Mike Zorbas: my 10-step plan to help Victoria ‘reclaim housing crown’

Victoria is no longer the nation’s golden child on housing and desperately needs a solid housing plan to futureproof the Great Australian Dream.

So far, full marks go to the Australian government for setting national housing targets for 2029.

The target is 1.2 million new homes, including at-market, key worker and social housing. Federal money is on the table for the last 200,000 homes and there is a reward for infill density.

This is a long overdue national strategy to fix a growing housing deficit and under-resourced state planning systems in a land rich, wealthy nation.

The Grattan Institute says those 200,000 extra homes could save renters $32bn over the coming decade.

But not in Victoria.

Victoria no longer has enough money to do what it needs to do in the housing space.

It has already levied the consumer of new property to the eyeballs over the past few years. In some cases, for every $10 spent buying a new home in Victoria, almost $4 is taxes from three levels of government.

Property Council of Australia chief executive Mike Zorbas.

Victoria used to be the nation’s golden child on housing and all types of land supply. But with population, taxes and borrowing costs all up, and house and apartment supply way down, the state’s housing crown has been slipping these past few years.

The numbers tell the story. In 2022, just 5100 apartments went up for sale in Melbourne, according to Charter Keck Cramer. Compare that annual volume to 23,500 apartments in 2014 and 16,500 in 2017.

Based on lot sales 2018-2021, Urbis shows active lot supply will run out in three years in new communities in Melbourne.

Meanwhile, the median lot price for land has grown from $212,000 in 2016 to $307,000 in 2021. This is due to market forces and increased government taxes and fees.

And then there are the half a million new people who will be living in Melbourne’s western and northern growth corridors before the end of the next decade. That translates to 43,000 new Melbourne homes needed each year.

That does not include regional cities and rural areas, or Victoria’s share of the 200,000 new homes agreed by national cabinet a fortnight ago.

And yet there is no sign of a Victorian strategy for appropriate higher density outcomes in growth areas which are needed to hit, let alone exceed, Victorian baseline housing targets to 2029.

Equally mystifying, Victorian infill sites cannot get the timely Planning Minister and departmental attention they need to meet those national targets.

Maybe the Victorian government is waiting for its housing statement, due very soon. This is a poor way to administer decent projects that can be greenlit immediately. These processes also slow down a year in advance of each state election, long before the caretaker period. More inefficiencies home buyers and renters can’t afford.

What then would a successful Victorian Housing statement look like? I suggest:

1. Partner with the federal government to fund transport that supports housing.

2. Actively resolve all projects delayed in planning as a first priority.

3. Get key infill projects going. Also, keep choice alive. Accelerate and resource precinct structure planning to unlock land. Get Precinct Structure Plans complete in two years, not the current three to five-year dawdle.

4. Address post-planning permit delays and make approval authorities accountable. Looking at you, Melbourne Water.

5. Expand fast-track planning channels and complete previously announced planning system reforms.

6. Continue smart energy efficiency measures that save owners and renters money in the long term.

7. Incentivise scale key worker housing by bringing the private sector to the table.

8. Target support for customer-led purpose-built student accommodation and retirement living communities. This aggregates community need and government service delivery around transport.

9. Take a break from the annual cycle of new or increased property taxes. Redesign the taxes that directly diminish supply of strategic new housing, especially the Windfall Gains Tax

10. With all changes in the housing statement, grandfather existing investments and processes to allow capital to roll over into the next wave of housing projects when the cost of investing allows.

It is Victoria where the nation risks falling short on our national housing supply needs.

The Victorian public and private sectors combined have the expertise and the experience to close the housing deficit, remembering it is the private market that does nine-tenths of the lifting on housing supply.

Accepting the sheer scale of the supply challenge is the first step. The 10 steps I’ve listed follow from that.

Only then can Victoria reclaim its housing crown.

Mike Zorbas is the chief executive of the Property Council of Australia, a supporter of News Corp Australia’s Saving The Great Australian Dream campaign