Victoria deal to unlock 66,000 homes, 25,000 for first home buyers

The federal and Victorian governments have agreed to fund infrastructure such as roads, water and sewerage to unlock more than 66,000 new homes, with more than 25,000 reserved for Victorian first home buyers, federal Housing Minister Clare O'Neil announced on 21 October. First home buyers are due to start moving in from 2027-28.

The buyers are already in the market. Housing Australia data released by Ms O'Neil on 1 October shows 33,413 Victorians were supported by the federal 5 per cent deposit scheme in the last year, more than in any other state.

The deal, by the numbers

• Federal funding: $2.5 billion, made up of $2 billion in concessional loans and $499 million in grants.
• Victorian funding: at least $499 million, matching the federal grants.
• Homes: more than 66,000, including more than 25,000 reserved for first home buyers and around 41,000 additional homes.
• National share: the reserved homes are a quarter of the commitment to help build up to 100,000 homes for first home buyers.

Where the homes for Victorian first home buyers are

The projects announced so far, according to the release:

• Inner Melbourne: $82 million for infrastructure and construction to support 474 homes for first home buyers.
• Greater Melbourne: $698 million for enabling infrastructure to unlock more than 47,000 homes, including 11,923 for first home buyers.
• Regional Victoria: $91 million to support 5,800 homes, including 1,900 for first home buyers.
• Other programs: $55 million to support 2,040 homes through the Peri Urban and Regional Infrastructure Fund and the Rent to Buy Pilot Program for First Peoples.

On those figures, the named projects identify 14,297 of the reserved homes, more than half. The $55 million stream does not say how many of its 2,040 homes are for first home buyers, but even if all were, more than 8,600 reserved homes are still to be tied to projects, with more announcements due in coming months.

How the program works

The deal is Victoria's part of Labor's 2025 election commitment. The Parliamentary Budget Office's costing of that commitment describes $10 billion, a $2 billion grant and $8 billion in zero-interest loans or equity, to build up to 100,000 homes "for sale only to first home buyers", with states and territories required to match the grant.

Neither the Victorian release nor the South Australian announcement sets out who can buy the reserved homes, at what price, or how sales will be restricted. South Australia's deal, the first under the program, shows one form it can take: a first home buyer only precinct of 400 homes at Playford Alive.

The release says the Victorian deal builds on existing deals with South Australia, the ACT, Tasmania, Western Australia and Queensland, which combine to deliver around 180,000 new homes, including more than 67,000 reserved for first home buyers. New South Wales is not on the list, and UDIA National President Oscar Stanley said industry was now keen to see a deal there.

What the minister and industry say

Ms O'Neil said young Victorians were "working hard, saving hard and doing everything we ask of them", but "too many still feel like owning a home is out of reach". She said the government was "making sure thousands of the homes we help build are set aside for them to buy".

UDIA Victoria CEO Linda Allison said: "Infrastructure funding alongside new housing is one of the biggest challenges in delivering new homes, particularly in growth areas and regional cities, so it is pleasing to see a focus on unlocking more areas for more homes."

HIA Deputy Executive Director Victoria Steven Wojtkiw said: "Victorian builders are ready to deliver, but too many projects are slowed by infrastructure constraints and delays outside their control." The deal comes as new home sales fell 10 per cent in August.

What it means for agents

• Watch for the next projects. More than 8,600 reserved homes are not yet tied to named projects. Of those named so far, 11,923 are in greater Melbourne and 1,900 in regional Victoria.
• Do not get ahead of the rules. The releases set no eligibility criteria, price points or resale conditions for the reserved homes. Buyers asking about first home buyer only stock should be told the details are still to come.
• Existing homes still carry the volume. The reserved homes arrive from 2027-28, while 33,413 Victorians were supported by the deposit scheme in the last year alone. Until then, first home buyers will be buying existing homes or other new stock.