The Friday Intelligence Briefing
Plain · Sourced · Every FridaySince 22 October, eligible proposals of up to four homes on one lot can go through VicSmart, which has a 10-business-day timeframe for a decision. A week earlier, small second homes of up to 80 sqm stopped needing a planning permit in most cases.
By BuilderHQ, Melbourne
Cost optimisation is a new report from our estimating team. It starts from the drawings and the price, and shows where the cost sits. It then sets out the options that could bring the project back to budget, each with its saving and trade-off.
This week from the BuilderHQ team
Victoria has made two planning changes in eight days, and both apply to ordinary residential blocks. Together they make it easier to add homes to a block that already has one: a small second home in the backyard, or up to four homes on the lot. Each comes with conditions, set out in Market Watch.
The market around those changes is softer. Construction costs rose again in the September quarter, new home sales fell in all five states in HIA's survey, and more buyers are cancelling contracts.
Building ministers have also agreed to modernise the National Construction Code. Nothing changes on site yet, and the Explainer sets out what was agreed.
This week we also have two corrections, and a new report on BuilderHQ for projects that come in over budget.
The BuilderHQ Team
Three signals this week.
01 · Planning
Amendment VC319 came into operation on Thursday 22 October. It opens VicSmart, Victoria's fast-track planning pathway, to proposals of up to four homes on one lot in residential zones. Any existing home on the lot counts towards the four. We reported the announcement in Issue 010.
To qualify, a proposal must meet 13 siting and amenity standards in clause 55, the Townhouse and Low-Rise Code. Zone requirements still apply, including maximum building height and minimum garden area. An overlay that needs its own permit, such as a Heritage Overlay, takes a proposal out of VicSmart, and the pathway does not apply in the Low Density Residential Zone.
VicSmart is not automatic approval. Council still decides each application, and a design that misses a standard goes through the normal permit process. VicSmart applications are not advertised, and neighbours cannot seek a review at VCAT.
What this means for you
Planning three or four homes on your block? Check the zone, the overlays and the 13 standards before you pay for a full design.
Design to the 13 standards from the first sketch. A proposal that misses one leaves VicSmart for the normal permit process.
Source: Victorian Government, Amendment VC319, in operation 22 October 2026 · Planning Victoria, Four homes on a lot, 2 September 2026.
02 · Second homes
Drawn to scale by area.
| Series | Floor area |
|---|---|
| Before | 60 sqm |
| Now | 80 sqm |
| Planning permit | Not needed in most cases |
| Building permit | Still required |
| Small lots and some overlays | Planning permit still needed |
Amendment VC306 came into operation on 15 October. It lifted the size limit for a small second home that can be built on the same lot without a planning permit. Floor area is measured to the outside of the external walls, and attached decks, verandahs and pergolas are not counted.
A planning permit is still needed on lots under 300 sqm, and on land in the flood overlays, the Erosion Management Overlay or the Bushfire Management Overlay. The Building Regulations still refer to 60 sqm, so confirm a design between 60 and 80 sqm with your building surveyor before you commit.
What this means for you
An extra 20 sqm can make a second home work for family or as a long-term rental.
Price site access and the service connections early. On a backyard site they can decide whether the job works.
Source: Victorian Government, Amendment VC306, in operation 15 October 2026 · Planning Victoria, Small second dwellings · Building Regulations 2018 (Vic), as at 1 September 2026.
03 · The market
Two separate datasets. Cotality measures the cost of building. HIA's survey covers large volume builders in the five largest states, not every new home sold.
Cotality's Cordell Construction Cost Index rose 1.0% in the September quarter, the second quarterly rise of that size in a row, led by plastics with smaller rises in plasterboard. Victoria's quarterly rise of 0.9% was the lowest of the states Cotality reported, level with South Australia.
In HIA's survey, sales fell in all five states in the September quarter. They rose 3.4% in September itself, which HIA said "should not be mistaken for a turning point". HIA links the higher cancellation rate to interest rate rises, when buyers with conditional finance lose it.
What this means for you
Check a client's finance before you sign, confirm supply prices before you quote, and keep quote validity short while costs rise.
Cancellations rise when conditional finance falls through. Recheck serviceability before a client signs a build contract.
Source: Cotality, Cordell Construction Cost Index, 21 October 2026 · Housing Industry Association, New home sales slump, 16 October 2026.
Every project has two numbers: what the client wants to spend, and what the design will cost. A BuilderHQ estimate finds the gap between them early. A cost optimisation then shows the ways to close it, before the project goes to tender.
From drawings to tender
Drawings
Plans and elevations, the budget, and what cannot change.
Estimate
Prepared by our team
Low, Most Likely and High totals, with every trade priced.
Optimisation
Prepared by our team
Every option with its saving, and what we recommend.
Tender
Builders price the design the client has chosen.
A worked example
Our example is three townhouses at 42 Ashcombe Street, Reservoir, estimated over the owner's budget. Choose a step to see how the recommended changes add up.
From BuilderHQ's sample cost optimisation. Figures include GST. The savings are the sample's own ranges: they may not all be achievable together, and are not a typical or guaranteed result. The bar starts at zero and is drawn to the middle of each range.
