Melbourne demolitions undermine housing affordability crisis fix

23 hours ago 3

Melbourne has emerged as the nation’s most demolished city in Australian Bureau of Statistics data. Picture: David Caird.

Government plans to build Melbourne out of a housing affordability crisis are being bulldozed as foreign interests have helped drive the city to become the nation’s most demolished.

Latest figures from the Australian Bureau of Statistics show Melbourne has cleared 4643 homes to be razed so far this financial year, meaning that for every seven new homes given the nod for construction we’ve had one tagged for destruction.

Nationwide, with almost 15,000 homes slated for demolition in the same timeline, housing industry experts have warned Albanese government plans to build 1.2 million homes could translate to a real outcome closer to 800,000 — not enough to improve housing affordability.

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In Melbourne there is a separate issue for Allan government hopes of increasing housing in some of the city’s most desirable pockets, with the stats showing barely any increase once demolition permits are deducted from approvals.

The ABS data is broken down to Statistical Area Level 2 locations (SA2s), similar to suburbs, and generally home to about 10,000 people.

The top spot in the country for demolitions was Balwyn North, with 88 permits issued.

Incredibly, with just 96 homes approved in the same area, the net increase in housing is expected to be just eight.

On Spot Demolition owner and director Mohamad Mahmoud is seeing high demand from Chinese, Indian and Sri Lankan heritage families wanting to bulldoze Melbourne homes and replace them with larger, often multi-generational residences. Picture: David Caird.

In nearby Wheelers Hill, the 50 homes slated for the wrecking ball actually outpaced the 47 approvals in the same timeline.

It is possible the net figures will change as future building approvals are issued, but Housing Industry Association Victorian executive director Keith Ryan said the demolition stats in some of Melbourne’s most desirable neighbourhoods were a wake-up call to the state government.

Mr Ryan said they showed the public really wanted bigger houses, medium-density townhouses and maybe a few smaller multi-unit builds.

“This is just reflective of the way the real world works and not the way the government wants,” Mr Ryan said.

“They need to go more medium-density than higher density.”

95 Mountain View Rd, Balwyn North - for herald sun real estate

A brand new, five-bedroom Balwyn North home on the market for $4.2m-$4.39m.

14 Howell Drive, Mount Waverley - for herald sun real estate

A brand-new, five-bedroom Mt Waverley home on the market for $3m-$3.1m.

Demolition crews and local real estate agencies have noted significant demand from families with continental Asian heritage driving the demolitions, adding cultural and multi-generational living desires to the mix shaping new housing in some of the city’s most in-demand suburbs.

Ray White Judd White director Dexter Prack said across Glen Waverley, Mt Waverley and Wheelers Hill, about 60 per cent of the demolished residences were being replaced with a single, grand, often French Provincial-stylehome that could be upwards of 60 squares (557sq m) inside.

“And they’re selling to families with kids, and they are very conscious of the school zones,” Mr Prack said.

“There’s a few that are FIRB, though not many, but a lot of the mums and dads that have bought have someone living in China still.”

On Spot Demolitions director Mohamad Mahmoud said most of their work was for knockdown rebuilds, and one-for-one replacements.

Mr Mahmoud takes a coffee break before starting work demolishing a Mt Waverley home. Picture: David Caird.

The demolition work that followed made short work of the classic, brick house that had stood at the address for decades. Picture: David Caird.

“We don’t see many developers or investors these days, we used to — but not any more,” Mr Mahmoud said.

“It’s mostly Chinese background … and also a lot of Indian and Sri Lankan families who are looking at multi-generational homes.”

Since the National Housing Accord began in July, 2024, demolitions across Australia have topped 34,000 around the country.

Approvals for construction in the same timeline are around 271,000.

The 1.2 million homes target was intended to deliver enough homes to slow the rate of home price growth by accommodating rising population and demand for homes.

Housing Industry Association economist Maurice Tapang said with housing approvals already struggling to match government expectations, they were expecting barely a million homes to be built in the Accord’s timeline — with demolitions to cut that number even further.

“In net terms, we think it will be closer to 800,000,” Mr Tapang said.

“And that definitely isn’t enough to meet growing demand.”

19 Lucifer St, Balwyn North - for herald sun real estate

Many homes demolished in Melbourne’s most demolished suburb, Balwyn North, are being replaced by a single large residence like this $3.68m-$4.93m home at 19 Lucifer St.

HIA economist Maurice Tapang said demolitions meant the nation would build close to 400,000 fewer homes in net terms than the government’s 1.2 million target.

Pointing to migration figures of about 250,000 a year, the economist said the nation needed to build 100,000 homes annually just to cover international population increases — and another six figures to address the historic undersupply of new home building.

“With an underlying shortage, that’s nowhere near where you need it to be to get affordability where you want it to be,” Mr Tapang said.

MELBOURNE’S MOST DEMOLISHED SUBURBS — ABS

SA2 Region	Demolition approvals	New dwelling approvals	Net change to homes
Balwyn North	88	96	8
Mt Waverley – North	81	100	19
Mt Waverley – West	78	163	85
Mt Waverley – East	75	80	5
Box Hill North	70	90	20
Doncaster	64	128	64
Mt Waverley – South	60	101	41
Altona North	58	144	86
Blackburn	57	95	38
Oakleigh – Huntingdale	55	247	192
Heidelberg West	54	589	535
Point Nepean	54	100	46
Doncaster East – South	53	82	29
Keilor East	53	77	24
Camberwell	52	65	13
Bentleigh East – North	52	158	106
Wheelers Hill	50	47	-3
Brighton	49	67	18
Bentleigh East – South	47	47	0
Balwyn	46	92	46