The rate of home building in Victoria has dropped to the lowest ebb for almost three decades, casting doubt on the state government’s ambitious plan to tackle housing affordability with an average of 80,000 new homes each year.
In fact, such a feat has never been achieved in Victoria. For the 2022-23 financial year, builders started work on 54,097 homes. That was above the long-term annual average of 46,140 homes a year since 1990, but well below the all-time high of 75,572, reached in 2017-18, before the state economy was derailed by the pandemic.
Australian Housing and Urban Research Institute managing director Dr Michael Fotheringham said it was a worthy ambition, although the bottom had fallen out of the home-building sector, which had been hit by rising interest rates, soaring costs, and shortages of labour and raw materials. He said the government had outlined its ambition and vision for housing, but it now needed to outline the funding required to deliver it.
To relieve “acute pressure”, the government has estimated Victoria will need a total of 2.24 million extra homes by 2051 – a projection that was used to derive the promise to build 80,000 homes a year.