The state government has made a flurry of announcements designed to boost Victoria's property development industry, but veteran agent Peter Nicolls is sceptical any of the measures will actually work.

In a succession of announcements, Premier Jacinta Allan outlined the government's plans to overhaul development contributions, reduce stamp duty, distribute $150 million in developer contribution funds and open more greenfields sites over the next 10 years for housing.

Mr Nicolls, who has been in real estate for more than 48 years, says it has never been harder to make money from building new dwellings in Victoria.

This is despite an ongoing housing shortage that is only getting worse.

He blames high interest rates, onerous regulations, property taxes and charges, the high price and scarcity of skilled labour and waning consumer confidence in the wake of multiple building company collapses.

He says developers are shying away from committing to new projects because profit margins are thin or potentially non-existent.

Mr Nicolls welcomed the stamp duty announcement that will apply for 12 months to apartments, townhouses and units purchased off the plan.

However, he does not believe it will lead to more supply or demand.

"It will save buyers a considerable amount of money, but in my experience apartments do not have strong capital growth. We are selling apartments in Knox for exactly the same price as 12 years ago, and the introduction of Stamp Duty savings on new apartment sales will have a detrimental effect on the resale of established apartments (as there are no stamp duty saving for them)” Mr  Nicolls said.

"They haven't appreciated because owners corporation fees are excessive and high interest rates have restricted the buying power of purchasers. Apartments offer good rental return but they offer no capital growth."

He said the situation was similar across Melbourne, including the CBD which has a "ridiculous" number of apartments on the market.

He cited a developer who owned a site in Boronia next to the railway station. Facing development costs of $20 million on an expected return of $22 million, the developer sold the site. He was not prepared to take the risk that he would even see $2 million in profit.

Another problem hamstringing the industry is the slow response of authorities like Melbourne Water, Power Companies, local councils and the Victorian Planning Authority.

"Developers are telling me that it is taking three to four times longer to complete developments, compared to 10 years ago. You can't get a planning permit for anything. And once you do have a planning permit, you are prisoner to the authorities because they are not assisting.

"Most  Precinct Structure Plans (PSPs) have not moved in the last three years."  The recent announcement to re-zone land in PSPs has no specific time lines.

Mr Nicolls says Council Contribution fees are already eye-wateringly high. In Cardinia Shire developers of new housing estates in Officer pay $746,922 per hectare and this figure is set to increase in 2025.

"Then there are public open space provisions, sewage charges, council supervision fees. There is no such thing as affordable housing because all the taxes and levies blow that out of the water."

According to the government, the new changes will affect the way local infrastructure funding is raised and spent.  It is scheduled to roll out on January 1, 2027, will initially be limited to the first 10 designated Melbourne "activity centres" in Broadmeadows, Camberwell, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood.

Another announcement was a plan to for 27 additional greenfield areas across Melbourne’s outer south-east, north, and west to be released over the next 10 years in a bid to build 180,000 homes. The first three greenfield plans set to be released in 2024-25 include: Northern Freight Precinct, an employment precinct in Whittlesea Council; Cardinia Creek South Part 2, a residential precinct in Cardinia Shire and Kororoit Part 2, the western corridor within Melton Council adjacent to Caroline Springs.

Mr Nicolls welcomed more greenfield land potentially being unlocked for housing on the suburban fringe, but identified a list of other areas ripe for development, places like Little River, Bangholme in Keysborough, Botanic Ridge near Cranbourne and pockets of Knox, all within 40 km of the CBD.

The government also announced that from 1 January 2025, the Victorian Planning Authority will be integrated with the Department of Transport and Planning and a dedicated concierge service will work with councils and industry to identify, intervene and fix the issues that are preventing zoned land from being developed.

However, Mr Nicolls says the government also needs to fix staffing issues at key authorities.

"Every project KR Peters is involved with is experiencing delays because of under staffing. There are delays and holdups everywhere," he said.

Mr Nicolls knows of builders installing their own generators on site because of delays in getting mains power connected.

"It's chaos out there.

"There is not enough skilled labour to meet the extra housing targets set by the government with all the Big Build jobs where people are getting paid $200 an hour to hold a street sign. The whole system is out of whack.

"Developers feel everything has become a nightmare. Their confidence is sapped and they can't put a project together that will show a profit."

Mr Nicolls says at the end of the day confidence is key and nothing he has seen from the government will instil confidence in builders or buyers.

"Builders don't have the confidence they will make a profit and who has confidence to buy off the plan at the moment?

"It would be fantastic if it was just a case of reducing the stamp duty, however interest rates need to come down, cost of labour needs to come down and the charges need to stay where they are or fall. The property industry can't afford for the government to keep increasing the cost of doing business."