Victoria will continue to fall short on housing and struggle to attract investment after a State Budget that fails to deliver meaningful housing reform, the property industry has warned.
While the extension of off-the-plan stamp duty concessions is a step in the right direction, the Property Council says the six-month measure falls well short of the reform needed to boost housing supply, and restore investor confidence.
Victoria still carries the heaviest property tax burden in the nation.
Almost half of the State Government’s total taxation revenue now derives from property taxes, a burden that its hurting investment and housing affordability.
This is significantly up from 18% from a decade ago.
As well as this, rising construction costs, policy uncertainty and global economic volatility continue to hold back housing delivery.
Property Council Victorian executive director Cath Evans said the Budget demonstrates a lack of commitment to growth in supply.
“To deliver the state government’s own goal of 80,000 homes a year, Victoria needs the property industry firing on all cylinders," said Evans.
"This Budget does not go far enough to achieve that.
“However, we welcome the extension of off-the-plan stamp duty concessions, which will provide support for some buyers and projects and help stimulate parts of the apartment market.
“But housing commencements are flatlining, supply remains constrained, and at the same time, international investment has declined sharply, falling by more than 50 per cent cent over the past three years.
“The facts are clear: to deliver the homes or infrastructure at the scale needed for a fast-growing population, we need a new approach."
Evans explains why Victoria has been effected.
“Victoria has a property taxation regime that bewilders and confuses investors," Evans said.
"It means projects do not proceed, housing supply is constrained, and investment flows to other states with more competitive settings.
“Instead of making development more expensive, the focus should be on reducing barriers to building more homes.”
Evans said the burden was being felt by all Victorians, not just industry.
“With Victoria experiencing strong population growth, we need to redouble our efforts to examine our tax settings, cut the red tape and solve the post-permit bottlenecks that just delay and add cost to new homes," said Evans.
“We will continue to call for major tax reform with the next Victorian Government to ensure property remains central to economic growth, job creation and housing delivery.”
