A lack of local knowledge within council planning departments is holding up development and impacting success rates, according to local builders and developers.
No fast-tracking mechanisms for permits within precinct structure plan (PSP) areas was another concern raised for West Gippsland.
These were discussion points raised by representatives of Parklea Developments and GJ Gardner Homes Warragul at a Parliamentary Inquiry into housing supply in regional Victoria.
They acknowledged difficulties local councils had in keeping planning staff but raised concerns of a black and white approach to planning from graduates or those unfamiliar with the area.
GJ Gardner Homes general manager Travis Pennicard told how local or common sense was not always being applied, noting "locals are closer to it, they understand the issues."
He provided an example of a planner who lived in Warrnambool dealing with a Warragul planning application.
"How can they have an understanding of the broader situation and the challenges faced when they live in a completely different part of the state?" he asked. "It's like me building a house in Ballarat. They don't have the local knowledge."
Parklea Developments project manager Luke Van Lambaart said signs of life were starting to show in the local building industry after a COVID hangover.
Mr Van Lambaart believed 60 to 70 per cent of clients were Gippslanders building in Gippsland, with the remainder moving to the region for lifestyle.
Big houses on small blocks were the most common request.
However, a glimpse of families or individuals coming together to build was beginning to emerge. An example was two widowed women in their 70s who recently pooled money to build.
Mr Pennicard believed retiring Gippslanders were downsizing but often still wanted space for extended family to visit.
"You still want an asset that you can sell at the end of the day," he said.
One Gippsland chair Nathan Hersey said Baw Baw Shire's rapid growth was being viewed as a learning tool for the rest of Gippsland.
"Look at Baw Baw to see what's gone wrong and how we can avoid that," Mr Hersey urged.
He said councils required support in providing wraparound infrastructure for residential growth "to be able to make sure it is liveable and sustainable and not causing an unnecessary financial burden".
With the State Government setting new housing goals for Gippsland councils, Caravan and Residential Parks Victoria general manager Rod Hearn told of strong demand for residential living.
Mr Hearn said residential parks often catered for the 60 to 74-year-old demographic, who were predominately single women.
"That age bracket is expected to grow in the next 20 to 25 years," he said.
He said manufacturing these houses were not an issue but land constraints and regulatory processes were halting expansion.
Mr Hearn said each council interpreted guidelines in different ways, significantly impacting new developments.