Jane Smith on why Melbourne cannot build apartments fast enough
The managing director of Example Developments has spent two years arguing that Victoria's housing shortfall is an administrative problem rather than a financial one. She explains what changed, and what she thinks will not.
Jane Smith has run Example Developments since 2016, and has been with the company long enough to have delivered apartments through three distinct cycles: the pre-2017 boom, the pandemic freeze, and whatever the current period turns out to be called.
She is unusual among developers in being willing to put numbers on the record. Her firm publishes its own approval timelines, and she has given evidence twice to the Victorian planning reform panel. We met in the company's Cremorne office on a Tuesday morning in August, two days after the panel's submissions were made public.
“Melbourne cannot build apartments fast enough.”
Jane Smith, Managing Director
Q.You've said publicly that Melbourne's problem is not demand. What is it?
It is time. Everything else can be solved with money, and money is available — expensive, but available. Time cannot be solved with money. If a project takes fourteen months to get through assessment and then another six months through the referral authorities, that is twenty months in which I am paying holding costs on land, my builder's price is expiring, and the market I underwrote against has moved.
The apartments we are completing this year were designed against a 2022 view of the market. That is not a system that can respond to a shortage.
Q.Councils would say the applications they receive are incomplete.
Some are. That is fair, and I have seen the applications they are talking about. But the projects that are complete on lodgement do not move meaningfully faster, and that is the part that should worry everybody. If quality of lodgement were the constraint, the good applications would clear quickly. They don't.
Q.What would you change first?
Statutory response windows on referral authorities, with a deemed approval if the window lapses. It sounds bureaucratic and it is the single highest-leverage change available. About a third of our elapsed time sits with authorities that have no deadline.
I would also make assessment timeframes public per council. Not as a naming exercise — as information. Right now a developer choosing between two sites cannot price the difference in approval risk, so they price both conservatively, and that shows up in what they can pay for land, which shows up in what gets built.
Q.Construction costs have stabilised. Has that helped?
It has stopped things getting worse. Escalation is running around 3 per cent, which is manageable. What has not recovered is the tender market. We used to get five or six builders. We now get two, occasionally three, and one of them will not hold a price past sixty days.
That is a capacity problem, and capacity left the industry after 2022. It is not coming back quickly, because the people who left went to infrastructure and infrastructure is still paying more.
Q.Do you think the current apartment shortage is temporary?
No. The completions we are seeing now reflect decisions made in 2022 and 2023, and those years were the worst for feasibility in a decade. The projects that would be finishing in 2028 are the ones being approved right now, and there are not enough of them.
The thing people underestimate is that the recovery has to over-correct to catch up, and nothing in the current system is capable of over-correcting. So my honest view is that Melbourne apartment values rise faster than houses for the rest of this decade, which is not a prediction I would have made five years ago.
Q.Does that make you optimistic about your own business?
It makes me confident about pricing and pessimistic about volume, which is a bad combination for a city that needs housing. I would rather build more apartments at thinner margins. That is not a noble position — it is simply how a development business grows.