Catch up time on housing backlog

The pressure is on in Victoria: targets have been set on future housing supply, but it is really catch-up time for the relative authorities who were caught off guard since the federal government announced their target of 1.2 million homes by mid 2029.

This is not only a dilemma for state and local governments who have spent years creating policies to deter development in some growth areas. The building and construction industry also has doubts that there are enough boots on the ground to undertake the work.

The Victorian government has just announced a clear target to deliver more homes in the Geelong region over the next 30 years, revealing that they have met with every Victorian council to understand their plans and the barriers they face in unlocking the capacity, ensuring the final targets are accurate, fair and achievable.

The government’s number crunches disclose that Victoria requires 2.24 million new homes by 2051 to preserve the dream of homeownership for young people and workers, and to make sure there’s enough rentals for those who need them.

These targets mean a quarter of homes will be in regional Victoria, including 128,600 in Greater Geelong, 46,900 in Ballarat and 37,000 in Bendigo.

The government has offered a carrot to regional and rural councils offering funding for planners and resources to meet these targets, but it also comes with a warning: “step up or step out”.

Councils will be held accountable for meeting their targets and work collaboratively to unlock this capacity in a way that is right for the broader community, and if they fail to do so, the government will intervene and unlock space for more homes, including through rezoning using the Minister for Planning powers to intervene or fast-track developments.

Minister for Planning Sonya Kilkenny said her government wanted to make sure today’s children have access to the same opportunities as their parents.

This all looks good on paper, but even if relevant authorities manage to rein in the red tape, there are industry concerns about the workforce capacity to do the job.

According to the ABS at the end of last year, private sector job vacancies were 308,000, an increase of 4.7 per cent from August 2024.

On top of this, a recent Housing Industry Association (HIA) report highlights that Australia needs an additional 83,000 workers in key residential construction trades, a 30 per cent boost on current employment levels, to meet the Australian government’s Housing Accord target of 1.2 million new homes over five years.

HIA senior economist Tom Devitt said HIA’s Pre-Budget Submission outlined several critical reforms needed to address the chronic and long-term skills shortages.

“Key amongst this was to provide apprentice and employer subsidies, targeted funding towards trade ready and pre-apprenticeship training and a comprehensive awareness program to encourage young people to take on a trade.

“The other key tool is to develop a streamlined and simplified visa program for in-demand trades and the development of a specific construction trade contractor visa tailored to suit the way work is arranged on building sites.”