Will construction of more homes reduce dwelling prices and solve affordability issues?

For some experts, opposition leader Matthew Guy’s plan to boost Victoria’s housing market by releasing nearly 300,000 plots of land in Melbourne's fringe areas will not necessarily translate to lower prices.

In a report for ABC News, Jago Dodson, Director of the Centre for Urban Research at RMIT University, cast doubt on the effectiveness of such move, saying that flooding the state with more lots would unlikely result in price reductions.

"Landholders and developers tend to drip feed into the market rather than collapse prices," he said.

University of Tasmania planning professor Jason Byrne agreed, and said introducing additional low-cost housing will result in raised prices in other fringe areas.

"If people still can't afford to live on the outskirts of a city, spend a lot of their income in commuting, don't have access to jobs nearby, we might just eventually see a transfer of cost to the individual," he told ABC News.

Meanwhile, Australian National University's Ben Phillips said while increasing housing supply has its benefits, it was "unlikely in isolation to create affordable housing in Australia."

"Even though you're increasing land supply, you're really only doing it at the edges. Having a small increase in land supply over a number of years may only be a very small increase to what was already planned anyway. So the impact, whilst it might sound impressive, is probably only fairly limited," he said.

ABC News also reached out to University of Sydney urban planning professor Peter Phibbs, who said that while cheap housing might help buyers into a new home, living in the outskirts of a city can have other impacts on their well-being.

"There's a lot of research that shows those long commutes ... are pretty bad for your physical and your mental wellbeing, particularly over the longer term," he said.

In a previous report, Housing Industry Association (HIA) Victoria executive director Fiona Nield said a lack of supply of new land has been a major constraint to housing stock that is affordable for new home buyers. She called Guy's proposal as a positive development, given that increases the supply of land for new homes.

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