Victoria Approves More Medium-Density Housing Than Sydney, Brisbane Combined

The Victorian Parliament passed the Housing Density Reform Bill in late June, altering planning zones to permit three-storey townhouses and small apartment blocks in more residential streets across Melbourne.

The change responds to state population projections that show Melbourne adding 1.2 million residents by 2040, a faster rate than Adelaide or Perth, according to the Department of Transport and Planning documents released in May.

How Melbourne Compares With Other Capitals

Under the bill Melbourne councils must identify 25 activity centres for increased density within 800 metres of train stations, a broader catchment than the 400-metre rule that applies in Sydney under the New South Wales housing targets.

Brisbane planning rules still require separate rezoning applications for most medium-density projects, while Melbourne approvals can now proceed through a streamlined code assessment process once local structure plans are updated.

Policy analysts say this difference means a typical block in Melbourne’s inner west could gain four extra dwellings without a full planning permit hearing, whereas the same site in Brisbane would face at least one additional public notification round.

Daily Effects for Local Households and Services

Residents near the Metro Tunnel stations at Arden and Parkville can expect construction of new units to begin within two years once councils finalise their housing plans, adding pressure on local schools and tram services already carrying peak loads above 80 per cent capacity during morning hours.

The legislation states that infrastructure contributions from developers must be paid before building permits are issued, directing funds toward local road upgrades and open space rather than state-wide projects such as the West Gate Tunnel.

Implementation begins with council submissions due by December 2026, after which the state government will publish annual progress reports tracking completed dwellings against the 80,000 target set for greater Melbourne by 2031.