The winners and losers in Victoria’s housing shake-up

Premier Jacinta Allan has spent the week unveiling a suite of housing measures she hopes will lift Labor out of its political and economic woes.

Whether you’re in the market for a home, an owner-occupier or looking to sell, subdivide or downsize, find out what’s in the strategy for you.

The Allan government’s housing plan will reshape the city’s skyline.Credit: Joe Armao

I’m looking to buy soon. What’s in it for me?

If you’re hoping to buy a home in the next 12 months, you could save tens of thousands of dollars under the immediate changes to stamp duty. The state tax was temporarily slashed as of Monday on all off-the-plan units, apartments and townhouses.

If you’re an investor, the concession – which is uncapped – also applies to you.

The state government estimates that its changes would cut stamp duty for buyers of a new $620,000 apartment down to just $4000, saving them $28,000.

You can also still save some cash if construction has already started. A property that is half-complete will incur stamp duty on the value already finished, but a buyer can receive the concession for the other half.

What if I’m looking to buy, but not yet?

Haven’t quite saved your deposit in time to buy before for the stamp duty offer ends in a year? You might be able to nab a new apartment close to public transport or even a new house with a backyard in the ’burbs.

The first instalment of the government’s week of announcements was 50 new activity centres in Melbourne’s middle ring, allowing more density around railway and tram lines.

The government also has plans for more homes in outer suburbia.

In what it estimates to be the biggest one-off commitment to unlock land for housing-and-land developments in the state’s history, it has guaranteed timelines for the development of 27 new greenfield areas in coming years.

The first announced are undeveloped parts of Melton and Caroline Springs in the west, Cardinia Creek in the south-east and Beveridge in the north.

Two slices of government-owned land closer in – next to Oakleigh and Footscray train stations, ideal for apartments – will be put on the private market.

What about people in the regions?

Allan has acknowledged that regional and rural Victoria have different needs to Melbourne.

On Friday, she announced a plan for more housing in the regions, saying the first 1000 of these new social and affordable homes would be built in the Barwon, Goulburn, and Gippsland areas.

Premier Jacinta Allan (right) and Planning Minister Sonya Kilkenny.Credit: Jason South

Will my property value go up or down?

It’s too early to say, and there are many variables that determine the value of a property.

The government is making a supply and demand argument: it says there will be downward pressure on property prices because more new homes will soon be put on the market.

However, the opposition has warned that a planned new levy on developers to fund schools, parks and public transport – announced this week – would be passed on to Victorian buyers.

Developers argue the price of existing apartments will need to rise before it will make economic sense for them to start building more.

Even economists have mixed views about what it all means for property prices. So … watch this space.

I own a home on a large block of land in the suburbs. What do I need to know?

The premier this week vowed to make it easier for Victorians to speed up subdivisions and the construction of townhouses – so, two homes, one lot.

Options include 10-day subdivisions – down from 60 days or longer – and planning permit exemptions based on certain criteria being met. The changes are expected to come into effect by April 2025.

It follows a regulatory change late in 2023 that allowed home owners to build small second homes – such as granny flats – without planning permits.

So if you like the prospect of your children living next door or are keen to make some extra cash from unused land, it’s good news

Some neighbours will be less happy, though, about having more homes looming on their fence line – especially if they bought a larger block for privacy – and the loss of green backyards in their suburbs.

What about people hoping to downsize?

More activity centres means more apartments in medium and high-rise residential buildings for empty nesters, particularly in Melbourne’s east and south-east.

The original 10 activity centres were announced in suburbs such as Camberwell and Preston, but the first 25 of the new 50 centres can be found in suburbs including Brighton and Toorak. The locations of the remaining 25 zones will be announced later this year.

Changes to stamp duty will also benefit people looking to downsize – if they’re ready to buy in the next 12 months.

I live in one of the new activity centres – what will happen?

You’ll have a lot more neighbours. High-rise apartment buildings will spring up – though it’s not clear how tall they will be, other than taller buildings at the “core” of the local transport hubs, with heights tapering downwards to 800 metres out. Towers in the first 10 activity centres – announced in August – will range from three storeys to 20.

Those opposed to higher density living in their suburbs are clearly unhappy with the government, with a high-profile protest taking place in Brighton last weekend.

Planning Minister Sonya Kilkenny stressed this week that each neighbourhood had different needs and would not end up looking the same, and promised communities would be consulted before height limits were determined.

I’m worried about all these new apartments. Will they be built to standard?

The government knows this is a major problem. This week, Kilkenny announced the Victorian Building Authority would be replaced with a new industry watchdog, known as the Building and Plumbing Commission.

It will have stronger powers, including the ability to force future substandard work to be fixed before owners move in. The commission will also be able to block apartment sales if defects are not rectified.

The overhaul follows an independent review that found families had been left traumatised, out of pocket and with unfinished homes after VBA failures allowed poor work and unethical conduct to flourish – triggering an apology from the watchdog’s boss.

However, if you are already dealing with a dodgy build, the news is not so great. The new watchdog will not have retrospective powers.

What’s in it for renters and landlords?

The government has promised rental reform is on the way.

On Saturday, Consumer Affairs Minister Gabrielle Williams provided more details about commitments for renters made in last September’s housing statement.

Rental Dispute Resolution Victoria (RDRV) will open in June next year to offer tenants an easier and free way to raise issues without having to go through the bureaucracy of the Victorian Civil and Administrative Tribunal (VCAT).

The portable bonds scheme, which will allow tenants to transfer their bond from one property to another when they move to reduce their upfront costs, will not roll out until 2026 following IT testing.

Williams said that since the new Consumer Affairs rental taskforce began its work in March, dodgy rentals have resulted in 60 fines worth a combined almost $450,000.

Are other changes are on the way?

Aside from further rental reform, the future infrastructure levy is still to be worked out. This change will require all developers, not just those in growth areas, to help pay for things such as schools, roads, parks and drainage.

But one thing is clear: more housing means more people, so amenities in affected areas will need to keep up.

With Rachel Eddie

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.