Coalition pledges $1.3b land sell-off to tackle debt and housing shortfall

November 6, 2026 — 5:00am

Some $1.3 billion worth of state land would be sold off to developers under a Coalition pledge to pay down debt and unlock land for housing.

Opposition Leader Jess Wilson will unveil on Friday the Coalition’s plan to sell off government-owned land including 775 hectares in Melbourne’s outer-west, a 10-storey CBD office block used by the Office of Public Prosecutions, the former Footscray Hospital and the site of an abandoned explosives factory.

Many of the sites have been earmarked by the government for housing and employment hubs – which now face uncertain futures – but works have rarely progressed beyond feasibility studies or demolition of decrepit infrastructure.

Wilson said this amounted to land banking – the practice of holding undeveloped land over long periods to eventually sell it for a major windfall.

“We’ll divest surplus government land and get new housing projects moving as part of our team’s plan to build more homes and repair the budget,” Wilson said.

“Our plan means more land for new homes and economic development as well as a $1.3 billion saving for the budget.”

The policy has been costed by the independent Parliamentary Budget Office and would also save $266 million in interest repayments over four years, the Coalition says.

Wilson has previously promised a $578 million windfall from selling the state-owned Melbourne Wholesale Fruit and Vegetable Market in Epping if the Coalition forms government after this month’s state election.

Much of the land is zoned for mixed use, and the opposition says its sale would supercharge housing construction. This fits with the Coalition’s broader housing policy, which includes fast-tracking greenfield developments and slashing property taxes.

The policy is in contrast with Labor’s approach, which encourages middle and higher-density housing in established inner and middle-ring suburbs. Although Labor is well behind on its housing targets, Victoria has consistently led the nation in the rate of new home construction.

Australian Bureau of Statistics data shows that 56,243 homes were built in Victoria in the 12 months to June – 140 fewer than in the previous year, and 5058 fewer than the average over the previous decade.

The East Werribee Employment Precinct, which is on Wilson’s list to sell, is the largest parcel of mostly undeveloped state government-owned land in Melbourne. Successive governments have earmarked the 775-hectare former State Research Farm site for housing and commercial development.

The Liberal Baillieu government announced a plan in 2012 to build a western suburbs “CBD” on the site with 20,000 residents and 50,000 jobs. The Andrews Labor government proposed a $31 billion “education city”, with 50-level skyscrapers, before abandoning that idea in 2019.

Last year, the state government appointed Development Victoria as the master developer for 540 hectares of the East Werribee site, in a third attempt to deliver housing, employment and community services.

Development Victoria is currently demolishing the former Footscray Hospital, after the opening of the new hospital earlier this year, and is working on a draft master plan to redevelop it as a mixed-used precinct.

Maribyrnong City Council has called for the hospital redevelopment to include a large public park, and for at least 30 per cent of homes to be social and affordable housing.

The council has also called for one building on the site, the Brutalist heritage-listed Footscray Psychiatric Centre, to be reserved for use by community, arts and not-for-profit organisations, to create a precinct similar to Abbotsford Convent. It also wants the existing community-run Brenbeal Children’s Centre to be expanded.

It is unclear if any of those proposals will eventuate if the site is sold to a private developer.

The Coalition would also sell a 10-storey office block at 565 Lonsdale Street in the CBD which houses the Office of Public Prosecutions.

The Ballarat Saleyards site covers 13.6 hectares and has been earmarked for a commercial precinct and housing. Demolition and remediation work started in October last year and was expected to take 12 months to complete.

The government was planning to turn the area into an employment precinct with long-term future housing opportunities.

A voluntary Cultural Heritage Management Plan has been approved by the Wadawurrung Traditional Owners Aboriginal Corporation, which assesses the potential impact of significant development on Aboriginal cultural heritage at the site.

The Coalition is also planning to sell off the former Coburg North TAFE site, which Development Victoria previously earmarked as surplus land. There is community support for the area to be rezoned from industrial land to mixed-use land, but opinions vary as to whether it should be developed for housing or other uses.

At the former site of the Albion Explosives Factory in Cairnlea, Development Victoria is planning to develop 500 homes, including some affordable housing, with land restoration work under way. But construction is not slated to begin until as late as 2028, and final designs for the area have not been completed.

Read more on the Victorian election:

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• See how your neighbours voted in 2022: And what it means for this election
• Chip Le Grand: This is why the airport rail is a mess
• Debt: Economists on how to put Victoria back on track

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