Australia’s largest home builder says the Victorian government must give up its “ideological attachment” to higher-density living to meet its housing targets after Premier Jacinta Allan flagged Labor will seize planning powers from councils that fail to unlock more land for development.

Ms Allan and Planning Minister Sonya Kilkenny on Monday revealed they had revised their housing approval targets for all metropolitan councils from 2 million extra homes by 2051 to 1.78 million.