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ResidentialLeon Della BoscaSun 02 Mar 25

Victoria’s Push to Meet Housing Targets Ramps Up

drone camera view of the Melbourne skyline from Clifton Hill

Just one Australian state can deliver its housing targets as part of the national target of 1.2 million homes over five years, economists say, and that state has now added two more policy initiatives.

“I would say Victoria is the only state with ability to get close to its target,” Oxford Economics lead economist Maree Kilroy said at last week’s Oxford Economics Housing and Construction Outlook 2025 summit.

“New South Wales is nowhere near as advanced. They’re really sort of walking into the run rate required, while other states are struggling to make any serious progress toward their portions of the national goal,” Kilroy said.

According to the Oxford Economics 2025 forecasts, most states are falling significantly behind their targets and, without extending the timeline beyond the original five years, the national 1.2 million target appears increasingly unattainable.

Victoria’s success in positioning itself to meet housing targets stems from a stream of strategic policy initiatives announced during the past six months.

The latest two are tipped to further strengthen the state’s robust development pipeline.

The most recent unveiled by the state is the integration of transport infrastructure with housing development through the Suburban Rail Loop (SRL) project.

This transit-oriented development push aims to deliver more than 70,000 homes near six new train stations, creating communities with access to transport, services and employment.

Premier Jacinta Allan said “building world-class public transport and building affordable homes around it just makes sense—this is the vision that the Suburban Rail Loop delivers”.

The Government has released draft structure plans that outline how neighbourhoods around the six SRL stations can develop, with provisions for open spaces, walking and cycling paths, and plans for schools and hospitals.

Aerial view of rail bridge construction works between McGregor Road and Main St Pakenham
▲ The draft strategy outlined what suburbs in the transport corridor would look like, the Government said.

The strategy drew nearly 10,000 online submissions during its community consultation phase.

“This benefits our whole city because building enough homes for young people near transport and jobs in established suburbs will take pressure off the outer suburbs,” Allan said.

The strategy favours a shift towards densification in established areas rather than continuing unchecked urban sprawl.

Complementing the SRL initiative, Victoria has implemented a systematic approach to greenfield development through its Precinct Structure Plan (PSP) process.

The state recently approved the Officer South PSP, which will support 22,000 new jobs and 1600 homes as part of the Officer-Pakenham State Significant Industrial Precinct.

Three further precincts—Melton East, Devon Meadows and Casey Fields South—are under consultation and could collectively deliver 16,500 new homes and 7370 jobs.

The PSPs also identify locations for schools, sporting facilities, and community infrastructure.

Planning minister Sonya Kilkenny said the state had “given the green light for more homes and jobs in Officer South, and we want Victorians to have their say on our plan to deliver thousands more homes in our growth areas”.

Parts of North East Link under construction in Melbourne
▲ The PSP strategy would drive new industries, manufacturing, and logistics, while also providing housing options for workers, the state said.

The 10-year greenfields plan aims to deliver 180,000 new homes over the next decade, providing what the Government describes as Victoria’s longest pipeline of new land for homes in its history.

This extended planning horizon is a bid to give developers greater certainty, encouraging earlier investment and faster construction commencements.

The Victorian government is also leveraging underutilised assets through its surplus land strategy and building conversion initiatives.

The former VicRoads Headquarters at Kew has been rezoned to allow ahout500 homes, including a minimum 10 per cent affordable housing component.

Under the plans, the building will be adaptively reused, converting the existing mid-century office building into and apartment block.

This approach is being replicated across the state—six more sites are to be unlocked, adding up to 350 homes.

Through its Small Sites program, the state plans to deliver around 9000 homes at 45 sites throughout Melbourne and regional Victoria by partnering with private developers experienced in apartment and townhouse construction.

The VicRoads building on the Denmark Street site in Kew in Melbourne.
▲ The VicRoads building on the Denmark Street site in Kew in Melbourne.

The announcements follow Victoria’s broader suite of planning reforms introduced over the past six months.

Among these are the fast-tracking of townhouses of up to three storeys through metropolitan councils, the establishment of activity centres to enable higher-density development around public transport hubs, and the Great Design Fast Track pathway for well-designed residential projects of three to six storeys.

The state has also targeted 10 key suburban activity centres, including Broadmeadows, Camberwell Junction and Ringwood, where building heights will double, and where approval times are expected to drop from up to five years to about 12 months.

Beyond metropolitan areas, the Government has committed $1 billion through its Regional Housing Fund to deliver 1300 social and affordable homes across rural and regional Victoria, while the Small Sites Program unlocks surplus government land in established suburbs for medium-density housing projects.

By integrating transport infrastructure, employment opportunities, and community services into housing development plans, the state hopes to create a framework that supports significant housing delivery—and position itself as the frontrunner in addressing Australia’s housing supply challenge.

InfrastructureAffordable & Social HousingBuild-to-RentVictoriaPolicy
AUTHOR
Leon Della Bosca
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Article originally posted at: https://theurbandeveloper.com/articles/victoria-melbourne-suburban-rail-housing-greenfields-precinct-structure-plan