New research from the Grattan Institute has found of the 600,000 homes planned in activity centres, only around 18 per cent, or 110,000 are economically feasible to build.
Under Labor, Victoria has the highest property tax burden in the nation, with escalating land tax, stamp duty and developer charges are discouraging investment and pushing builder's interstate.
Following a decade of financial mismanagement, Victoria's net debt is climbing by $1.7 million an hour and is expected to reach a record $192.6 billion by 2028-29.
Shadow Minister for Planning, David Southwick, said: "Labor's activity centre plan fails to address the underlying cost pressures that are choking supply.
"If five out of six proposed homes will not be built because the costs are too high, it's clear Labor's latest housing plan is destined to fail.
"Fewer homes means higher prices, higher rents and less housing choice. Labor's mismanagement is denying Victorians the best opportunity to find an affordable and secure place to call home.
"We need a balanced plan that makes projects stack up, delivers infrastructure and supports communities. Forcing higher density into established suburbs without addressing viability will not solve the housing crisis."
