.

The market for new detached homes and townhouses still has a bright future. Ultimately, consumers who pay for a home to be built, will not be denied their choice for a new home.

HIA members are welcome to contact us online or on 1300 650 620 for further advice.