Allan government hopes of getting 80,000 new homes built a year have yet to occur, and the industyr fears an Albanese government tax fiddle will make it even harder.
Victoria has recorded its worst March housing completions in a decade after building just 54,842 new homes in the past 12 months.
The state is also on track to deliver even fewer new homes this year than last after a shaky start to 2026 in which 1443 fewer new homes commenced construction than at the start of 2025.
Alarmingly, the figures all predate federal government announcements of changes to negative gearing and capital gains tax in May, which the Albanese government has already admitted will reduce the number of new homes being built.
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It’s also expected the war in Iran and three consecutive interest rate hikes are yet to have influenced the data, suggesting even lower totals could be ahead.
Property Council Victoria analysis shows that the last time the state recorded fewer homes being built in the 12 months to March 31 was in 2016, when 54,585 were built.
The Allan government has set an ambitious target of building 80,000 new homes a year, but is seemingly getting further from the goal.
Executive director Cath Evans said with industry confidence in Victoria at its lowest level in years, the numbers highlighted concerns with high taxes and policy uncertainty.
“These flatlining numbers reflect that sentiment; we cannot solve the housing crisis without addressing the investment conditions holding us back,” she said.
“Housing supply and investor confidence go hand-in-hand. Unless we restore confidence, we’ll continue to see the housing pipeline underperform and affordability pressures worsen.”
There are fears a decline in home building ahead will lead to more lay offs, particularly for apprentices in the construction sector.
She called for the abolition of several punitive taxes to get construction moving again.
Master Builders Victoria public affairs chief Dr Corrie Williams said not only were the numbers a “real concern”, but so was their timing.
“This data largely predates the Iran conflict and the interest rate rise, so it’s likely we haven’t yet seen the full impact flow through,” Dr Williams said.
“If commencements and the value of work done keep falling, apprentices will be among the first to feel it, through reduced hours, delayed rotations, or businesses simply unable to keep taking on new starters.”
Separate ABS data released yesterday also showed the value of work completed declined by $340m from the March quarter last year to this year.
Dr Williams said that indicated builders were completing homes faster than new ones were coming in to start work on, which would leave the kind of gap that threatened the future of the state’s construction workforce as it could lead to apprentices losing their jobs.
The state is a long way behind its 80,000 new homes a year goal already, and looks set to drift even further from the target.
The changes to negative gearing and capital gains tax were leading to further hesitancy from people considering a purchase, and she said that was leading to delays in activity even before it became clear how the changes would impact building long term.
“What’s consistent across all we are hearing from industry at the moment is that it’s not one single factor driving the pressure, it’s the cumulative effect of several landing on the industry and on consumer confidence at the same time, all at a point when many builders have very little margin left to absorb further shocks.”
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