Victoria's regional housing targets: will your area boom or stagnate?

Premier Jacinta Allan released draft housing targets on June 16 for every local government area across the state, with the goal to build nearly 2.5 million new dwellings in the next 26 years.

But in regional Victoria the growth will be concentrated in areas closer to Melbourne, as well as larger regional centres like Ballarat and Bendigo.

The government has renamed its city-focused Plan Melbourne strategy 'Plan Victoria', but the new targets reveal a further shift away from regional living.

Several regional councils have called the targets "sensible" and "realistic", while others have criticised the government for "blindsiding" them.

But the most crucial question - as regional residents grapple with dangerous roads and a lack of healthcare, childcare and basic support services - is whether the government can deliver the infrastructure to turn targets into houses in liveable new neighbourhoods.

The government said it was now up to local councils to analyse and respond to the targets, but some councils have more work to do than others.

Mitchell Shire, between Melbourne and Bendigo would more than quadruple in size if it meets its draft target.

Mitchell Shire's 21,800 dwellings are forecast to jump to 89,800, a spike of 312 per cent, which would require houses in the area to be built at double their current rate.

In nearby Bendigo the number of dwellings is supposed to rise just 68 per cent, taking the total from 54,900 to 92,400. It would mean Mitchell Shire would go from being less than half Bendigo's size, to the same size, in barely 20 years.

Ballarat is also on track to eclipse Bendigo if it follows the targets, rising by 88.5 per cent to 99,900 dwellings by 2051. The city will have to build nearly 2000 houses a year to meet the target.

The fastest growing regional areas under the plan - apart from Mitchell Shire - are concentrated to the south-west of Melbourne.

Geelong will add 140,000 new dwellings to grow by 110 per cent. It means Victoria's second biggest city, which was founded nearly 200 years ago, will more than double in size in just a tenth of that time.

Golden Plains Shire to the west and Moorabool Shire to the north-west will both also more than double, according to the targets.

Moorabool has consistently been in the top five regional areas in Australia for internal migration over the past two years and should add nearly 20,000 new dwellings by 2051. Golden Plains will add nearly 12,000 homes, growing by 120 per cent as it absorbs overflow from Geelong.

But looking further west, the growth is almost non-existent. The Wimmera and Mallee will grow by well under 10 per cent, with Buloke (3 per cent), Yarriambiack (8 per cent), Hindmarsh (6 per cent) and West Wimmera (9 per cent) forecast to add less than 1000 houses between them in two and a half decades.

The government's vision for south-west Victoria is also modest. Corangamite, Glenelg and Southern Grampians shires will only grow by about 15 per cent. Moyne Shire will expand by 32 per cent and Warrnambool by 42 per cent.

Warrnambool's target might look relatively healthy, but it pales in comparison to the similar-sized Wodonga at the other end of the state.

Wodonga is supposed to add 14,400 houses by 2051, more than double Warrnambool's target of 6900.

While the target of 460,000 new homes in regional Victoria might sound high, it would represent a further population shift towards Melbourne.

Government figures said there were 787,700 houses in regional Victoria in 2023, which was 27 per cent of the state total of 2,922,200.

But the 460,000 dwelling target for 2051 would be just 18.7 per cent of the 2,461,200 homes the government is planning for statewide.

Regional mayors have differed wildly in their opinion of the government's plan.

Wodonga's ambitious housing target has incensed some local representatives.

Councillor Libby Hall pointed out the "irony" of the government proposing to nearly double the local population while refusing to pay for a hospital that met the needs of the current population.

"We are being largely overlooked and ignored," Cr Hall said.

"How can you even look at even increasing our population without the desperately needed infrastructure that needs to go with a population of such increase?"

The state government also quietly slashed the scope of Warrnambool Base Hospital's $384 million redevelopment on June 13 after promising not to do so at least a dozen times in the past two years.

The state government said its targets were "largely based on access to the jobs, transport and services Victorians need".

The Regional Australia Institute declined to comment on the new targets, but in late February its senior economist Dr Kim Houghton criticised the government's lack of regional infrastructure planning.

"We need to start taking this stuff seriously. This is no longer a post-COVID blip, this is a long running constraint on national economic growth," Dr Houghton said.

"A lot of regional communities are feeling the pinch, particularly in social infrastructure, housing, community services, childcare, all those sorts of things have been underdone."

The Planning Institute of Australia (Victoria) also warned more work needed to be done for the targets to be "more than just numbers".

Branch president Pat Fensham said the "carrying capacity" of each area needed to be considered, including public transport, major state investments in health, education, parks, community and other social infrastructure.

Alpine Shire mayor John Forsyth dismissed the targets as a meaningless "political statement" and criticised the government's claim that the ball was now in the councils' court.

"The planning rules are set by the state," Cr Forsyth said.

"In order to get things rezoned, it has to go through the state. Changes to the planning schedule sit with the minister. Councils can put them in, but it can take 18 months before anything actually happens."

A City of Greater Bendigo spokesperson said the targets were in line with the council's pre-existing growth strategy.

"[The 37,500 dwelling draft target] is similar to the city's projections which estimate a growth rate of 1.6 per cent," the spokesperson said.

"Importantly, regardless of the dwelling projections there will need to be more dwellings in the established areas of Greater Bendigo."

Warrnambool mayor Ben Blain called the city's much smaller target "achievable" and "realistic", but said there were some question marks.

"There is some more detail we'd like to see - is this approvals or builds? So we'll be working with the state government on that," Cr Blain said.

"We'd also be looking for more support from the state government in achieving those targets, especially with infrastructure funding, fast-track approval and windfall profit gains taxes."

But Moyne Shire - which is supposed to add nearly 3000 dwellings - suggested the government needed to speed up its processes if the ambitious targets were going to be met.

Moyne's environment, economy and place director Jodie McNamara said the council had a range of housing initiatives in place and asked the government to look at improving its own processes.

"Moyne still has two amendments with the minister for approval dating back to March 2023 which could potentially open hundreds of new housing lots," Ms McNamara said.