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{{propApi.successMessage}} {{region}} Change locationVictorian housing lags the smaller states
Victorian housing lags the smaller states
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HIA’s Housing Scorecard benchmarks contemporary levels of activity in each state and territory against long term averages across indicators of home building and renovations activity, lending data and population flows.
“Five years ago, Victoria was at the top of the Scorecard, following booms in both detached and multi-unit activity and strong population growth from both overseas and interstate,” added Mr Ryan.
“Since then, Victoria lost its appeal to interstate arrivals, with many residents leaving for states like Queensland, Western Australia and South Australia.
“In contrast, the success of South Australia shows the value of having a strong, vibrant state government able to make clear decisions that support the housing sector and wider state economy.
“The South Australian Government’s Housing Roadmap includes bold new planning reforms, streamlined development approvals, skills investment and a strong focus from policymakers on land release. It goes far beyond what is being attempted in Victoria.
“In Victoria, State Government policies have compounded the problem. A failure to provide sufficient shovel-ready land has seen land costs soar. Punitive taxes and obstructionist regulations on builders and on development have deterred investment in home building.
“Investors have been much slower to return to Victoria compared to other markets. The result is that commencements of detached houses and multi-units have tumbled, sitting around decade lows.
“Victoria is set to fall a long way short of its housing targets, with forecasts of barely more than 60,000 new home commencements per year over the next five years.
“Victoria’s share of the national 1.2 million homes target would imply the construction of around 75,000 new homes per year. The Victorian government have been even more ambitious, setting a goal of 80,000 new home builds per year.
“A few interest rate cuts from the RBA will not be sufficient to meet these targets.
“The outlook for home building in Victoria is going to depend on the ability of state policymakers to bring affordable shovel-ready land to market and reduce costs and regulations on home buyers, investors and builders.
“Failure to address the structural issues around land costs, tax, investment and the regulatory burden, means Victoria will continue to struggle beyond the short term to address the affordability challenges and housing shortages currently prevalent across the state,” concluded Mr Ryan.
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