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Victoria is bracing for higher rents and home prices after new figures revealed a sharp drop in building approvals.
Dwelling approvals across the state fell 6.1 per cent in June, according to new data cited by the Property Council of Australia.
It makes Victoria one of just two states to record a decline alongside Western Australia.
The figures paint a bleak picture for housing affordability, with the Property Council warning the state is still dramatically underperforming against its housing targets.
Just under 57,000 new homes were approved in the 2024–25 financial year, below the government’s 80,000-home annual goal.
“This is not just an industry problem – it’s a community problem,” said Property Council Victorian executive director Cath Evans. “Every delay drives up costs for buyers and renters and pushes the dream of home ownership further out of reach.”
While there was a modest 1.4 per cent increase in private sector house approvals over June, Evans said the overall numbers “barely scratch the surface” of the state’s housing shortfall.
“Victoria remains well short of the state government’s annual target of 80,000 new homes. We won’t get there without reducing dumb property taxes and bolder action to speed up planning and improve the performance of referral authorities.”
It comes just weeks after the property sector in Victoria once again recorded the lowest confidence level across the country.
The latest Property Council and Procore Industry Sentiment Survey showed that the state’s confidence index decreased by 4 points since March, now standing at 104, which is 20 points behind the national average of 124.
The survey included 581 respondents, most of whom slammed the state’s property taxes as the most critical issue to dampen sentiment.
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