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Infrastructure Victoria, Our home choices: how more housing options can make better use of Victoria’s existing infrastructure

Our home choices: how more housing options can make better use of Victoria’s existing infrastructure shows more choice and housing diversity is needed to meet people’s needs as Victoria’s population grows.

This report looks at how existing demand for housing in new greenfield suburbs can be shifted to established suburbs, closer to existing infrastructure such as schools, hospitals and public transport.

Our 18-month research project included 22 focus groups, analysis of more than 344,000 properties sold from January 2017 to June 2022 in greater Melbourne, and a survey of over 6000 people from Melbourne, Geelong and Ballarat – the largest of its kind in Australia.

One in 5 households said they would trade a detached home in a new suburb for a townhouse or apartment for the same price closer to city centres. These families and first home buyers want more housing choices closer to existing infrastructure and family and friends. Our analysis shows there is a lack of suitable housing for moderate income households, especially families and first home buyers, in established suburbs. This is pushing people further away from jobs, schools and public transport, and locking them in to more travel time in the car.

We offer 10 policy options for the Victorian Government to support more choice for moderate income households who prefer to live in established suburbs, including: fast-tracking planning approval for high-quality townhouses, better standards for low-rise apartments and changes to developer infrastructure contributions.

The proposed policy options are:

  1. Reform infrastructure contributions to send the right price signals
  2. Reform stamp duties that distort home choices
  3. Remove home subsidies that encourage greenfield choices without improving affordability
  4. Use government ‘shared equity’ schemes to encourage established suburb home ownership
  5. Measure and incentivise progress towards new local housing targets
  6. Prioritise and streamline approvals for urban renewal precincts
  7. Develop better standards for low-rise apartments, then increase their supply by expanding use of the Residential Growth Zone
  8. Develop a dual occupancy and townhouse code
  9. Allow homebuyers more parking options
  10. Encourage child-friendly design in new apartments.

A summary of supporting documents is below:

Infrastructure Victoria, Our home choices: policy evidence, 2023

This report describes the findings from Infrastructure Victoria’s literature reviews and qualitative stakeholder research including:

  • robust evidence to support the selection of the 10 policy options that the Victorian Government can apply if it wants to encourage a more compact Melbourne
  • the identification of the policy options that can be applied to Geelong and Ballarat should the Victorian Government choose to encourage these regional cities to also become more compact
  • a summary of the issues influencing the supply of new housing in established suburbs
  • findings from key stakeholder interviews including household location and dwelling attribute preferences and a summary of greenfield housing characteristics.

Infrastructure Victoria, Measuring home price differences: how features, location and infrastructure affect Melbourne’s home prices, 2023

This report describes how Infrastructure Victoria developed new price models to examine what features people value when choosing a home, like bedrooms, car spaces and being close to public transport. It also examined what type of homes are affordable to moderate income households in specific parts of Melbourne.

The hedonic price model helps to better understand people’s preferences for dwelling and location features and the type of homes moderate income households can afford. It gives insights about the drivers of housing demand, housing affordability and the alternative home types that could substitute for houses in new suburbs at similar market prices.

This research fills existing gaps about the home types and spatial areas that are affordable for moderate income households in Melbourne. It also evaluates the economic value of proximity to many types of infrastructure.

The Centre for International Economics, Demand for housing in Victoria: stated preference research, Infrastructure Victoria, 2022

This summary report provides the findings from the choice model that the Centre for International Economics developed to predict people’s home choices, and how they respond to housing market changes.

The report describes how this choice model answered these 3 research questions:

  • identify which housing features are most important in household decision-making
  • determine under what circumstances households living in (or likely to live in) growth areas would choose to live in a different area
  • identify the characteristics of households who are more likely to shift their home choice from growth to established areas.

The Centre for International Economics, Demand for housing in Victoria: stated preference research technical report, Infrastructure Victoria, 2022

The Centre for International Economics technical report provides further detail to the summary report including questionnaire design and testing, sampling techniques, econometric models used and modelling results.

The study used a discrete choice experiment survey to develop a detailed model of housing demand in Melbourne, Geelong, and Ballarat. The output of the study is a rich model of consumer preferences that could be used to answer numerous research questions.

Wallis Social Research, Influencing greenfield housing demand qualitative research – summary analytical report, Infrastructure Victoria, 2022

The summary analytical report describes the findings from the focus groups research. Wallis Social Research talked to 122 Victorians about their home choices and the trade-offs they made. Wallis led 22 focus groups during June and July 2022 and captured perspectives from owner-occupiers and renters in greenfield suburbs in Melbourne, Ballarat, Geelong and Bacchus Marsh. These perspectives were contrasted with medium density home owner-occupiers in established suburbs, and residents in established suburbs who had decided not to live in greenfield areas.

Wallis Social Research, Influencing greenfield housing demand qualitative research – technical report, Infrastructure Victoria, 2022

The technical report provides a summary of the focus group research processes and outcomes. This methodological report provides sufficient details on research processes that allows the research to be replicated elsewhere without any material differences. It includes the study design and the analytical approach applied to draw out the key findings.

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