The data also shows building commencements in Victoria fell again over the quarter, down from 14,105 in June 2025 to 13,415 in September, while commencements increased in New South Wales, Queensland and South Australia.
Property Council Victorian Deputy Executive Director Andrew Lowcock said these figures highlight a concerning handbrake on the industry.
"Victoria has traditionally been ahead of the rest when it comes to building new homes, but today's numbers show that we are at serious risk of falling behind," Mr Lowcock said.
"A growing and complex web of property taxes, from increased land tax to the windfall gains tax and nation's worst global investor taxes, are scaring away investment and delaying the delivery of new housing projects.
"The Property Council has been warning for years that these settings would drive future investment away and stall projects, and the data now makes that reality impossible to ignore.
"Victoria has the fastest-growing population in the country, but we're building homes at 2014 levels. That mismatch is unsustainable.
"If the next state government is serious about meeting our housing targets, urgent tax relief must be central to the 2026 Victorian election conversation."