Inside the reports
Sample report · 17 pages
Sample report · 17 pages
People on our estimating team prepare both reports from the drawings. An optimisation also needs the current price, the target budget and what cannot change. Design practices and builders can request one on BuilderHQ.
Neither report is a quote or a tender, and builders' prices will vary, for the reasons we set out in Issue 011. An optimisation does not redesign the project: the client and the design team decide what changes.
What this means for you
If the estimate comes in over your budget, ask your architect or builder for a cost optimisation before the design is final.
Go through the options with your client at design stage. The client decides what changes, and the design stays yours.
When a client's budget sits under your price, an optimisation sets out the options, each with its saving and trade-off.
Source: BuilderHQ sample cost estimate BHQ-EX-2026, September 2026, and sample cost optimisation BHQ-EX-2026-CO, October 2026.
Housing, planning and building ministers met on 16 October and agreed reform directions for the code, which sets minimum standards for building work across Australia. The Australian Building Codes Board will begin preliminary work.
Nothing yet.
The communiqué sets no dates and changes no requirements. A year earlier, ministers agreed to make no further residential changes to the code until mid-2029, other than essential quality and safety measures.
Source: Australian Government, Joint Ministerial Meeting on Housing Supply and Affordability, communiqué, 16 October 2026 · Building Ministers' Meeting, communiqué, 22 October 2025.
| Fixture | Minimum rating |
|---|---|
| Bathroom basin taps6 stars in other buildings | 5 stars |
| Kitchen sink and laundry trough taps | 4 stars |
| Showerheads | 4 stars |
| ToiletsThe cistern or flushing valve | 4 stars |
The Plumbing Amendment Regulations 2026 take effect on 1 March 2027. From then, any of these fixtures a plumber installs must meet its minimum rating under the national Water Efficiency Labelling and Standards (WELS) scheme. The Government says the rules apply to regulated plumbing work over $750 in new and existing buildings, the same threshold that triggers a compliance certificate.
Existing fixtures that are not being replaced do not need upgrading. Some existing buildings cannot take the new ratings because of the age or design of the water service. There, a fixture must still be rated at least 3 stars, or higher where a higher rating would work.
What this means for you
Check the fixture schedule on every job that will reach fit-off after 1 March 2027, and order to the new ratings.
Source: Victorian Government, Plumbing Amendment Regulations 2026 (S.R. No. 153/2026), made 13 October 2026 · Engage Victoria, Updating water fixture efficiency standards.
Election commitments, not current law
| Labor | Liberals and Nationals | |
|---|---|---|
| Land tax-free threshold | LaborRestore it to $300,000 over six years, starting with a $25,000 rise in 2027-28 | Liberals and NationalsRestore it to $300,000 progressively over five years |
| First home buyers | LaborBuild 25,600 homes with the Commonwealth, reserved for first home buyers and sold at market prices | Liberals and NationalsAbolish stamp duty for first home buyers on homes up to $1 million |
The land tax-free threshold is $50,000 today, and the 2023 changes that lowered it are legislated to apply until 30 June 2033. Separately, the Government says it is changing its Absentee Owner Surcharge guidelines so residential developments can be exempt for up to two years after construction, with no start date given. The election is on Saturday 28 November.
Source: Victorian Labor, 4, 14 and 21 October 2026 · Liberal Party of Victoria, 8 May and 1 September 2026 · Victorian Government, 14 October 2026 · State Revenue Office Victoria.
The cash rate is 4.60%. Minutes of the Board's September meeting say "several of the upside risks identified in August had since materialised or were building". They add that the Board could raise the cash rate "further if required". The next decision is due at 2.30pm on Tuesday 3 November, Melbourne Cup Day. Victoria's caretaker period, when the Government avoids major decisions before the election, is due to begin at 6pm the same day.
Since 19 October, some building application processes with the Building and Plumbing Commission are online only, through the BPC Portal, and manual payments are no longer accepted for them. Check the portal before your next lodgement.
Issue 013, ATO credit cards. We wrote that the ATO would stop accepting credit card payments directly after 30 November. On 9 October, the day Issue 013 was published, the government announced the ATO will keep accepting credit cards until 30 June 2027.
Issue 011, new home sales. The 27% fall in Victoria, and the other state figures in Issue 011, covered the three months to August, not August alone. The national 10% fall was for August, and national sales fell 19.3% over the three months.
This edition used data and reporting from the Victorian Government, Cotality, the Housing Industry Association, the Australian Government, the Reserve Bank of Australia, the Building and Plumbing Commission, the Parliament of Victoria, the State Revenue Office Victoria, Victorian Labor, the Liberal Party of Victoria and The Nationals Victoria. The Build Brief is compiled by BuilderHQ, Melbourne.
Reply with your question. The topics readers ask about most shape where we take future editions.
Reply to the teamVicSmart is now open to up to four homes on a lot, and most small second homes up to 80 sqm no longer need a planning permit. Plus costs and sales, the building code, plumbing standards and the election. This week's Build Brief.
The Build Brief is compiled by BuilderHQ, Melbourne. Read past editions at builderhq.com.au/build-brief.
