Housing too expensive: Vic treasurer

Too many Victorians are finding it difficult to get into the housing market, Treasurer Tim Pallas says.

After handing down his first budget, Mr Pallas said housing affordability will be something he looks to address in the future.

"We do need to recognise that housing affordability is getting away from many average Victorians," he told reporters on Wednesday.

Mr Pallas said people deserve the opportunity to get into the housing market.

"If we want to make sure the Australian dream remains alive, if we're serious about helping our kids get into accommodation, we want them to live closer to us, it means a root and branch analysis of the money that we're spending, the planning systems and approval processes that we've got in place," he said.

"And it means being prepared to make some hard decisions along the way."

Mr Pallas said low interest rates are helping some people into the housing market, but they need to be aware of their capacity to pay once interest rates inevitably rise.