Housing completions have stalled in Victoria, with the state on track to miss building targets by hundreds of thousands.
Victoria’s building completions are at an 11-year low with the state on track to miss its 10-year 800,000 new homes target by more than 200,000 and close to four years.
Australian Bureau of Statistics data released yesterday shows that across the 12 months to the end of September last year the state built 54,368 new homes.
It’s the lowest figure since December, 2014, when just 53,432 were finished.
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In a further blow to hopes the state’s housing affordability could improve, separate ABS data shows more than 8063 dwellings were approved for demolition across the state in the same timeline.
It means that in real terms Victoria added just over 45,000 new homes to its total number of residences in the most recent 12 months of data, despite federal and state government efforts to boost construction work in a bid to address housing affordability.
In 2023 the state government announced a Housing Statement in which they outlined plans to build 800,000 new homes by 2034, or 80,000 a year.
Since the 2024 commencement of that timeline the state has averaged just over 4800 new homes a month, with 101,010 completed.
New housing construction is declining in Victoria, despite growing government supports.
If the state continues on that trajectory, which includes higher building completions earlier in 2024, it would take almost 14 years to reach the 800,000 homes target and in the ten-year timeline would achieve just 577,200 new builds by 2034.
Property Council of Australia Victorian executive director Andrew Lowcock said the latest figures highlighted a concerning handbrake on a state that had in recent history led the way for home building.
“A growing and complex web of property taxes, from increased land tax to the windfall gains tax and nation’s worst global investor taxes, are scaring away investment and delaying the delivery of new housing projects,” Mr Lowcock said.
“The Property Council has been warning for years that these settings would drive future investment away and stall projects, and the data now makes that reality impossible to ignore.”
He added that building homes at 2014 levels while hosting the fastest growing population in the country was an unsustainable mismatch.
The completion of new homes across Victoria has fallen to lows not seen since 2014.
“If the next state government is serious about meeting our housing targets, urgent tax relief must be central to the 2026 Victorian election conversation,” Mr Lowcock said.
Housing Industry Association senior economist Tom Devitt said the state was a “long way behind its targets however you measure it”.
“There are going to need to be some more reforms to taxes and planning and skilled migration and such to get us to a situation where we are talking about 800,000 in a decade,” Mr Devitt said.
The economist said while house construction had reached the level it needed to hit federal targets around the nation, Victoria’s was short of the numbers required here by several thousand a quarter — and apartment, unit and townhouse numbers were worse.
He added that population growth and housing demolitions were additional variables on how effective the 800,000 homes target would be in addressing affordability.
“Population growth has been higher than expected, and if on top of that a lot more demolitions take place in order to get more multiunit construction, we know that will subtract from the end benefits of dwellings we do get,” he said.
HIA senior economist Tom Devitt said Victoria cannot hit its target without significant changes to tax and development policies.
If demolition approvals continued at the current average of 633 a month it would mean the actual increase in new homes was reduced by almost 76,000 — though demolitions do typically lead to additional new homes being built longer term.
A government spokesperson said the data also showed Victoria had built about 10,000 more homes than NSW, and 20,000 more than Queensland.
“The best way to make housing fairer for young Victorians is to build more homes and Victoria is building thousands of more homes than any other state,” they said.
“We know there’s more to do, that’s why we’re delivering the biggest overhaul of Victoria’s planning laws in decades, bringing Victoria’s old-fashioned ‘NIMBY’ planning laws into the modern era.”
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