Victoria last peak housing output was in 2017, delivering 67,583 dwellings – well below current targets, an almost 20 per cent drop.
In the December '25 quarter, Victoria commenced 13,489 dwellings, flatlining from the 13,552 dwellings commenced in the September '25 quarter. In comparison, New South Wales soared ahead with 16,272 dwellings commenced, up 28.5 per cent from the previous quarter.
While commencements in Victoria did increase across the whole of 2025, the pace of delivery continues to fall short of what's needed to meet population growth and housing demand.
Property Council Victorian Executive Director Cath Evans said this new data reinforces a broader structural issue - that Victoria's housing system is not equipped to deliver homes efficiently.
"Right now, the system is too slow, too complex and too costly. We need to deliver more homes more quickly and efficiently.
"If we want to close the housing gap, we need to lift productivity across the entire development pipeline, from planning approvals through to construction.
"A crucial step in supporting housing delivery is the removal of harsh taxes that are holding back Victoria's property sector.
"As part of our election platform, Best to Invest: the reform agenda Victoria needs now, the Property Council is calling for significant tax reform with a particular near-term focus on removing the Absentee Owner Surcharge and Windfall Gains Tax.
"These are two taxes that are deterring international investors from choosing Victoria for urgently needed housing and infrastructure projects.
"We have also called for the next government to appoint a Housing Commissioner to oversee the sector, identify bottlenecks and reduce red tape. The role would work closely with Treasury and key government agencies to ensure tax, planning and infrastructure policies are aligned to support housing delivery
"While we recognise significant planning reforms are underway, there remain substantial projects awaiting approval that require urgent attention.
The Property Council is calling on the Victorian Government to prioritise reforms that:
- Reduce the property tax burden on the sector
- Streamline planning and approvals for major projects
- Fast-track Precinct Structure Plan delivery to unlock land supply
- Provide clear and consistent regulatory pathways
- Address workforce and supply chain constraints
"Without reform, we will continue to see housing supply lag demand, placing further pressure on affordability and renters.
"Boosting productivity isn't optional. It's essential if we want to deliver the homes Victorians need."
