Government building to be demolished for 500 new homes in $2m+ hotspot

The former government building site could make way for hundreds of new homes in a rezoning of one of Melbourne’s most affluent suburbs. 

The former VicRoads headquarters, now rezoned for residential and commercial use, could deliver up to 500 new homes in Kew.  

Kew, a suburb with a median house price of $2.6 million, is one of Melbourne’s most sought-after suburbs, with its proximity to the city, well established amenities and its placement within desirable school zones. 

Both the Victorian Government and Development Victoria have said 10% of the homes delivered at the site must be affordable. They have not given any indication of the expected market for the remaining 90%.

The VicRoads site served as its headquarters in Kew for over 60 years before officially closing in 2024, with staff moving to other locations. A feasibility study into its potential sale was commissioned in 2010.

Now that it has been rezoned, the site is expected to feature mid-rise apartment buildings.  

This initiative is part of a broader effort to unlock surplus government land across the state.

Positioned near the Kew Junction, the site has the potential to provide homes in a newly designated ‘train and tram zone’ activity centre, part of the government’s aim to build higher residential buildings near some of Melbourne’s busiest public transport corridors.  

Victorian minister for housing and building Harriet Shing said the opportunity to reuse government land is one way to increase housing supply.  

“This iconic office building at the heart of the new train and tram zone in Kew Junction can now be put to really good use – giving more people in the inner east the homes that they need,” she said.  

Development Victoria is delivering the masterplan for the site and has begun investigating possible ways to repurpose the mid-century office building located at the site’s southern end.  

The government agency previously invited community feedback to help shape the future of the site during March and April 2025.  

Feedback was gathered through a Community Aspirations Report, which will help guide the direction of the site and form a part of the developer tender process. 

Development Victoria also invited developers to express interest in delivering new homes on the site as part of plans to fast-track development. 

Expressions of interest applications closed in mid-May. Shortlisted developers will soon be invited to submit detailed proposals, with successful partners to be announced later in 2025.  

“The building has a layout and structure potentially suitable for repurposing into homes and mixed-use spaces,” Development Victoria acting CEO Niall Cunningham said. 

Early works on the site is expected to start in 2026.   

Are you interested in buying and building new? Check out our New Homes section. 

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