The AFR warns that Victoria has little chance of meeting its target set by former Premier Dan Andrews to build 800,000 new homes over the decade.
“A total of 51,045 new dwellings approved in Victoria for 2023, according to the ABS, the lowest in 10 years, and down from 62,281 in 2022 and nearly 71,000 in 2021”, The AFR reported.
“Victoria has never approved more than 70,730 new dwellings in a calendar year since Labor was elected in 2014”.
Property industry insiders have also ridiculed Victoria’s fantasy housing targets.
“I just don’t see how they’re going to hit 80,000 this year given the difficulties of obtaining suitable land, as well as the supply constraints on labour and building materials”, REIV director Richard Simpson told The AFR.
“It is really under-investment by governments over a long period of time. And now it’s being turbocharged by the fact we’ve got a significant inflow of migrants to Australia, many of whom are coming to Victoria. They need somewhere to live”, Simpson said.
Property Council of Australia state executive director Cath Evans lamented that “one of the largest obstacles to our industry delivering these new homes is the challenging investment environment in Victoria and the difficulties developers are having in securing finance for new projects”.
Meanwhile, opposition housing affordability spokesman, Evan Mulholland, labelled Labor’s 80,000 homes a year target a “con job”.
“That is not achievable in the slightest”, he said. “The target just gives the illusion of doing something”.
They are not wrong to criticise the Victorian government’s target.
Victoria has led the nation’s collapse in dwelling approvals, with only 51,000 homes approved for construction in 2023, 29,000 below the 80,000 target:
This represented the lowest annual dwelling approvals figure for Victoria in a decade.
Meanwhile, Victoria’s population is growing at a record pace, with the state adding 182,000 people in 2023, nearly entirely due to record net overseas migration:
According to the state government, this strong growth in population is projected to continue indefinitely:
The vast bulk of Victoria’s population growth will come from net overseas migration:
As a result, Victoria faces worsening housing shortages, whereby population forever outpaces home building.
Victoria completed only 56,300 dwellings in the financial year ending September 2023, and has never built more than 71,000 homes in a single 12-month period:
Therefore, the notion of building 80,000 homes every year for ten years is laughable.
It is even more unrealistic when the state government has devoted the majority of the state’s construction resources to its Big Build projects, which eat up available personnel, equipment, and supplies.
According to Phil Dwyer, president of the Builders Collective of Australia, the residential building industry is in deep trouble, making large-scale infrastructure projects more tempting to builders and tradies.
“It’s had a big impact and that, of course, has impacted on the program of building all these houses that the government has targeted. We’ve got no hope in the world of building or meeting those targets”, Dwyer warned.
“It drives up the cost of labour but more importantly, we don’t have enough tradies within the building industry to be able to build these homes”.
Keith Ryan, executive director of the Housing Industry Association of Victoria, shared similar views, warning that members were struggling to attract workers due to competing employment opportunities.
“The only thing that makes it less of an issue than it could be is the fact that we’ve got a big slowdown in new-home starts coming through”, he said.
As illustrated above, Victoria’s population is officially projected to grow to 11.2 million by 2056, with Melbourne reaching 9.0 million.
This massive population increase will require huge volumes of infrastructure and housing if the state is to avoid becoming overcrowded and homeless.
The only genuine solution is to lower net overseas migration to a level commensurate with Victoria’s (and Australia’s) ability to build new dwellings and infrastructure, while also safeguarding the natural environment (especially water resources).
Otherwise, Victorians and Australians will continue to face shortages and deteriorating living conditions.
