New home buyers in Victoria want to live in established areas, but a lack of suitable options is making that impossible, according to new research.
A report from Infrastructure Victoria, Our home choices: how more housing options can make better use of Victoria’s existing infrastructure, found that one-in-five households would be prepared to swap a detached home in a new suburb for a townhouse in a suburb closer to the city.
The report said families and first-home buyers want more housing choices closer to existing infrastructure, family and friends, including three and four-bedroom homes, however, there is a lack of suitable housing for moderate-income households in established areas.
Infrastructure Victoria Chief Executive Officer Dr Jonathan Spear said the lack of housing choices for new buyers was limiting people’s options and leading to a range of issues.
“Households on moderate incomes, many of which are families and first-home buyers, are being locked out of Melbourne’s middle suburbs, pushing them further away from jobs, schools and public transport and locking them into more travel time in the car,” Dr Spear said.
“We know many people are doing it tough.
“To make buying a home possible and fairer for many more families and first-home buyers, we must provide more affordable, high-quality home choices in more locations.”
The Victorian Government is currently aiming for 70 per cent of new homes to be built in established areas, however, in 2021, fewer than half (44 per cent) of Melbourne’s new homes were built in established suburbs – down from 60 per cent in 2012.
According to the report, moderate-income households earning between $88,000 and $132,000 are priced out of many inner and middle suburbs of Melbourne.
The report surveyed over 6000 people from Melbourne, Geelong and Ballarat about the type of home they would choose if they had to move today.
Dr Spear said there was a significant need for more housing options, including more three and four-bedroom homes in established areas.
He said this is something government intervention and improved planning could change.
“Providing housing and infrastructure to Victoria’s growing population is a significant challenge, but the government does have opportunities to influence where homes are built, and which suburbs people choose to call home,” he said.
“This will help make the most of the good infrastructure we already have and ease the task of delivering new infrastructure in growth suburbs which are already struggling to keep up with demand.”
According to the report, Melbourne is going to need nearly one million new homes to be built in established areas by 2051 – the equivalent of eight times the number of homes in Geelong today.
Dr Spear said many areas in established parts of Melbourne and regional cities, such as Geelong and Ballarat, can accommodate more homes.
“Building more high quality, medium density housing in established suburbs will mean more home choices close to jobs, services and existing infrastructure, at a price more people can afford,” he said.
The report proposes a range of measures to help bridge the gap and encourage more housing options, including removing the distortions created by stamp duty concessions and ultimately abolishing stamp duties altogether, potentially by replacing them with a broad-based land tax.
It also suggests, removing home subsidies that encourage greenfield choices without improving affordability
The report said subsidies, like the first-home owners grant simply inflate house prices and lead to values becoming unaffordable for new buyers.
Other suggestions include using government shared equity schemes to encourage established suburb home ownership as well as setting targets and incentives for the number, type and size of new homes to be built in each Melbourne local government area.
The report also looked at options like prioritising and streamlining approvals for urban renewal precincts and introducing more low-rise apartments by supporting local governments to rezone more residential areas near public transport and services to the Residential Growth Zone.
Finally, developing a dual occupancy and townhouse code, allowing homebuyers more parking options and encouraging child-friendly design in new apartments, could all help encourage more housing choices for buyers.
“Our package of reforms will encourage more diversity of housing across greater Melbourne and our regional centres, especially more three to four-bedroom townhouses, units and apartments,” Dr Spear said.
“These options will give many more Victorians more housing choices and the chance to live closer to jobs and existing infrastructure.”
