I've seen several posts on the National Housing Supply & Affordability Council's State of the Housing System 2025 report. It includes a table which shows the proportion of the National #housingaccord target each State is forecast to achieve, and that Victoria is allegedly on-target to hit 98% of a 306k target (300k).
One needs to understand the way the #accord targets were formulated. They are based on the proportion of the Australian population in each State as at December 2022, and are not linked to need, or expected population growth.
As a result, VIC looks better than it should because it was allocated the second-highest growth target, even though it has higher forecast population growth than NSW.
📈How much? According to the Centre for Population, VIC is predicted to grow by 1.216m people to 2034-25 compared to 1.118m in NSW. Yet NSW was given a target of 376k.
It's the same reason VIC looks strong on overall housing approvals and commencements, but drops to fourth place when adjusted for growth.
(The same applies to many economic growth measures which are bolstered by high population growth but going backwards on an adjusted basis. The Victorian Government loves to talk in gross terms to avoid this problem).
🏘️Secondly, Victoria is not on target to build 300k dwellings over the #housingaccord period. How do I know this? Commencements data.
Commencements tell you how many homes will be completed in future. As a rough rule of thumb, commencements today translate into completions in around 2 years.
So how do VIC commencements look? Check out my chart of Australian Bureau of Statistics data (quarterly, not annual).
In the period Jul 2017 to Jun 2022 (the relevant period for completions in FY19 to FY24), commencements averaged just over 16,000 per quarter. This got to the 306k total.
Since July 2022, we've averaged just 13,200 per quarter – already a 28,000 shortfall in 10 quarters.
If VIC managed 306k in the FY19-FY24 period, and is already 28k behind in the Housing Accord, there's no way it will hit 300k total completions by FY29. In fact, VIC will likely continue to go backwards in completions, so we are probably looking at a 30k+ total shortfall over the Accord period assuming things start to improve from here.
🤔That would put it on track to hit around 90% of the Housing Accord target – still better than the other states in gross figures, but well below underlying need given VIC's target should be HIGHER than NSW! It's also sitting around 68% of the VIC Governments own #housingstatement target of 80,000 per year.
!?️Do you agree with my analysis?