Delays in Melbourne’s building boom are hitting buyer’s pockets, with new analysis revealing areas with declining new home approvals are recording property price surges.

A year after the Victorian Housing Statement announced plans to build 80,000 homes a year as a way to deal with the state’s housing affordability crisis, Australian Bureau of Statistics figures show 17 metropolitan councils recorded a significant decline in the number of new addresses given the nod.

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Separate PropTrack figures show that across the same 2023-2024 financial year, a dozen of those suburbs have had a lift in the median unit price — many of them soaring significantly — and 10 of them recorded a house price spike compared to the prior 12 months.

Unit prices jumped a whopping 8.7 per cent in the City of Whitehorse, at the same time as the number of new home approvals dropped by 550.

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There was a 7.8 per cent increase in the Yarra where the number of properties being green-lit for development dropped by 431, and in Merri-Bek unit values surged 6.6 per cent after approvals fell by 798.

The increases reflect the popular regions’ high demand for housing, as Victoria’s population grows faster than its housing supply.

Meanwhile, the vast majority of areas approving the most additional new homes compared to a year ago have had unit price growth slow to below the 3.8 per cent Consumer Price Index increase.

Senior economist at PropTrack Paul Ryan hightlighted areas with a rise in housing approvals were likely to be following a longer-term trend.

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In Moonee Valley, where most new approvals were for units, a 332 new-home lift coincided with a 1.1 per cent decline in the area’s typical price for an apartment or townhouse.

PropTrack economist Paul Ryan said area’s with an increase in housing approvals were likely to be following a longer-term trend and also recording a rise in competed homes from those given the green light in the years before.

“And that’s keeping a lid on prices,” Mr Ryan said.

But the economist warned that the concern was the reverse situation seemed to confirm if there were delays in building more homes, that would hit homebuyers’ hip pockets as prices rose.

“Drastic things need to change now if you are going to reach those targets,” Mr Ryan said.

“There’s a lag time between approvals and completions, when the homes will be there for buyers to live in.”

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He said another benefit of slowing home price growth in areas with more housing construction was that it could help convince existing residents, worried about how their children would be able to afford a home, to look more favourably on higher-density development — potentially speeding up housing approvals in the future.

Housing Industry Association chief economist Tim Reardon said the data showed that increasing housing supply could stabilise home prices.

“The undeniable truth behind the housing crisis is the undersupply of new homes,” Mr Reardon said.

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