Greenfield developers are increasingly frustrated with delays in government approvals that are costing them millions in holding costs and land taxes. Rory Costelloe, executive director of Villawood Properties, illustrated this concern by highlighting that his company faces an $11.5 million cost due to postponed PSP approvals, which have been pushed from mid-2025 to 2026. These delays not only strain financial resources but also hinder infrastructure investments, contributing to an escalating affordability crisis in housing. Costelloe criticized the slow decision-making process, suggesting that bureaucratic inefficiency and excessive red tape have unnecessarily prolonged development timelines.
The Property Council of Australia’s Victorian executive director, Cath Evans, echoed these frustrations, pointing out that the slowdown in PSP delivery could jeopardize housing goals across the state. Homebuyers ultimately bear the brunt of these delays as extended timelines often lead to increased prices. Evans emphasized that a backlog in planning approvals directly impacts housing affordability, making it imperative for planning processes to be expedited. In light of this, she called for greater accountability from planners to ensure more timely processing of approvals.
Adding complexity to the situation, Costelloe argued that the Victorian government’s housing policy—mandating that 70% of new homes be built in established suburbs and only 30% on greenfield sites—misaligns with the housing aspirations of Australian migrants. He asserted that many new residents, especially those from the Subcontinent, prefer detached homes for families rather than living in apartments. This disconnect suggests a need to reassess the development policy, with Costelloe advocating for a more balanced approach, proposing a shift toward a 60/40 ratio between infill and greenfield housing.
Melbourne’s planning strategy has long aimed to limit urban sprawl, focusing on making better use of existing infrastructure and protecting farmland. Despite these goals, the city continues to expand outward, resulting in a sprawling, car-dependent environment. Infrastructure Victoria has consistently shared that the costs tied to supplying infrastructure for greenfield sites render unchecked growth economically and environmentally inefficient, thus promoting instead a more compact urban structure.
The Allan government recently unveiled a 10-year plan for greenfield development that aims to deliver 180,000 new homes across 27 planned precincts. A government spokesperson emphasized the urgency of improving the speed and certainty of planning processes, advocating for measures intended to shorten delivery timeframes for PSPs by one-third. New planning tools and pathways are being explored as part of this initiative to ensure timely implementation of housing developments.
Furthermore, the government has introduced a “concierge service” designed to liaise with councils and industry stakeholders, aiming to resolve issues that obstruct the development of zoned land. While there is recognition of the need for thorough planning, Evans cautioned against overly prescriptive regulations that may create a misalignment between planned designs and what is realistically achievable from both a design and economic standpoint. Enhancing the efficiency of the planning process while accommodating practical considerations could be key to meeting the housing demands effectively.
