Melbourne, VIC. In early 2025, the Victorian Government launched a broad package of planning reforms aimed at delivering 800,000 new homes over the next decade. With the introduction of new zoning tools and faster processes, Victoria is setting itself up to become the townhouse capital of Australia.
Key Reform Highlights
Revised Residential Codes (VC267)
- A new Townhouse and Low-Rise Code replaces Clause 55. It applies to buildings up to three storeys.
- It includes “deemed-to-comply” standards that remove third-party appeal rights for qualifying applications.
Housing Choice and Transport Zone (HCTZ) + Built Form Overlay (BFO)
- These were introduced via VC257 in February 2025 around 10 pilot activity centres.
- This allows up to 3 to 12 storeys (up to 20 in major centres) in cores, with streamlined, notice-free approvals when developers follow strict design standards.
Precinct Zone (VC274) & Consumer and Planning Legislation Amendment Act 2025
This empowers master-planned precincts, such as the Suburban Rail Loop, with simpler, appeal-free planning paths.
Targeted Suburban Growth
- Pilot activity centres include Camberwell Junction, Broadmeadows, Chadstone, Epping, Frankston, Moorabbin, Preston, Ringwood, and more.
- Another 25 centres have been announced. Up to 50 more are planned along train and tram corridors.
Expected Benefits
- Faster approvals: Permit timelines for compliant townhouse applications drop from around 145 days to under 60 days.
- Increased supply: Developers gain certainty with predetermined height limits, setbacks, solar access, ventilation, tree canopy, and open space standards.
- Sustainable urban growth: Focusing on transit-oriented locations helps reduce sprawl and lessen infrastructure burdens.
Community Concerns & Pushback
- Residents worry about height limits and losing the character of established suburbs like Camberwell.
- Critics, including RMIT’s Prof. Buxton, warn this could lead to a “fourth-rate city” if not balanced with design quality.
- Local councils fear they might lose planning powers and third-party appeal rights.
- Government responses say that time frames and infrastructure demands require bold action.
What This Means for Buyers, Sellers & Investors
- Homebuyers can expect a wider range of townhouse and low-rise options closer to transport, with faster completion timelines.
- Sellers in rezoned activity centres may benefit from increased demand and opportunities for two-home subdivisions.
- Investors interested in multi-dwelling projects or NDIS properties will find clearer paths for development and lower regulatory risks.
- However, buyers who care about heritage, families in leafy suburbs, and those wanting appeal rights should be aware of changes in neighborhood dynamics.
