Is Melbourne's housing market approaching a bubble? With so much public commentary supporting and disputing the concept of a housing "bubble" you could be forgiven for swinging regularly between hysteria and hope as this debate rages.

The facts say no. Rather, as research undertaken by the Urban Development Institute and its research partner Charter Keck Cramer shows, average land prices have not risen significantly in recent years, and have come nowhere near the boom-time highs of 2010. Melbourne's $210,000 median lot price is low compared with the median lot price in Perth ($260,000), south-east Queensland ($250,000) and Metro Sydney ($395,000). Coupled with the largest share of national sales, Melbourne can claim to have the largest affordable new house and land market in the nation.

It is important to consider the piece of the story that is being quite clearly ignored about the reality of this great city. People want to live in Melbourne.

Australians from other parts of the country are flocking to live in Melbourne, and Melbourne is an investment hot spot reinforcing that it really is a diverse, international and multicultural city. Most recent ABS statistics have shown a surge in population growth in Melbourne, predominantly due to interstate migration. In the 12 months to December, Victoria grew by 101,500 people, 95,000 of them choosing to call greater Melbourne home.

The Board of the Reserve Bank of Australia recently noted that whilst housing-price growth in cities and regional areas had declined over recent months, they considered the strength and composition of underlying supply and demand conditions to be vital to the state of different parts of the housing market. They also observed that there was a relatively low stock of dwellings for sale in Melbourne and that dwellings took only a short time to sell.

The media is telling one story, while the data and the most trusted experts are telling us another.

Demand for housing in greater Melbourne is strong, underpinned by positive and solid population growth. Research undertaken by the Urban Development Institute and BIS Shrapnel shows that in among the buyer activity, a significant proportion of demand is being driven by a renewed appetite amongst first home buyers. Compared with the previous year, loans to first home buyers in February to March 2015 has grown by more than 20 per cent. Investor demand also remains a key driver for the Victorian market, with the value of loans to investors in the March 2015 quarter up by 21 per cent from the previous year. This contributes to the supply of rental stock and assists in moderating rental values.

The foundations of the housing market in greater Melbourne are strong but it is in danger of losing the attention of those who pull the puppet's strings.

Since coming to office in November 2014, the Andrews government has not yet approved one Precinct Structure Plan within Melbourne's growth corridors. Precinct Structure Plans are master plans for whole communities. They lay out roads, shopping centres, schools, parks, housing, employment the connections to transport and generally resolve the complex issues of biodiversity, cultural heritage, infrastructure provision and council charges.

Planning Minister Richard Wynne has halted plans already progressing through the planning system, some of which are two years into the process, and effectively sent them back to the beginning. The Urban Development Institute estimates that there are about 110,000 lots, equivalent to just over seven years of land supply, wrapped up in the system. Equally as concerning has been the limited amount of central city permits approved in 2015.

This reality is most evident in Melbourne's land market. In recent weeks we have seen hopeful home buyers camping out for days and entering a competitive ballot to gain access to the Woodlea development in Rockbank on Melbourne's fringe. Land supply is simply not keeping up with underlying demand and this be addressed urgently by the Victorian government.

The foundations of Melbourne's housing market are a unique asset that all Victorians benefit from through the value of its contribution to our economic wellbeing. If not for a buoyant housing sector Victoria would be in a far worse economic position. This strength must not be squandered nor taken for granted. Rather than giving in to hysteria, the housing market in Melbourne continues to respond to genuine need and will underpin our economy for years to come. It is the Victorian government's responsibility to ensure that an adequate supply of housing maintains affordability.

Danni Addison is chief executive of Urban Development Institute of Australia (Victoria), a property development industry body.

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