UDIA Victoria Media Release
UDIA Victoria has called on the state government to take urgent action to restore investment confidence in the new housing market or risk sharp house price increases in the coming years.
The annual release of UDIA Victoria’s Residential Development Index, released on Wednesday, shows that overall total building approvals for houses have declined in Victoria by 21% in the last financial year alone.
“With Victoria’s population growth expected to continue at record levels in the coming years, we need to be delivering around 66,000 to 68,000 new houses every year,” said Danni Hunter, Victorian CEO of the Urban Development Institute of Australia (UDIA).
“The approval numbers and the construction pipeline flowing from approvals in the 2019 financial year reveals a complete drought of new housing which will hit the market in the next 18-24 months,” said Ms Hunter.
“Development activity generates jobs, and the sharp decline in dwelling approvals in the last financial year alone represents a loss of 34,000 jobs from the housing industry,” she said.
Economically, this decline in the housing pipeline and industry activity represents a negative impact to the Victorian economy, with expenditure on the construction of four storey plus buildings falling by 40%.
“The Victorian government recorded a $5.2 billion reduction in land tax and stamp duty at the last budget. It’s time they woke up to the looming housing supply drought which will only further reduce their ability to collect revenue from the property industry to fund infrastructure projects and services,” stated Ms Hunter.
“The Victorian Government must take urgent action to reduce red tape and improve policy and regulatory settings if they want to enable more investment certainty and increase the supply of new housing. If not, they will be putting Victorian jobs and housing affordability at major risk.”
UDIA Victoria has strongly advocated for the reduction of red tape in the development process to promote housing supply. As part of the review into the planning and building approval system, UDIA’s recent submission to the Commissioner for Better Regulation recommends that urgent action must be taken to simplify the planning system and make the development approval process more efficient and transparent.
About the Residential Development Index (RDI)
The RDI is a major research and data initiative that fills a critical gap in knowledge available to the Victorian housing sector, policy-makers and key regulators by using comprehensive research, data analysis, and a unique model to assess Victoria’s residential development industry and measure its activity on an ongoing basis.
The research examines the dynamics impacting the industry, including economic conditions, population growth, development activity, trend data, regulatory changes, policy implications and more. These industry activity fundamentals inform the RDI, which determines whether the industry is operating in a strong, moderate or weak market, relative to recent and long term history.
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Engagement and Communications Manager, UDIA Victoria
T: 03 9832 9600
M: 0478 415 105