“While an increase in the supply of higher and medium density housing will play an important role in making housing more affordable and accommodating higher numbers of people as Victoria’s population grows, it is not the only solution.

“Good housing policy ensures homebuyers of all ages and backgrounds have choice in the diversity of housing options, whether that’s an apartment, semi-detached or detached dwelling in an established or new suburb. 

“The facts are that the majority of Victorians prefer to live in low to medium rise housing (i.e., 4 or fewer stories). The 2021 Census showed only 12 per cent of the population live in an apartment. Similarly, in the five years to 2022/23, less than 20 per cent of new homes built nationally have been above 4 storeys. 

“This tells us that low rise buildings are also likely to continue to play a major role in meeting Victoria’s housing challenge.

“This is why we need a planning system that enables all forms of housing to be delivered with more certainty about outcomes.  The system needs to be streamlined and without excessive fees, taxes and charges.

“HIA has long acknowledged the need for more public, social and affordable housing, but warned against extending the Victorian planning framework to allow councils to make it compulsory for developers to provide affordable housing, however defined, as an inclusionary requirement,” said Mr Ryan.

“Inclusionary zoning programs make some local councils and social interest groups believe they are supporting low-income families and promoting social inclusion. 

“However, in a high-cost housing market unless such schemes provide powerful incentives to offset the loss a developer would incur on an inclusionary zoning home sold below market rates, there is a strong likelihood they simply won’t be built.

“Mandating inclusionary zoning will have equally adverse effects with developers likely to raise the price of market-rate dwellings in the same development to compensate for the loss. This exacerbates the affordability crisis and only adds additional pressure to house prices.

“There is no single panacea for Victoria’s housing crisis but a whole of government approach to addressing supply and demand challenges has the best chance of success,” concluded Mr Ryan.

HIA’s recently released Action Plan: More Houses for More Victorians, outlines six priority areas where reform is needed most:

1. Planning - expediting new projects that provide more affordable, well built and designed housing options that meet the needs of all Victorians.
2. Land Supply - getting more land brought to market and “shovel ready” sooner. 
3. Property Taxes – lowering property taxes to improve affordability of housing, connecting people with better social and employment outcomes.
4. Domestic Building Contracts – steps can be taken now to improve confidence and certainty for builders and homeowners but work also needs to be undertaken to improve the quality of home building contract regulations generally.
5. Building Standards – helping industry prepare and consumers understand major impending changes to the design and construction of homes is vital for occupant comfort and energy efficiency.
6. Skills and Training – ensuring the residential construction industry has the people and skills needed to meet Victoria’s housing needs, now and into the future.

Read HIA's Action Plan

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