Victoria must regain the confidence of the property industry

17 April, 2024

A recent survey conducted by Procore and the Property Council reveals concerning statistics, indicating that Victoria stands alone among the states with negative expectations for economic growth in the coming year. Furthermore, confidence within the state’s property sector significantly lags behind the national average.

These stark findings paint a grim picture for both renters and prospective homebuyers.

The survey, comprising insights from over 500 property market insiders, highlights Victoria as the only state where industry confidence dwindled between December and March. Additionally, there are serious doubts about the state’s capacity to effectively plan and manage growth, evidenced by Victoria’s lowest-in-the-nation approval rating of -31.6.

Mike Zorba, expatriate chief executive of the Property Council Australia, has lambasted the Allan government for its tax policies, particularly criticizing Treasurer Tim Pallas for advocating tax hikes amidst a crisis in the investment market.

Mr Zorbas took aim at Victoria, arguing that the Allan government’s “outdated tax routine” is driving overseas investors away and ultimately slowing down the new housing sector.

Mr Zorbas said the property industry was in a constant battle with “almost quarterly” tax changes, including increased land and rezoning taxes.

He urged the government to pledge that “there will be no new property taxes nor will existing taxes be tampered with until the next parliament”.

Mr Pallas, however, refused to rule out new or higher taxes.

The Allan government is maintaining its ambitious target of building 80,000 homes a year – a jump of more than 20,000 homes on last year’s figures – as part of its parliamentary manifesto.

The Australian Property Council’s Victorian Executive Director, Cath Evans, said that while the Council is a “strong supporter” of the plan, the Government “urgently needs to accelerate the process”.

“The industry needs a fresh approach and an injection of political confidence, with the Victorian Government’s performance index currently standing at -32 points, down from -24 in the last quarter and miles behind South Australia’s +36,” she said.

As the May budget approaches, it is imperative for policymakers to heed the Property Council’s recommendations seriously. Suggestions such as extending stamp duty exemptions, suspending surcharges for foreign investors temporarily, and establishing special economic zones around priority areas could prove instrumental in revitalizing Victoria’s property sector.

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