The Victorian Government spent the last week releasing a host of major announcements aimed at addressing the pressing issue of #housingsupply and #affordability.
Here's my honest assessment of the pros✅, cons❌ and questionable elements❓ for each, together with a supply impact rating on a 1-5 scale (5 being highest):
1️⃣ Sunday: Activity Centres (3)
✅ Propose to deliver new structure plans in 50 areas capable of higher-density development supported by trams and trains (+10 previously identified). First 25 within 12 months. Streamline planning approvals in said activity centres with more deemed to comply development – save time, increased certainty
❌ Scale mid to high-rise development is not #feasible in the coming period – especially for #affordable homes. Product has moderate demand. Additional planning requirements, based on pilot activity centres, increase some requirements which offset savings in time and reduce feasibility. 4 years before any delivery
❓ Many of these are already activity centres in planning schemes. How is the current Activity Centre pilot being called a success if it isn't finalised? Planning approvals have not been the major barrier to supply – cost and demand have been. End product is too expensive for those being appealed to with this solution.
2️⃣ Monday: Stamp Duty (3)
✅ Reintroduces off the plan stamp duty concessions for units and townhouses for all buyers, with no price limit. Potentially increase off-the-plan sales for some projects and helps get them started
❌ Limited to 12 months. Penalises developers which progressed projects despite difficult times and have residual stock
❓ Doesn’t bridge the established vs new market price gap sufficiently to be highly effective at entry level – most likely continue the push on downsizer product.
3️⃣Tuesday: Developer Contributions (2)
✅ Finally spending $150m of GAIC money. Potentially simplify long list of development contributions by Jan 2027.
❌ “Fairer system for #developers to contribute to local infrastructure & services" = higher contributions (= higher prices). Statewide developer contributions for local infrastructure, parks and services will further reduce feasibility for apartments, and will now apply in areas which didn't have them
❓ GAIC money has been collected for years from developers and landowners and not been spent. This led to less investment in fast growing areas than warranted. "Streamlining" by increasing costs makes projects more expensive and less feasible, not more
🤔Follow for parts II & II and let me know your views on these announcements