FEDERAL Housing Minister Clare O’Neil will not bow down to anti-development voices in her electorate, signalling important support for efforts to fix Australia’s housing crisis. At the risk of courting a NIMBY (an acronym for the phrase “not in my backyard”) backlash from locals opposing the Victorian government’s efforts to densify Melbourne’s established inner suburbs, Ms O’Neil backed large-scale developments in her home suburb of Oakleigh in the city’s well-heeled east.
The mother of three took aim at communities that accepted the need for more housing but only if it was “in someone else’s neighbourhood”, calling them one of the biggest barriers to meeting Australia’s supply challenge.
“Oakleigh’s my home, and I want my kids to be able to afford a house one day. So of course, it’s going to mean more densification near where I live,” Ms O’Neil said in a one-on-one interview.
Oakleigh is one of 50 new “activity centres” announced by the Victorian government.
Centred on high-frequency train and tram stops across some of Melbourne’s highest-amenity suburbs, the changes will raise height limits for new developments up to 16 storeys and exempt eligible applications from tribunal (VCAT) review.
Oakleigh is largely made up of low-rise, one- or two-storey developments.
The train station at the heart of the suburb, which is set to enjoy increased frequencies and improved services to the city when a metro tunnel is complete, is surrounded by surface parking and rows of one-storey shops.
While Ms O’Neil acknowledged some of her constituents would be concerned about the changing nature of the neighbourhood, she believed people understood the need for more housing.
“One thing that is absolutely solid right throughout my community is concern about housing and concern about how it’s impacting the next generation,” she said.
Jonathan O’Brien, lead organiser of pro-housing group YIMBY Melbourne, said it was “super important” for the federal government to support Victoria and NSW’s upzoning agendas in the face of NIMBY opposition.
“Insofar as a lot of these powers sit at the state level, one of the most important things the federal government can do while the states are implementing these reforms is to back them in,” he said.
When Premier Jacinta Allan unveiled the upzoning plans in October 2024, incensed residents of the exclusive bayside suburb of Brighton took to the streets in protest.
Local state MP James Newbury, who is also the Liberal opposition’s planning spokesman, addressed the crowd, vowing to halt the government’s plan if elected.
He is one of many politicians who support more housing supply on a conceptual level but still find it challenging to back development in their own neighbourhoods amid vocal opposition from constituents.
And it’s not confined to one side of the political spectrum.
Federal teal MP Monique Ryan also criticised the Allan government for failing to consult communities about the plans, while Labor MP Andrew Charlton pushed to stop construction of an eight-storey apartment complex in his electorate of Parramatta.
Sydney teal Nicolette Boele opposed an 11-storey development in the leafy north shore suburb of Castlecrag.
Ms Boele chafed at the NIMBY vs YIMBY “false binary”, arguing communities supported reasonable increases in density when they were properly consulted, in an August op-ed in the Australian Financial Review.
The problem with community consultation is it is inherently unrepresentative of the community, argues YIMBY Melbourne.
Participants skew towards time-rich property owners and older residents over time-poor renters and younger residents, while people outside of the council area who would also benefit from more housing don’t get a say at all.
In a YIMBY Melbourne analysis of 17 community consultations across seven Melbourne councils, homeowners were over-represented compared to the demographics of the area in 100 per cent of the sample.
While more supply benefits society broadly, it comes with the local cost of altering the status quo, Mr O’Brien said.
“One of the things that has ossified housing growth in our cities for decades is no one is willing to take on localised change for society-wide benefit,” he said.
“I think we’re beginning to see that shift as people understand what needs to be done if they want their kids to be able to live near them.”
Ms O’Neil said she didn’t like to label herself but would accept the label of YIMBY if others applied it to her. “I’m sure every person in parliament is really concerned about increasing homelessness that we see in all of our suburbs around the country,” she said.
“We just need to help people understand the connection here. If we want to solve these problems, then we need to build more housing more quickly, and part of that is going to involve middle-ring densification.”
Ms O’Neil said the federal government’s $43 billion housing agenda was the most ambitious since the Second World War.
More than 5000 social and affordable homes have been completed with Commonwealth funding since the Albanese government was elected, while more than 25,000 are now in construction and planning as part of the Housing Australia Future Fund.
Labor has also moved to freeze the National Construction Code, started work on a national occupational licensing scheme and put more support behind modular construction methods to help speed up the delivery of new homes.
But Australia is still destined to fall short of its target of 1.2 million new homes over five years.
Opposition housing spokesman Andrew Bragg called the national housing accord a “dead duck”.
“The facts don’t lie: Labor is spending more money than ever to build fewer homes. They have no idea about housing, and their policies are making things worse,” he said.
By Lewis Panther
§ Economists: Prices to surge as housing schemes kick in
Recent history shows similar initiatives resulted in double-digit percentage price increases, according to a round-up of respected economists critical of the government scheme.
Prospective buyers need to be quick off the mark to take advantage of the government’s Home Guarantee Scheme.
Economists are warning the fast-tracked initiative will see a double-digit percentage hike in property prices as demand surges.
Domain chief economist Dr Nicola Powell said: “My advice to first-home buyers is if you want to use that policy, get in quick.
“People who are going to benefit are those who get into the scheme first.
“We have a long history in Australia of governments loving to turn on the demand switch through an incentive - which is what this is.
“That supports rising property prices.
“Ultimately, wave one of first-home buyers will benefit.
“Wave two will be paying higher pricing.
“The only way to counterbalance that is if we see an increase in affordable supply and that isn’t happening.”
Veteran analyst Louis Christopher - managing director of SQM Research – highlighted the way prices surged after a similar initiative in 2009.
Noting first-time buyers will potentially save more than $100,000, he said the “huge saving” is similar to the experience from 2009 after the GFC.
Buyers saved up to $15,000 that year, and the number of home buyers entering the marketplace doubled, pushing prices up 18 per cent.
“In terms of the health of affordability over the medium to long-term, it’s going to be bad news.”
Former REA and CoreLogic analyst Cameron Kusher said: “I think Treasury is kidding itself if it believes the overall impact is 0.5 per cent over six years.
“We’ve seen this play out before. First-home buyers jump at these incentives and start buying, which pushes prices higher, allowing existing owners to upgrade and invest which pushes prices even higher.
“I just can’t see at this point a way in which this incentive - or ones that provide even greater assistance in the future are ever taken away - and that’s the problem.”
Housing Industry Association chief economist Tim Reardon said: “There can be no doubt, that at least in the short term, that this announcement will see home prices rise.
“Removing the requirement for Lender Mortgage Insurance provides first-home buyers with an extra $25,000 in their deposit and will see more first home buyers active in the market from 1 October, 2025.
“At the same time the supply of homes is fixed. It takes at least six months to build a new home. A rise in demand, while supply is fixed, will see home prices rise.”
Property Council chief executive Mike Zorbas is another who noted the price rise inevitability.
“I cannot emphasise strongly enough, scheme design will need to be carefully reviewed on a regular basis from 1 July, 2026 to ensure key housing markets do not overheat,” he said.