No (and it's no surprise).
Daniella White at The Age dives into a point I made a few weeks ago – that for all the talk, #apartments being approved by the DFP are mostly for high-end buyers.
💰This is entirely expected, given the cost of development means only higher-end units are #feasible. And developers will rationally pay the 3% fee as those high-end buyers can absorb it.
New apartments in Victoria (and around Australia) are bifurcated into two camps: 1. High-end owner-occupier (mostly downsizer) units in premium areas 2. Social/affordable housing subsidised by the Australian Government (HAFF)
My comments in the article: (https://lnkd.in/gi247xnc)
—— But according to property developer Maxwell Shifman, a former president of the UDIA National, the affordability criteria perversely incentivised high-end projects because their larger profit margins could more easily absorb the 3 per cent levy or the cost of including affordable homes.
He argued the program was sidelining the “missing middle” of housing supply.
“The Melbourne apartment market is being dominated by either high-end, owner-occupier projects or developments subsidised by social housing,” Shifman said. “There is no mid-market for apartments at the moment.”
Shifman said adding costs such as the affordable housing levy was “another barrier from a feasibility perspective” to getting projects off the ground, and would likely result in less overall housing supply, not more.
Shifman said the DFP should be expanded to remove affordability criteria altogether and instead prioritise approvals for large-scale projects that deliver more homes.
As above, "normal" new apartments do not exist 🦄.CBRE predicts just 9,000 apartments p.a. for the next 5 years in Melbourne, including #buildtorent – a far cry from what is required and nowhere near Victorian Government #housingtargets.
(Before you jump in to suggest developers should be forced to build affordable units, most projects do not suit a "mix" of types. If this is foisted upon developers, it will further reduce the desirability of apartments and reduce overall supply.)
I'm a big supporter of the DFP, but it is massively underutilised. Just 5000 dwellings approved over 2 years!
DFP should expand to fast-track all #feasible developments of scale without the "quid pro quo" of extra contributions, which reduce feasibility.
🤔In a #housingcrisis, delivering more homes of any type should be enough of itself.
#housingsupply #familysizedapartments #economics #housingstatement Property Council of Australia UDIA Victoria Housing Industry Association (HIA) Department of Transport and Planning