Victoria recorded a slight decline last year in achieving the traditional dream of owning a home with a backyard, as approvals for new house construction fell by around 1,000 units compared with 2024.
Although total approvals for new dwellings increased from 53,604 to 54,250 units, according to data from the Australian Bureau of Statistics, this rise was driven by an increase of about 1,300 approvals for apartments and residential units.
This decline in house construction remains well below 2018 levels and is insufficient to meet the housing supply targets set by both state governments and the federal government. The Allan government is aiming to build 80,000 homes annually in Victoria, while the Albanese government has set a national target of 240,000 homes per year—goals that current figures do not support.
Forecasts from relevant authorities suggest that achieving these targets within the specified timeframe will be challenging. However, a 50% drop in legal appeals against apartment projects at the Victorian Civil and Administrative Tribunal since last May may indicate potential improvement.
Jonathan O’Brien believes the current data could reflect the success of efforts to make it easier to build more houses and apartments in suburban areas. He emphasized that increasing housing construction in desirable living areas is a positive step, even if it is only the beginning, describing the progress as a “fundamental shift.”
Mary Kilroy of Oxford Economics pointed to relative stability in new approvals, noting that government efforts to promote apartment developments are beginning to pay off.
She expects further increases as land sales and inquiries rise, and highlighted the role of government policies in supporting apartment projects—particularly in New South Wales and Victoria—reflecting changes aimed at increasing density and boosting housing supply.
