MEDIA RELEASE
The Real Estate Institute of Victoria (REIV) has highlighted the lack of meaningful property sector reform in the 2025-26 Victorian State Budget (Budget), amid concerning new data reflecting diminishing investor confidence and the Victorian government reportedly forecast to generate $18.2 billion from property taxes this financial year.
While welcoming positive budgetary provisions – including the 12-month extension of eligible off-the-plan stamp duty concessions and $24 million investment in ‘Train and Tram Zone’ Activity Centres – the peak body said the budget, as a whole, does not go far enough in seeking to attract and retain investment in Victoria’s property market. Jacob Caine, REIV President, noted that the organisation’s Budget submission, which reflected important feedback from REIV members, was headlined by renewed calls to ease stamp duty and land tax obligations in order to boost investment and housing supply.
“Our submission highlighted the need to ensure a more balanced tax and regulatory regime that includes sufficient incentives for rental providers. A central recommendation being reforms, such as progressive land tax concessions, aimed at enhancing the state’s long-term rental market,” Mr Caine said.
The REIV’s response to the Budget comes as waning investor confidence and related rental market tightening is reflected in the following new data points from the Homes Victoria Rental Report (December Quarter 2024):
the number of new rental lettings, a key indicator of rental housing availability, declined statewide by 1.8 per cent – with a 1.3 and 4.1 per cent drop in metropolitan Melbourne and regional Victoria respectively – in the December quarter compared to the December quarter 2023; and
despite averaging a 1 per cent annual increase over the past five years, the total number of active rental bonds held by the Residential Tenancies Bond Authority fell by 3.6 per cent in the December quarter compared to the same period in 2023.
Commenting on the data, Mr Caine said, “These declines should sound alarm bells, as they reflect a tightening rental market and reduced property investment, just when we need more rental housing, not less.
“With investor confidence fading, maintaining the budgetary status quo risks further constraining housing supply and worsening affordability issues.
“Whereas, if the Victorian Government is serious about realising its Victoria’s Housing Statement objective of building 800,000 new homes by 2034 and turning the housing crisis around, we need substantive property sector policies and initiatives that attract investors.”
The REIV will continue to engage constructively with the Victorian Government in advocating, for property sector settings that meet the needs of both investors and the growing number of Victorian renters seeking stable and affordable housing.
Media Contact: media@reiv.com.au - 03 9205 6607