Investors say Victoria is becoming less attractive for landlords, as the state's "temporary" COVID levy bites into profits. The levy increased land tax rates and thresholds and will remain in place until 2033. But while there are concerns the tax is affecting rental supply, softening property prices in Victoria could be making it easier for first home buyers to get a foothold.
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00:00 A full house today at this auction in Glen Waverley in Melbourne's east.
00:07 The competition was fierce.
00:12 And after 45 minutes of intense bidding from seven competitors,
00:18 one lucky couple became first homeowners, buying at their very first auction.
00:25 While supply is still limited, softening house prices are giving more Victorians a chance
00:30 to own their first home.
00:32 But renters still have few options.
00:34 We always have investors coming to the area, but actually in the last six months we really
00:39 didn't meet any investors.
00:41 What I've seen in the last year or so is a lot of people shying away from investing in
00:46 Victoria.
00:47 Investors blame a Victorian government levy introduced last year, which slugged landlords
00:52 with increased land tax to pay off the state's COVID debts.
00:57 It's having a horrendous effect on investor sentiment and their willingness to stay in
01:01 the market.
01:02 It does beg the question why that particular sector of investors have been targeted.
01:07 Lending for investment property purchases across Victoria was about $2.2 billion in
01:13 the month of April.
01:15 But the growth in that investment lending across the state is clearly slower than what
01:19 we're seeing nationally.
01:21 The state government insists Victoria remains attractive to investors and the increased
01:26 land tax has had little impact on rents.
01:29 The Housing Minister says landlords need to pay their share.
01:32 The sorts of taxes and frameworks that operate do not apply to people in rental situations.
01:38 They are about making sure that when people are seeing a return on their investment as
01:42 landlords they are in fact making sure they're making a contribution.
01:46 My heart today is with those vulnerable Victorians who can't afford to purchase a home and who
01:52 are looking to rent a home and can't because of the prices impact because of the state
01:57 government taxes.
01:58 There's no easy answers when it comes to securing one of life's most basic necessities.
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