Two years since Anthony Albanese’s government announced a plan for the nation’s housing crisis it’s still getting worse in Victoria. Picture: NewsWire / Martin Ollman.
Victoria’s housing shortage is still getting worse two years after the start of a National Housing Accord set up to fix the crisis.
Experts are warning the ongoing failure will leave young Victorians of the future grappling with a worsening affordability problem that will cost an increasing number their chance at the great Australian dream of a home to call their own.
New Master Builders analysis shows the state is expected to complete just 54,836 new homes for this financial year.
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It is below the 55,807 built in the prior year and the lowest number of completions since 2014-2015, when 54,817 were built.
Since the 2024 start of the National Housing Accord, under which Australia is seeking to build 1.2 million homes to remedy the country’s housing affordability crisis, the forecast suggests Victoria will have built 110,643 new residences.
It’s 6564 fewer residences than the 61,400 a year than the state’s population suggests it should be reaching under the Accord.
Worse, once the about 15,500 dwelling demolitions anticipated for the two financial years are factored in, the actual increase in the number of homes will be just 95,143, it’s also clear that the state is not keeping up with its rising population.
A Master Builders review of ABS data shows Victorian housing completions are going down.
ABS data shows the state’s population grew by 118,895 people to 7,074,500 people in the first year of the Accord, and the state budget has forecast a 1.7 per cent increase in the current financial year — which equates to another 120,657 people, and a two-year total of 239,162 more Victorians.
Based on the state’s average 2.5 people per home, we needed to build 95,665 homes just to keep up with the population growth.
Master Builders chief economist Shane Garrett said in addition to current housing completion levels falling below what was needed for population growth, in the years before the Accord the state had an even worse shortfall amid higher migration.
“So we have fallen even further behind where we need to be,” Mr Garrett said.
While the economist noted Victoria was one of the best placed states to hit building targets, and had proven in the past it could build more homes, he said every year the state missed its goals made it harder to catch up within the five-year timeline.
Building more homes is one of the few long-term solutions believed to be viable for Australia’s housing crisis — but efforts have not gone well so far.
“At the moment new home building isn’t strong enough to fully meet demand, and in a situation like that housing affordability will deteriorate further,” Mr Garrett said.
“It’s good if you own a home, but if you don’t your chances of doing so fall and get more difficult.”
Mr Garrett said key reasons why new home build numbers were below historic levels included
a total absence of interest rate hikes from 2010 to 2022, greater tollerance of foreign investors in the past, and building material costs not rising the way they have in recent years.
Master Builders Victoria chief of public affairs Dr Corrie Williams said the state would never meet its targets unless it could ensure faster planning approvals and a steady pipeline of new land for homes to be built on.
It also needed to enforce the statutory time frames being required of planning departments., she noted
“Victoria (also) urgently needs more skilled trades,” Dr Williams said.
“Without enough boots on the ground, we simply cannot deliver the housing supply required.”
There are also questions over whether we have enough trades people to get the job done.
She also indicated that while sensible when first introduced, the fixed-price contracts that dominate Victorian housing constriction were leaving builders to risk their business over unforeseeable issues.
“The government cannot control global events, but it can control the policy settings that make building a new home achievable for ordinary Australians,” Dr Williams said.
Villawood Properties boss Rory Costelloe said with sales volumes in new estates also struggling this year, the pipeline of homes in the years ahead would struggle to make up current shortfalls.
The developer warned that state and federal government attacks on property investors were combining in ways that would effectively mean in the future renters would increasingly be squeezed into apartments, if they were ever built, or out to the city’s fringes.
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