Victoria falls 20,000 short on home-building target

Victoria fell 20,000 homes short of its housing target last year, calling into question the state government’s ability to meet its promise of 800,000 properties being built in the decade.

The data, released by the Australian Bureau of Statistics (ABS) on Wednesday, covered the first full calendar year since former premier Daniel Andrews released the housing statement in September 2023. His successor, Premier Jacinta Allan, has since made further commitments to cement housing affordability as a top priority for her government.

Premier Jacinta Allan, Housing and Building Minister Harriet Shing, and former premier Daniel Andrews in 2023.Credit: AAP

ABS data shows an annual total of 60,151 dwellings were finished in 2024, a slight improvement, with 56,220 completed in 2023. But it is still below the long-term average of the last six years.

The number of houses and apartments finished in the year is still well below the 80,000 average needed to meet the government’s 2023 commitment that 800,000 dwellings would be built by 2034.

The Victorian government expects construction to escalate towards the end of the decade, meaning future annual averages need to exceed 80,000 to make up for early shortfalls.

But the number of properties on which construction began last year continued a slow downward trend, while the number of properties approved in the year rose to 55,888.

Approved projects yet to begin construction, including those that may have been delayed by years, fell to 20,877. A high number would indicate an unhealthy sector unable to make progress on projects.

Allan has declared she wants to be the premier to get Millennials into homes, and to make Victoria the “townhouse capital” of Australia by fast-tracking the development of higher-density projects.

Industry groups and developers warn that tax relief is needed to achieve the level of construction the state government is aiming for, particularly following supply chain constraints sparked by global instability and a worker shortage.

The Property Council’s Victorian executive director Cath Evans on Wednesday said the bureau’s data reinforced the urgent need for tax relief to boost confidence in the sector.

“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,” Evans said in a statement.

The federal government also has the ambitious target of 1.2 million new homes in the decade nationwide.

Prime Minister Anthony Albanese and Opposition Leader Peter Dutton have both spruiked new housing policies on the campaign trail to address the affordability crisis, a key election issue.

The Housing Industry Association said the national total of about 168,000 new homes that began construction in 2024 was the lowest in the decade, and home building was losing skilled workers to other sectors.

The Master Builders Association said the number of apartments, in particular, being constructed had to lift nationwide to stop the deterioration of housing affordability.

“Australians are doing it tough. As the cost of living continues to climb, housing remains the single biggest pressure point for families across the country,” Master Builders chief executive Denita Wawn said.

“Fixing supply constraints, delivering more shovel-ready land, investing in enabling infrastructure and skills, reducing red tape, and supporting innovation across the industry – these are the levers we must pull if we want to meet demand.”

Victoria branch chief executive Michaela Lihou said Master Builders remained committed to supporting the annual average 80,000 target set by the state government.

“There needs to be greater consideration of the impact of property-related taxes on the feasibility of projects and the cost of new housing, especially in the context of delivering affordable housing.”

Lihou called on the state government to extend the 12-month stamp duty exemption on off-the-plan townhouses and apartments – and to expand this to all residential dwellings.

“We need to focus on the elimination of stamp duty tax in a long-term taxation plan to be replaced with a broad-based land tax.

“One of the other key issues in delivering more homes for deserving Victorians is our ongoing challenge with labour supply, so we’re calling for the government’s support for a range of initiatives to attract new talent, address the skills shortage, and maintain a steady flow of skilled labour.”

The Victorian Chamber of Commerce and Industry (VCCI) this week also called on the government to make Victoria the leading state for apprenticeships.

A government spokesman said Victoria leads the nation for home approvals, starts and completions and that the data showed improvements.

“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 10-year pipeline of land for family homes and backyards, and to slash stamp duty for off-the-plan apartments, units and townhouses.

“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.”

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