National property market analysts and buyersโ agency, Propertyology, will boycott investing in Victorian real estate until the State Government improves its attitude towards investors, policies, government finances and economic management.
Propertyology Head of Research Simon Pressley said the Victorian Government continually treated hardworking investors, the large majority of which earn about $100,000 annually, like โcriminalsโ, and a โprocession of poor policiesโ, including hefty taxes, had targeted investors in recent years.
He said poor financial management had also seen the Victorian Government accrue an โalarmingโ level of debt, with a daily interest bill of $32 million for Victorian taxpayers.
โThis has led to the recent introduction of a suite of new taxes and Propertyology having a complete lack of confidence in the governmentโs skillset and financial capacity to support the stateโs economy for years to come,โ Mr Pressley said.
โVictoria is one of several states that Propertyology has been increasingly concerned about, with various policies that the state governments have made for quite some time, but itโs been on steroids coming out of Victoria.
โItโs one new piece of legislation after another, primarily targeted at investors, whether theyโre a suite of new taxes theyโve introduced or the longest laundry list of onerous rental legislation, which dilutes the fundamental controls of asset owners.โ
Mr Pressley said the policies and legislation included the recently announced land tax, which, from January 1, will see almost every owner of a Victorian investment property hit with an annual fee of $975 per property for those with land valued between $100,000 and $300,000.
From mid next year, vacant land and properties throughout Victoria, which have been unoccupied for six months or more, will be taxed at a rate of one per cent of the property value.
Victorian property owners who supply short-stay accommodation for the important holiday and corporate market will also soon lose 7.5 per cent of their hard-earned income.
โIt gives us no joy to say weโve put a complete boycott on an entire state,โ Mr Pressley said.
โBut I canโt, in good conscience, say to anyone whoโs got an amount of money to invest, that thereโs a location in Victoria that has superior credentials to all the other parts of Australia.โ
Other elements affecting Propertyologyโs decision include Victoria having the nationโs second highest stamp duty expense and its onerous rental laws, including removal of free-market conditions by placing a ban on rent bidding, rent increases capped to once per year, landlord compliance costs, one-sided notice periods and controls when a landlord lists a property for sale, and more.
โThe decisions that have already been made, fill us with no confidence at all about what’s just around the corner,โ Mr Pressley said.
โThey continually talk about the likelihood of putting a freeze on rents and thereโs going to be more taxes that come out of that State Government because of that bulging debt.โ
Mr Pressley said Victoriaโs debt was projected to hit $239 billion in 2026 and the state also had the second worst economic outlook in the nation behind only the Northern Territory.
Propertyology also has concerns about the stateโs below average employment, population decline, insufficient government contribution to rental supply and inferior rental yields compared to other states.
โThe Victorian government has dug themselves into a very deep hole of debt which will take a decade or more to dig out of,โ Mr Pressley said.
โTheir vicious attitude towards anyone with financial aspiration will significantly restrict the stateโs ability to fund future infrastructure needs, to attract investment for job creation, supply sufficient volumes of housing and to retain all of its existing population, let alone attract people from other other states.
โPersonally, I love Melbourne as a city and have just as much affection for various parts of regional Victoria.
โOver the years, Propertyology has invested in multiple Victorian locations and had always imagined we would continuously do so.
โBut there is a significant segment of society who, despite their strong core values and goal-setting aspirations, the State Government treats like criminals.โ
โThey leave us with no choice other than to focus 100 per cent of our attention on the other 80 percent of Australia.โ
Over many years, Propertyology has invested in six different states, supplying rental accommodation for 23 individual cities/towns, making it Australiaโs most experienced property investment firm.
โAustralia has experienced all sorts of adversity throughout the long history of our business, but nothing has ever caused us to totally avoid an entire state,โ Mr Pressley said.
Propertyology has already initiated communication with its clients whoโve previously invested in Victoria.
โWeโll help each client work through the pros and cons in regard to holding, selling or investing elsewhere in Australia,โ Mr Pressley said.
Mr Pressley said Propertyology had chosen to publicly announce its decision because it wanted Victoriaโs 6.7 million residents to understand the consequences of the situation created by the state government.
โThe same applies to the existing 2.3 million property investors all over Australia,โ he said.
Elite Agent has contacted the Victorian Government but is yet to receive a reply.
More to come …