Victoria’s property market faces challenges amid high taxes

Date:

Share post:


Victoria’s once-booming property market is now struggling to keep pace with the rest of Australia, according to a leading economist.

Ray White Group Chief Economist Nerida Conisbee said Victoria’s complex and heavy property tax structure has led to a significant downturn in the state’s real estate sector.

“Both Melbourne and regional Victoria now hold the dubious honour of being the slowest property markets in Australia,” Ms Conisbee said.

“The vibrancy that once defined Victoria’s real estate sector has dimmed.”

Ms Conisbee said that Victoria now bears the unenviable title of having the highest property taxes in Australia, including land tax, stamp duty, council rates, and additional levies for foreign buyers and vacant properties.

“Come January 1, 2025, property owners will face yet another financial hurdle: AirBnb levies,” she said.

“While not strictly a property tax, this additional burden is expected to hit hard, especially in regional Victoria where short-term rentals are a significant part of the local economy.”

The consequences of this high-tax environment are far-reaching, according to Ms Conisbee.

“The backbone of the rental market – individual investors – are shying away and limiting the number of rental properties,” she said.

“With investor confidence at an all-time low, new developments, particularly apartment developments, are grinding to a halt.”

unnamed 18

Ms Conisbee said that foreign investment, which previously fuelled Melbourne CBD’s residential boom, has all but disappeared.

“These investors, crucial in creating affordable rental accommodation for students, have now all but disappeared, deterred by higher taxes,” she said.

The commercial sector is also feeling the impact, with investors shying away from Victoria due to taxes targeting foreign buyers.

Ms Conisbee said that the property market’s health often serves as a barometer for the broader economy.

“With Victoria’s real estate sector in the doldrums, there are legitimate concerns about the knock-on effects on employment, economic growth, and housing affordability,” she said.

Looking ahead, Ms Conisbee suggested that Victoria’s ability to reclaim its position as Australia’s property powerhouse may depend on finding a balance between necessary taxation and creating an environment that encourages investment and growth.

“Without a significant shift in policy or market conditions, Victoria’s property market may continue to lag behind its interstate counterparts, potentially reshaping the state’s economic landscape for years to come,” she said.

unnamed 19



Source link

Nicole Lambert
Nicole Lambert
Nicole Lamber is a news writer for LinkDaddy News. She writes about arts, entertainment, lifestyle, and home news. Nicole has been a journalist for years and loves to write about what's going on in the world.

Recent posts

Related articles

Andrew Chamberlain: running a high performing family business

Podcast: Play in new window | Download (Duration: 25:08 — 35.8MB) | EmbedSubscribe: Apple Podcasts | Spotify...

Sir Robert Menzies’ historic Melbourne residence up for sale at $9 million

Located at 8-10 Howard Street, Kew, the grand five-bedroom, three-bathroom residence sits on 1,874 square metres in...

Should you ever negotiate your commission as a real estate agent?

“Want to win every commission conversation?” That’s the question real estate coach Cameron Ure tackles as he...

US real estate giant makes $2.7b bid for Domain

CoStar, the $50 billion Nasdaq-listed company, has already secured a 17 per cent stake in Domain, purchasing...

Agents warned about social media rental scams

The Real Estate Institute of Victoria (REIV) has identified a concerning trend where scammers are copying legitimate...

Dubai’s rapid growth brings housing strains

The city-state, known for its luxury skyscrapers and tax-free living, has seen record-breaking real estate transactions, with...

Paolo Boni joins Place Redcliffe Peninsula

The Announcement: Record-breaking agent Paolo Boni has joined forces with Place Redcliffe Peninsula, reuniting with Principal Jess Culling...

Ken Baker joins PRD as Business Development Manager

The Announcement: PRD Real Estate has appointed experienced real estate professional Ken Baker as Business Development Manager to...