Shaky start for Allan’s prized housing targets as Vic records dip in completed builds

The Allan government has failed at the first hurdle to meet its prized housing targets, falling 20,000 new homes short in its inaugural year as completed builds trend “backwards.”

The Allan government has failed at the first hurdle in the race to meet its prized housing targets, falling 20,000 new homes short in its inaugural year, new data has revealed.

Fresh ABS figures show the state government’s ambitious goal of building 80,000 homes a year on average between 2024-2034 – or 800,000 over the decade – is off to a shaky start.

With just 60,220 homes completed last year amid the state’s housing crisis, property figures are pointing the finger at Victoria’s rigid tax regime while warning that housing completions are now trending “backwards.”

The state recorded its lowest number of dwelling completions since early 2023 between October to December, with just 13,955 homes built – an 8.8 per cent decrease from the previous quarter.

The figures marked a downward trend over two consecutive quarters.

The Allan government has failed at the first hurdle in the race to meet its prized housing targets. Picture: NewsWire

According to the data, the number of unit commencements also dropped slightly, falling from 53,777 in 2023 to 52,808 last year. The total completions, however, are up 3785 on last year.

While the Allan government initially pledged to build 80,000 homes a year, within months of the 2023 unveiling of the Housing Statement - its centrepiece housing policy - it quietly abandoned the yearly goal and moved to 800,000 over the decade.

Property Council Victorian Executive Director Cath Evans, who has spent months warning the Allan government that it is unlikely to meet its housing targets unless it commits to reducing its “punitive taxes”, said the data revealed that Victoria’s dwelling completions are “now going backwards”.

“The Property Council’s latest sentiment survey highlighted that the property industry’s confidence in the Victorian Government’s ability to plan and manage growth has collapsed to an all-time low,” Ms Evans said.

“For as long as Victoria’s cumulative tax burden remains, developers will move to more feasible markets interstate, and our housing targets will continue to slip further away.”

The state government has falled 20,000 new builds short. Picture: File image

She also pointed to a recent report which showed Victoria had “lost out on 81,000 new homes and 90,000 jobs” in the past nine years due to Labor’s aggressive tax regime.

The property industry boss said the government had a choice at the upcoming May budget.

“Either continue to follow its taxation yellow-brick road or reset its approach and unleash Victoria’s development potential through critical tax relief,” she said.

Urban Development Institute of Australia (UDIA) Victorian chief executive Linda Allison said while the yearly completion rate shows an improvement, the forward commencements “aren’t keeping pace”.

“Every year those targets aren’t met compounds the housing affordability crisis,” she said.

“To meet future population growth and the Government’s targets, industry will need support across all housing typologies – greenfield and infill development and everything in between. “

Ms Allison called on the state government to reform its Windfall Gains Tax - which is unique to Victoria - calling it a “handbrake on development”.

“UDIA Victoria has identified windfall gains tax reform as a way to improve project feasibility across a range of housing types without materially impacting state government revenue,” she said.

The state recorded its lowest number of dwelling completions since early 2023 between October to December. Picture: Aaron Francis

Senior Liberal David Davis said while the Allan government “talks a big game on housing” the figures actually show that completions are “going backwards”.

“The state government hasn’t been able to bring through enough land, enough alternatives for people and they are putting the pressure on by more and more and more taxes,” he said.

A Victorian government spokesman said the data showed that Victoria “continues to lead the nation for home approvals, starts and completions” and that the state had recorded a year-on-year increase in home completions and home approvals.

“We know there’s more to do, which is why we’ve introduced bold reforms to deliver more homes near train and tram stations, a ten-year pipeline of land for family homes and backyards, and to slash stamp duty for off-the-plan apartments, units and townhouses,” he said.

“If it was up to the Property Council, Victorians would be competing dollar-for-dollar against cashed up foreign buyers that lock them out of the housing market.”

Originally published as Shaky start for Allan’s prized housing targets as Vic records dip in completed builds