Where will all the new land discovered in Melbourne be located?

Last week the Allan Government published a 10-year plan for Melbourne’s 27 remaining undeveloped PSPs, setting out a timetable for building 180,000 homes in suburbs such as Melton, Sunbury, Mumbourine, Wallan, Clyde and Cardinia.

But new land approvals in Victoria have stalled. The government last approved PSP almost three years ago, in March 2022.

The new 10-year plan also pushes back plans for new estates in Wallan by several years.

Planning experts say the government is deliberately holding back new growth, in part because it knows it cannot afford to build infrastructure such as train stations and schools at a pace that can keep pace with population growth.

Property analysts have also warned the government that slowing planning threatens to push up house prices in the last affordable parts of Melbourne.

Writing in Plan for Victoria, property services group Oliver Hume said a small number of land releases could push property prices up to levels comparable to sky-high prices in Sydney.

A lack of available greenfield land in Sydney has helped push average house prices in the city’s developing areas 77 per cent higher than in Melbourne.

“The average house price in outer Sydney is about $1.1 million, which is 77 per cent higher than the average house price in Melbourne’s growth area of ​​$672,000,” Oliver Hume said.

“Melbourne faces a significant risk of repeating the problems in Sydney’s housing market if it continues to restrict land supply.”

Andrew Butt, professor of sustainable development and urban planning at RMIT University, said the slowdown in the release of new housing land could be interpreted in two ways: as an attempt by the state government to meet its target of getting 70 per cent of housing in designated areas on track, and also as a recognition that that it has failed to build infrastructure at the pace required for developing regions.

“There is a deliberate strategy here,” said one planning insider, who asked not to be identified as they continue to be involved in planning new projects with the Victorian Planning Authority.

“I think investing in these communities is perceived as too expensive.”

Melbourne’s 10-year greenfield plan will also review existing areas to see whether housing can be built at higher densities. Butt said the issue would determine how quickly remaining undeveloped new land on the outskirts of Melbourne would be developed.

“If you want it to be delivered today, you have to build at standard densities without enough infrastructure. And if you want to build it at higher densities, you will do so in the future when you can build the appropriate infrastructure.”

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Oliver Hume chief executive Julian Coppini has criticized the Government’s inaction on planning new developments, arguing it is depriving homebuyers of choice.

“We need to build affordable homes that people want, not unaffordable apartments in the city center because the government doesn’t want to build the necessary infrastructure,” he said.

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