Our home choices: how more housing options can make better use of Victoria’s existing infrastructure looks at how existing demand for housing in new greenfield suburbs can be shifted to established suburbs, closer to existing infrastructure such as schools, hospitals and public transport.

The 18-month research project included 22 focus groups, analysis of more than 344,000 properties sold from January 2017 to June 2022 in greater Melbourne, and a survey of more than 6,000 people from Melbourne, Geelong and Ballarat – the largest of its kind in Australia.

One in five households said they would trade a detached home in a new suburb for a townhouse or apartment for the same price closer to city centres. These families and first home buyers want more housing choices closer to existing infrastructure and family and friends.

IV analysis shows there is a lack of suitable housing for moderate income households, especially families and first home buyers, in established suburbs. This is pushing people further away from jobs, schools and public transport, and locking them in to more travel time in the car.

Currently, it is only possible for a household with a stable income of $88,000 a year and a deposit saved to buy a three-bedroom house in a small number of growth suburbs some 30 kilometres or more from Melbourne’s city centre. Suitable options are already out of reach for a homebuyer with this income.

Policy options

The report offers 10 policy options for the Victorian Government to support more choice for moderate income households that prefer to live in established suburbs:

1. Reform infrastructure contributions to send the right price signals: Develop a clear, efficient and transparent infrastructure contribution system that better reflects the true cost of infrastructure in different development settings and supports better use of existing infrastructure.
2. Reform stamp duties that distort home choices: Remove the distortions created by stamp duty concessions and ultimately abolish stamp duties altogether, potentially by replacing them with a broad-based land tax.
3. Remove home subsidies that encourage greenfield choices without improving affordability: Avoid subsidies that inflate house prices and remove the First Home Owner Grant.
4. Use government ‘shared equity’ schemes to encourage established suburb home ownership: Over time, change the locations eligible for the Victorian Homebuyer Fund, to encourage people to buy homes in established suburbs.
5. Measure and incentivise progress towards new local housing targets: Set targets for the number, type and size of new homes in each Melbourne local government area, in collaboration with local governments. Offer local governments incentives to meet the targets. Measure progress by closely and publishing detailed statistics at least every year.
6. Prioritise and streamline approvals for urban renewal precincts: Prioritise urban renewal precincts for development, with streamlined planning approvals. Set targets in each precinct for the number, type and size of new homes. Develop suitable housing demonstration projects that specifically include 3-bedroom homes.
7. Develop better standards for low-rise apartments, then increase their supply by expanding use of the Residential Growth Zone: Develop better standards for low-rise apartments (4 or fewer storeys) in the Victoria Planning Provisions. Introduce more low-rise apartments by supporting local governments to rezone more residential areas near public transport and services to the Residential Growth Zone.
8. Develop a dual occupancy and townhouse code: Give property owners as-of-right permission to bypass red tape and supply more diverse homes when they comply with the new dual occupancy and townhouse code. Give better visual guidance for well-designed dual occupancies and townhouses.
9. Allow homebuyers more parking options: Reduce or remove compulsory minimum parking requirements to improve choice and affordability of new established area homes, close to good public transport. Allow homebuyers to choose how much onsite parking they want to pay for above minimum requirements.
10. Encourage child-friendly design in new apartments: Update the Better Apartments Design Standards to specify better access, versatility and safety features so apartments are more attractive for households with children. Introduce voluntary design guidelines for best practice child-friendly apartment design.

More information is available in the final report. Users can also register to attend a webinar on Tuesday 4 April.

Victorian Chamber advocacy

With access to affordable housing a growing issue in metropolitan and regional Victoria, the Victorian Chamber supports housing and tax reform ito help Victorians purchase a home in the areas they grew up, would like to live or in close proximity to their workplace.

In our 2023-24 State Budget Submission, we propose swapping stamp duty for a broad-based land tax system, based on research that removing stamp duty would lead to better use of existing housing stock.

Several further solutions that to lead to an increase in planning approvals and a higher level of infill development, while also providing affordable housing in Regional Victoria, include:

• Legislate a planning overlay on public transport corridors within two blocks from tram tracks and four blocks from train stations with automatic approvals for buildings that are six floors or less and meet all required standards.
• Provide a funding pool for councils that improve their planning approval processes.
• Provide funding and ministerial direction for the Victorian Planning Authority to provide support to regional councils.
• Adjust the thresholds of the Development Facilitation Taskforce so it can assess more applications, and work to combine improvements with greater release of land especially in Regional Victoria.

More information is available via the 2023-24 State Budget Submission.