Victoria failing its housing target, property groups warn

There is also consternation behind the scenes that Trades Hall’s Luke Hilikari has been invited onto the government’s housing statement industry advisory group, along with the CEO of the Victorian Business Chamber Paul Guerra, the government’s go-to man for “consulting with business”.

“I reckon they invited me because of the number of workers needed to build 80,000 houses a year,” said Mr Hilikari, who came under the spotlight during Victoria’s hotel quarantine inquiry. Documents showed that work was to be directed to Trades Hall-preferred firms under an extension of the Working for Victoria program.

Property insiders also point to the fact Mr Guerra put his quotes – “this is a bold, yet pragmatic move” – to a press release by Treasurer Tim Pallas on Monday on the details for abolishing stamp duty on commercial properties, after property groups raised some concerns and baulked at the offer.

As The Australian Financial Review reported in June, the Victorian Chamber of Commerce and Industry’s 2022 annual report showed that federal and government grants contributed over half its revenue – $25.7 million of the $44.7 million raised while membership subscriptions added $4.7 million.

A spokesman for Ms Kilkenny said the advisory group drew on experts across industry, unions and the not-for-profit sector.

“In the little more than two months since releasing the Housing Statement we’ve received record levels of inquiries from industry for developments worth billions of dollars in investment,” the spokesman said.

The government said it would also streamline the planning process for residential developments where construction costs are worth at least $50 million in Melbourne and deliver at least 10 per cent of affordable housing.

Beyond the politics, most concern is that the ambitious housing targets are beyond reach and little has changed.

In one of his final acts as premier, Daniel Andrews released a major housing statement that set the goal of building 800,000 new homes – 80,000 a year, or 220 a day across the next 10 years – and 2.24 million new homes by 2051 – trumping Prime Minister Anthony Albanese’s own ambitious target of 1.2 million new homes in the next five years.

HIA chief economist Tim Reardon recently described the target as like John F. Kennedy’s famous 1961 goal to land a man on the moon before the end of the decade.

Housing Industry Association figures show the state has never built more than 67,589 houses and units in a single year, set during the building boom of 2017. Last year just 56,899 dwellings were built.

KPMG analysis shows that in September there were 4050 townhouses and flats that had been approved for construction that remained either stalled or permanently shelved.

HIA Victorian director Keith Ryan said the current industry and economic conditions would make the targets particularly tough to reach.

“It’s clearly extremely ambitious and well above historic levels,” Mr Ryan said.

“The government is focused on getting planning approvals through, but we are not yet seeing it come through. Then you need financing, materials and labour.

“On the other side of the equation, developers need to be satisfied there is enough demand. You can’t magically expect that lots and lots of apartments will make up for everything else.

“The building industry has been through a tough few years. But there’s not much coming through the pipeline now and our members are getting ready for a quieter 2024 and a tough year.

“We don’t have enough tradies, and we are seeing builders leave the industry and not coming back.”