The Victorian government has released its final housing capacity targets for every council. While some suburbs have seen their targets reduced, others are marked as key growth areas.
The finalised housing targets are intended to guide local councils on where and how many future homes should be built, to ensure the state meets its additional 2.24 million new homes by 2051. This follows the draft targets initially announced in June 2024.
Under the plan, the government aims to shift focus by delivering 70% of Melbourne’s growth in established areas and just 30% in outer-city suburbs, with the government noting this is “reversing” the current trend.
For example, the government slashed numbers among council areas including Hobsons Bay, Hume, Manningham and Mornington Peninsula.
Altogether, the targets for these areas have dropped by 45,000 future homes.
The outer north Melbourne suburb of Nillumbik saw the biggest drop, with a target that went from a proposed 12,000 homes by 2051 to 6,500.
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The plan aims focus 70% of Melbourne’s growth in established areas and 30% in outer suburbs. Picture: Getty
The government also anticipates 25% of the new homes are targeted for regional Victoria to support a balanced statewide growth, including 128,600 in Greater Geelong, 46,900 in Ballarat and 37,000 in Bendigo.
“Our regional councils are already doing great work to deliver more housing, and we’ll continue to work with them to make sure they have the support they need to get more homes off the ground,” premier Jacinta Allen said.
Property Council Victorian executive director Cath Evans said she welcomed the updated targets but noted more needs to be done to address project feasibility.
“It is critical for the government to provide the industry with much-needed tax relief in its May budget to attract the investment we need to deliver to the revised housing targets,” Ms Evans said.
“We support the ambitious housing targets outlined today, however, without targeted relief to address the fundamental structural issues facing the property sector, it is impossible to see how these targets can be delivered.”
Holding councils accountable
As part of the new plan, the Victorian government said councils would need to demonstrate how these targets will be met, or they could risk losing control of planning powers.
“It’s simple – work with us to unlock space for more homes or we’ll do it for you,” Ms Allen said.
“It’s not fair that Victorian families and young people have been completely locked out of living in some areas, while other parts of Melbourne have had to bear the brunt of all that growth.
“We’re in a housing crisis and the status quo is not an option. It’s time to shake things up.”
The government plans for 25% of new homes in regional Victoria. Picture: Getty
Under the plan, if councils are not providing enough housing capacity, the government will have the power to change or update planning schemes.
“There are many councils who have done the right thing and made life better and more affordable for locals,” minister for planning Sonya Kilkenny said.
“To the councils who used to block and who are now ready to build, I say to them: let’s talk.”
New ‘automatic’ approvals for townhouses
Following the revised housing targets, the government announced a new townhouse code to allow for quicker approvals of new homes up to three storeys high.
The ‘Townhouse and Low-Rise Code’ aims to streamline the planning process, minimising costly delays and bypassing red tape.
The townhouse code seeks to streamline planning, reduce costly delays, and bypass red tape. Picture: realestate.com.au
According to the government, the average assessment time for a planning permit is 145 days, which it deems unnecessary for these projects.
New standards include enough setback and tree coverage – so a building fits within a neighbourhood – well-sized bedrooms, and sunlight.
Applications meeting the code will be “deemed to comply,”’ eliminating further assessment. Affected neighbours will be notified and may comment, but there will be no third-party VCAT appeals. If the code is not met, normal planning processes apply, maintaining appeal rights.
The government is also currently developing a code for buildings between four and six storeys, though details are yet to be announced.
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