The panel discussion, moderated by Gia Cari, partner in ABL’s renowned Property and Development team, included: Deputy Premier of Victoria and Minister for Transport and Infrastructure, the Hon Jacinta Allan MP; General Manager, Build to Rent at Mirvac, Angela Buckley; and Chief Operating Office of MAB Corporation, David Hall.
The panellists engaged in thought-provoking conversation as they tackled key topics pervading Victoria’s property development industry including planning policies, housing supply and the emerging Build to Rent market. Victoria’s rapid population growth, and its current housing affordability and rental crisis were also focus points throughout the discussion.
The key points discussed are detailed below:
Investment in Infrastructure
- The Victorian Government is focused on increasing infrastructure to match Victoria’s growth, but also on maximising the existing structures available.
- The Victorian Government’s commitment to infrastructure extends to both regional and metropolitan areas of Victoria.
- Transport infrastructure is a particular focus, with the Suburban Rail Loop project set to revolutionise Victoria’s transport system and create great employment opportunities in and around the new transport hubs in Melbourne.
- The Victorian Government’s May 2023 Budget will need to balance multiple, often competing, interests and this means that the Victorian Government will need to make difficult decisions about projects which are not fully funded.
Development and Planning policies
- Higher interest rates, limited urban land availability, increased material and building costs and inflationary pressures are impeding the development industry in Victoria.
- There is a need in Victoria for clearer and more consistent government policy which provides a clear pathway for the approval and completion of strategic projects.
- Recalibration of the Plan Melbourne policy is underway by the Government to provide solutions to Victoria’s housing supply issues, including considering whether there needs to be a change to the role of local councils in implementing decisions which affect housing supply.
- Positive investment in renewal precincts such as Arden by the Government provides encouraging opportunities for private landowners and developers to invest in strategic precincts in Victoria.
- Plan Melbourne sets out a 70/30 split for population growth between established suburbs and growth areas. However, just 56 per cent of new dwellings have been delivered in established areas since 2014.
Build to Rent
- Victoria’s continued growth, compounded with the rental crisis and lack of housing affordability has led to the rise in the Build to Rent market.
- There has been more investment in Build to Rent in Melbourne than any other Australian city, earning Melbourne the unofficial title of the Built to Rent Capital of Australia.
- The Build to Rent sector and its potential to create hundreds of thousands of homes over the next decade is as close to a housing supply silver bullet as Victoria has seen.
- Build to Rent is vital to address the states growing population.
Labour Shortages in Construction
- The COVID-19 pandemic has reduced the younger pipeline of labour supply available in the property development industry as internationals have been unable to enter Victoria.
- The private construction sector has been particularly inhibited by labour shortages. The “Big Build” projects have exhausted skilled labour in the Victorian construction industry and many in the private sector are feeling the impact of the shortage of skilled labour on pricing and project delivery.
- Increasing the attractiveness of Victoria as a place to live and work in order to encourage greater skilled migration is critical to the viability of the construction industry.
- There are concerns that holding the Commonwealth Games away from Melbourne will reduce the positive economic impact that the Commonwealth Games may potentially have on Victoria as a whole.
- The Government believes that the activity and energy from the Commonwealth Games will spread throughout Victoria and stimulate the economy and create an opportunity to invest in regional communities – Geelong, Bendigo, Ballarat, Gippsland and Shepparton – all earmarked for substantial investment to support the Games.
- Holding the Commonwealth Games in regional Victoria has overcome the barriers for development in these areas as construction of the necessary athlete villages will create permanent houses for residents once the Commonwealth Games have concluded.
Deputy Premier announces push for additional housing at ABL Annual Property Forum
Australian Financial Review, 1 May 2023
As reported in the AFR, Deputy Premier Jacinta Allan said the Victorian Government would be taking a more interventionist approach to ensure an additional one million homes within established suburbs by 2050.