Where Allan government is stockpiling properties, in a move feared will lead to rental rises

As Victoria’s housing crisis worsens the Allan government is stockpiling rental properties, in a move experts warn could force leases higher. These are the Melbourne suburbs being targeted.

Highpoint Shopping Centre in Maribyrnong, a suburb the Allan government is stockpiling properties in.

The Allan government is stockpiling rental properties to bolster its social housing numbers in a move experts warn could force rents higher.

Homes Victoria – the state’s public housing operator – has been working to secure properties direct from builders, offering five-year fixed term leases and guaranteed annual rent increases of 5 per cent.

Documents seen by the Herald Sun reveal the agency is desperate for three-bedroom homes in suburbs including Albion, Ardeer, Braybrook, Maidstone, Maribyrnong and Sunshine as well as inner city hotspots Brunswick, Carlton North, East Melbourne and Kensington.

It comes amid state’s housing crisis worsens and a ballooning waitlist for social housing blowing out to more than 61,500.

In July, the government signed a $100m contract to demolish three public housing towers as part of a plan to replace 44 towers and privatise the majority of the land as part of its Housing Statement.

Kensington is hot property for the Allan government. Picture: Ian Currie.

Critics have warned the plan would displace 10,000 public housing residents.

A government spokesperson confirmed the properties would be used to address immediate requirements and fill gaps in Homes Victoria’s portfolio. They said last year Homes Victoria leased 747 properties across Victoria, nearly 100 less than in 2022-23.

But the number is expected to soar this year.

Between June and December the number of public houses fell 446 – from 64,993 to 64,547 – while overall social housing units dropped from 88,189 to 88,135.

Victoria is now more than four years into what was spruiked as the nation’s biggest social housing build.

Launching the $5.3bn program in 2020, the state government pledged to build 12,000 new homes by 2024.

Thousands of families have been added to a growing waitlist for housing in that time.

Shadow housing minister Richard Riordan accused the government of soaking up supply to compensated for its “bungled big build”.

Former Premier Daniel Andrews gives a press conference at a Kensington Housing site. Picture: Luis Enrique Ascui

“Until the Allan government can create extra homes for its public housing tenants it must immediately cease its demolition plans of public housing,” he said. “Melbourne’s rental housing affordability crisis has been orchestrated and driven by appalling project management and out of control taxes.

“Now we see government using its money to drive rental prices higher and to further restrict private rental options.”

Property Investment Professionals of Australia chair, Nicola McDougall, said it was “unbelievable that the Victorian government – which has introduced a raft of punitive rental reforms as well as its woeful new land tax over recent years – is now expecting everyday property investors to help remedy the rental crisis”.

Head of Property Investment Professionals of Australia, Nicola McDougall. Picture: John Gass

“While PIPA has not been consulted by the Victorian government on this issue,” she said. “Rather than sneakily siphoning properties out of the private rental market to fix a quagmire of its own making, the Allan government should instead start addressing the fundamental reasons why investors are selling up in droves, which is its new land tax regime as well as anti-investor rental laws.”

The latest data showed 31 per cent of investors who sold at least one dwelling in the year to August had sold in Victoria, with nearly 22 per cent selling in Melbourne, she said.

“The number one reason for investors selling in Victoria over that period was increased land tax or government charges, followed by increased general holding costs, and concerns about changes to tenancy legislation,” she said.

A government spokesperson said just 0.1 per cent of private rental properties in Victoria were leased by Homes Victoria.

“While vacancy rates remain steady across Victoria we know the best way to get more rentals on the market is to build more homes – and the data shows Victoria continues to build and approve thousands more homes than any other state in the country,” she said.

Originally published as Where Allan government is stockpiling properties, in a move feared will lead to rental rises