Data reveals disconnect between housing approvals and construction despite Jacinta Allan’s claims
Melbourne councils react to prime minister’s claims they are the bottleneck in the housing crisis; Instead, he blames market conditions, land banking and state government delays for tens of thousands of housing stalls.
As the state government positions the November election as a NIMBY versus YIMBY contest and ramps up pressure on local government to meet targets, new data from the Victoria Municipal Association reveals the disconnect between what is approved and what is actually built.
Only nine of 1,178 homes approved in the city of Maribyrnong over the 18-month period in 2023 and 2024 have been completed. Almost 1,000 (84 percent) of the approved homes have not even begun construction.
In the outer eastern suburb of Ringwood, 50 per cent of all homes approved since 2016 (1159 out of 2032) remain unbuilt. In the leafy inner east, 669 of the 2,522 homes approved in the Camberwell Junction catchment since 2011 have never been realized.
Prime Minister Jacinta Allan and Planning Minister Sonya Kilkenny have intensified efforts to frame the housing crisis as a direct competition between “blockers,” the “Not in My Backyard” (NIMBY) contingent, and “builders” championing the “Yes in My Backyard” (YIMBY) movement.
“We are throwing out the old NIMBY planning laws and saying yes to building more and faster homes,” Allan said in October last year.
The government targeted wealthy inner-city councils and accused them of excluding millennials, while mocking opposition MPs such as Brighton’s James Newbury as NIMBYs.
But Port Phillip Mayor Alex Makin said the state government needed to “hold a mirror to itself” before “hurling havoc” and blamed the local government for housing delays.
Makin pointed to ongoing delays at Fishermans Bend, the nation’s largest urban renewal project that could house 80,000 people, as evidence that the state government is an impediment to new inner-city homes.
He said the council waited more than a year for the government to finalize developer contribution plans, delaying the delivery of essential infrastructure, while the Montague area implementation plan was years late.
“It’s easy for the state government to blame local councils. They need to understand that they are actually the cause of many of these delays,” Makin said.
In Whitehorse, once the epicenter of Melbourne’s suburban high-rise boom, Mayor Kirsten Langford reported a significant decline in activity. Housing planning applications have fallen from 1,500 a year to 1,000 in 2025.
“This is a reflection of the increasing cost and complexity of doing business,” Langford said. “There are no cranes on Box Hill today.”
Victoria Municipal Association president Jennifer Anderson said evidence proved councils were constructive partners in housing delivery.
“The local government sector in Victoria has been pursuing housing strategies to deliver more affordable homes to Victorians for decades, including using local programs and policies to deliver better designed homes in well-served areas.”
Merri-bek Mayor Nat Abboud said that 94 percent of planning applications in 2025 were approved within the legal deadlines.
A council spokesman said many permits had failed to progress to the construction stage due to “increasing costs of construction, finance, interest rates, taxation and in some cases land banking”.
The centerpiece of the government’s planning overhaul was the creation of “activity centres” in 60 areas close to public transport; here local laws will be overridden by state-mandated height limits that encourage density.
The government has also introduced codes to fast-track low- and mid-rise buildings, removing the right of residents and councils to object to applications at VCAT.
The policies were strongly opposed by the Coalition but supported by key industry groups.
Opposition planning spokesman David Southwick said rising costs and state taxes were the real reasons why permits remained “on the shelf”.
Southwick said he had been told by councils there were 17,000 inactive permits in the city of Melbourne alone. He said 3,000 approved homes remain dormant in Kingston and seven Box Hill towers remain dormant.
Inner city councils including Glen Eira, Stonnington, Bayside and Boroondara have told the opposition their building plans have the capacity to deliver 400,000 homes; That figure is nearly double what the state’s activity centers are projecting through activity centers for the same areas by 2051.
“The government’s argument for canceling council area building plans is simply not valid,” Southwick said.
Jonathan O’Brien, chief organizer of lobby group YIMBY Melbourne and supporter of the government’s planning reforms, said councils were deliberately maintaining a restrictive environment that limited the viability of planning applications.
“If you did it so that apartments could only be built on 5 percent of your land, then you created a constrained regulatory environment,” O’Brien said. “The answer is to increase the number of opportunities where it is legal to build.”
O’Brien said maximizing approvals is vital, even in a tough economy. “Even if not everything is being built… the reality is we have some levers, and one of them is our ability to approve things through the regulatory process.”
The research conducted by the lobby group in 2024 revealed that metropolitan municipalities approved an average of 70 percent of new home permits. Brimbank recorded the highest approval rate at 90 percent, while Banyule recorded the lowest approval rate at 39 percent.
A spokesman for Kilkenny said outer suburban councils had carried the housing burden for too long, while well-connected inner areas such as Boroondara and Bayside had experienced slow growth.
“This is not fair,” the spokesman said. “We are fixing this problem by overhauling the planning system, cutting red tape and lowering upfront costs so more homes can be built close to public transport and the jobs and services Victorians rely on.”
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Daniella White is The Age’s state political correspondent. Contact her at da.white@nine.com.auConnect with: X or email.
