Melbourne’s new units may be in increasingly short supply.

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Victoria has been riding high on the back of a building boom across the Covid-19 pandemic.

But with the vast majority of activity in the past two years centred in new housing estates. buyers looking for a new townhouse or apartment in established suburbs have had fewer and fewer choices.

New figures from the National Housing Finance and Investment Corporation and property advisory firm MacroPlan show the depth of the issue at a national level.

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In the current financial year, only 58,400 medium-density homes or apartments will be built, according to NHFIC forecasts. That only accounts for a third of new builds nationwide.

A similar percentage is expected in the next financial year and the number of new homes in this category will stay far below pre-pandemic levels until 2023-2024.

At that point about 84,000 builds would account for more than half of the nation’s new builds and get close to the 88,300 built in 2019.

At peak demand, in 2017, the development industry built 106,100 medium density homes or apartments around Australia — many of them units in Melbourne.

Buyers level of choice for off-the-plan apartments have declined in recent months.

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Property Council of Australia Victorian executive director Danni Hunter said in addition to reduced choice for buyers, the low numbers could soon leave the city facing an undersupply of the homes that have typically been a “release valve” for inner-city property markets.

“They offer an affordable option in well-serviced areas where houses might be out of reach,” Ms Hunter said.

Research by the Property Council and Urbis has also shown Victoria will lose 6000 construction jobs a year in the apartment sector.

But this shortfall could lead to good news for homebuyers in the medium term, with Ms Hunter noting the state government was being lobbied to return stamp duty concessions for apartments and townhouses across Melbourne. The Property Council is also urging a surcharge on international investment in such homes be removed, giving developers more incentive to bring more projects online. This would boost choices for buyers, help keep prices from escalating and mean a greater supply of rental homes.

A slew of homes that mark an evolution of Mirvac’s well-regarded Eastbourne development are expected to hit Melbourne’s property market in the near future.

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However Mirvac residential boss Stuart Penklis said he believed Melbourne was well positioned to rebound.

The firm would soon launch the tallest residential tower yet at their Yarra’s Edge project, Tower Nine.

A Brunswick site looking across to Princes Park is also being prepared as an “evolution of Eastbourne”, a high-end project the firm completed in East Melbourne in 2019.

In both instances, Mr Penklis said they expected larger homes to be popular.

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