National property market analysts and buyers’ 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 “criminals”, and a “procession of poor policies”, including hefty taxes, had targeted investors in recent years.
He said poor financial management had also seen the Victorian Government accrue an “alarming” level of debt, with a daily interest bill of $32 million for Victorian taxpayers.
“This has led to the recent introduction of a suite of new taxes and Propertyology having a complete lack of confidence in the government’s skillset and financial capacity to support the state’s economy for years to come,” Mr Pressley said.
“Victoria 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 it’s been on steroids coming out of Victoria.
“It’s one new piece of legislation after another, primarily targeted at investors, whether they’re a suite of new taxes they’ve introduced or the longest laundry list of onerous rental legislation, which dilutes the fundamental controls of asset owners.”
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.
“It gives us no joy to say we’ve put a complete boycott on an entire state,” Mr Pressley said.
“But I can’t, in good conscience, say to anyone who’s got an amount of money to invest, that there’s a location in Victoria that has superior credentials to all the other parts of Australia.”
Other elements affecting Propertyology’s decision include Victoria having the nation’s 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.
“The decisions that have already been made, fill us with no confidence at all about what’s just around the corner,” Mr Pressley said.
“They continually talk about the likelihood of putting a freeze on rents and there’s going to be more taxes that come out of that State Government because of that bulging debt.”
Mr Pressley said Victoria’s 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 state’s below average employment, population decline, insufficient government contribution to rental supply and inferior rental yields compared to other states.
“The Victorian government has dug themselves into a very deep hole of debt which will take a decade or more to dig out of,” Mr Pressley said.
“Their vicious attitude towards anyone with financial aspiration will significantly restrict the state’s 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.
“Personally, I love Melbourne as a city and have just as much affection for various parts of regional Victoria.
“Over the years, Propertyology has invested in multiple Victorian locations and had always imagined we would continuously do so.
“But there is a significant segment of society who, despite their strong core values and goal-setting aspirations, the State Government treats like criminals.”
“They leave us with no choice other than to focus 100 per cent of our attention on the other 80 percent of Australia.”
Over many years, Propertyology has invested in six different states, supplying rental accommodation for 23 individual cities/towns, making it Australia’s most experienced property investment firm.
“Australia 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,” Mr Pressley said.
Propertyology has already initiated communication with its clients who’ve previously invested in Victoria.
“We’ll help each client work through the pros and cons in regard to holding, selling or investing elsewhere in Australia,” Mr Pressley said.
Mr Pressley said Propertyology had chosen to publicly announce its decision because it wanted Victoria’s 6.7 million residents to understand the consequences of the situation created by the state government.
“The same applies to the existing 2.3 million property investors all over Australia,” he said.
Elite Agent has contacted the Victorian Government but is yet to receive a reply.
More to come …