A much-hyped plan to convert Melbourne CBD offices into residential apartments to unlock up to 12,000 homes isn't feasible for some buildings.
The Victorian government set a target to build 800,000 homes across the state each year over the next decade when unveiling its long-awaited housing statement in September 2023.
It also vowed to work with the Property Council of Australia and City of Melbourne to look at opportunities to convert almost 80 under-used commercial office buildings into about 10,000 to 12,000 apartments and mixed-use properties.
Almost a year on, Property Council of Australia Victorian executive director Cath Evans confirmed the policy was still in the planning phase.
Ms Evans said reaching the goal was not out of the question with the right incentives, including tax and rate relief for asset owners and reconfiguration of planning controls.
"Cost is a barrier presently," she told reporters at state parliament on Thursday.
"But with the right policy initiatives in place, this is achievable.
"Melbourne has gone through this in the past, it can do it again. We can rise to meet these challenges."
Housing Minister Harriet Shing conceded retrofitting and upgrading some buildings was "just not possible".
"It does come down to a question of cost and benefit and what that amounts to," she said.
"Retrofitting will be an opportunity that's available for some buildings but not for others, and this is where that work needs to continue."
The council and other stakeholders are meeting with the state government on Monday, with Ms Evans keen to get a detailed overview of progress on elements of the housing statement.
Ms Shing said Victoria had the most building approvals of any jurisdiction in Australia, despite Australian Bureau of Statistics figures showing just 11,071 homes were approved for construction in the state in the first three months of 2024.
Based on those figures, the state was on track to approve fewer than 45,000 in 2024.
Almost one in five Melbourne offices are also sitting empty, according to property council data released on Thursday.
The city's office vacancy rate rose from 16.6 per cent to 18 per cent in the six months to July, the highest in the nation.
Office vacancy rates also lifted in Canberra (8.3 to 9.5 per cent) and Perth (14.7 to 15.5 per cent) but dropped in Brisbane (11.7 to 9.5 per cent), Sydney (12.2 to 11.6 per cent) and Adelaide (19.3 to 17.5 per cent).
The increases in Melbourne, Canberra and Perth were largely driven by an increase in supply, rather than businesses closing.
