Vivien Topalovic, Property Journalist
First published 22 Oct 2026, 3:10pm
A federal and Victorian government housing deal will lead to the construction of more than 66,000 properties across the state, with 25,600 homes reserved for first-home buyers.
The deal will see 25,600 homes reserved exclusively for first-home buyers. Picture: Getty
Federal housing minister Clare O’Neil announced the agreement as part of the Albanese government’s election commitment to help deliver 100,000 new homes for first-home buyers across Australia.
Victoria is the latest state to sign up to the commitment, following South Australia , the Australian Capital Territory , Tasmania , Western Australia and Queensland . Collectively, the agreements are expected to deliver about 180,000 new homes, including more than 67,000 reserved for first-home buyers.
The Victorian deal will support 25,600 homes reserved for first-home buyers across 20 locations, including Melbourne, Geelong, Ballarat and Bendigo. The homes will include a mix of houses and apartments, with the first homes expected to be delivered in 2027.
“Young Victorians are working hard, saving hard and doing everything we ask of them – but too many still feel like owning a home is out of reach,” Ms O’Neil said.
“We’re putting first home buyers on a level playing field – and making sure thousands of the homes we help build are set aside for them to buy.”
Under the agreement, the federal government will provide $2.5 billion, made up of $2 billion in concessional loans and $499 million in grants. The Victorian Government will contribute at least $499 million.
The funding will help pay for essential infrastructure, including roads, water, sewerage and electricity connections – costs governments and industry say can hold up new housing projects.
Victorian premier Ben Carroll said the agreement would help more young families achieve home ownership.
“I want young families to have the prosperity and security that a home can provide.”
The Urban Development Institute of Australia (UDIA) welcomed the agreement, describing it as an important investment in housing supply at a time when the sector is facing higher costs and delivery constraints.
“This is a very welcome supply initiative to combat housing constraints driven by market upheaval from interest rates, property tax changes and existing supply shocks,” UDIA national president Oscar Stanley said.
“It is encouraging that government is focusing on unlocking supply and removing infrastructure barriers that hold back housing.”
Mr Stanley added it was now time for New South Wales to join the agreement.
“Industry is now keen to see a deal with New South Wales to drive market confidence and deliver much needed housing supply,” he said.
The Housing Industry Association also welcomed the agreement, saying builders were ready to deliver more homes if infrastructure bottlenecks could be removed.
HIA chief executive, industry and policy, Simon Croft, said the agreement recognised the importance of “key last mile” infrastructure, including roads, sewer and water piping, and electricity supply.
“This announcement recognises that the fastest and most effective way to help first home buyers is to unlock more housing supply, and that means removing the infrastructure and planning barriers holding projects back,” Mr Croft said.
HIA deputy executive director for Victoria Steven Wojtkiw said the funding would support housing growth across the whole state.
“Ensuring peri-urban and regional growth areas are supported by the funding is a positive step that will help bring forward new housing opportunities across the state, not just in greater Melbourne,” Mr Wojtkiw said.
“Any investment that helps unlock land, bring forward essential services and get homes to market sooner will make a real difference for Victorian first home buyers, and ease broader supply constraints.
“Getting the fundamentals right - land, infrastructure and approvals - is the key to improving housing affordability in Victoria.”
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