Victoria Raises Melbourne Density Standards to Match Sydney and Brisbane by 2027

The Victorian government introduced the Planning and Environment Amendment (Increased Housing Density) Bill 2026 on 6 July. The legislation establishes minimum dwelling densities for new residential projects inside 20 designated activity centres across the state. Melbourne accounts for 14 of those centres, including Footscray, Box Hill and Sunshine.

The bill responds to housing supply targets set in the 2025-26 state budget papers. Those papers list an additional 80,000 dwellings required in Melbourne by 2031 to match population forecasts from the Australian Bureau of Statistics. Similar density rules have operated in New South Wales since 2022 and in parts of south-east Queensland since 2024.

Daily effects for Melbourne households

Residents in suburbs served by the Metro Tunnel will face planning applications that must meet at least 45 dwellings per hectare inside the activity centre boundary. The same threshold applies to land within 800 metres of West Gate Tunnel interchanges. Local advocates note this will increase the number of apartment and townhouse approvals near existing rail stations and bus interchanges.

Policy analysts say the Melbourne targets sit below current Sydney western corridor requirements of 55 dwellings per hectare but above Brisbane inner-south figures of 40 dwellings per hectare. The difference means developers working in Melbourne activity centres will lodge fewer variation requests than their Sydney counterparts yet more than those in Brisbane.

Next steps in the legislature

The bill is listed for second reading in the Legislative Assembly on 22 July. If passed unamended, the new density schedules will take effect on 1 January 2027. The government says the policy will be reviewed after three years using data from the Department of Transport and Planning.