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Boycott On Victorian Investments

Boycott On Victorian Investments
October 17, 2023 Propertyology Head of Research and REIA Hall of Famer, Simon Pressley

Australia’s premier property market analysts and national buyer’s agency firm has made an (unprecdented) decision to completely avoid investing in all Victorian locations until such time as there is significant improvement in state the government’s attitude, policies, government finances and economic management.

This decision should be a cautionary lesson for every government in Australia of the consequences of inflicting pain on private sector financial aspirants.

“The production of jobs, infrastructure and the supply of housing will always depend most on the private sector. Any government that stands by policies which fail to support the private sector is a government that is accepting of their jurisdiction not realising its full potential,” said Propertyology’s Head of Research, Simon Pressley.

Propertyology’s reasoning for making this decision to boycott all future investing in the state of Victoria is due to:

  • Ongoing actions and expressions of disdain from the state government towards investors,
  • A precession of poor policies targeted at property investors over recent years (itemised below). It is impossible to have any trust with what else might come from this government,
  • Poor financial management by the state government, culminating in a series of bad economic decisions and accruing an alarming level of state 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 fiinancial capacity to support the state’s economy for years to come, and
  • There are a plethora of locations in the other 7 states and territories for us to consider.

“Our decision has not been made lightly. Numerous decisions made by the Victorian government over several years have caused us concern. Placing a blanket boycott on 50 or more townships within the boundary of one state is something that I could never imagine ever contemplating before now,” said Propertyology Head of Research, Simon Pressley.

Mr Pressley said it is so sad to see a small but powerful group of reckless politicians cause so much damage to such a great state. “I am absolutely certain that numerous investors and business owners (big and small) will have lost faith in Victoria.”

“Their language, their policies and their actions… the underlying message that they continuously push is ‘rack off, this government does not want you… for as long as you remain on the scene we’ll continue to fleece your pockets.’ At least they are consistent, consistently poor,” said Mr Pressley.

Propertyology’s decision was made with the best interests of Australian property investors in mind.

But the biggest concern is for the residents of Victoria.

When comparing the state’s economy to the rest of Australia, Propertyology ranks Victoria’s economic outlook for the years ahead as the second worst in the country, behind only Northern Territory.

“The Victorian government has dug themselves into a very deep hole of debt which will take a decade or more to dig out of.”

“Their vicious attitude towards anyone with financial aspiration will significantly resrict 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 continuosly 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.”

Related article: History of Melbourne’s property market

“They leave us with no choice other than to focus 100 percent of our attention on the other 80 percent of Australia.”

With approximately 350 townships located beyond the Victorian border, it is impossible for us, with good conscience, to suggest to property investors that the credentials of Victorian locations are ahead of umpteen other locations in this huge country.

Over many years, Propertyology has invested in 6 different states, supplying rental accomodation for 23 individual cities/towns, making it Australia’s most experienced property investment firm.

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“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,” said Mr Pressley.

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.”

We’ve chosen to publicly announce our decision because we feel strongly that the 6.7 million residents of Victoria have a right 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.

Australia’s core needs (public versus private sector contribution)

  • Infrastructure (annual investment): $30 billion (30 percent) / $70 billion
  • Job volumes:94 million (13 percent) / 12.09 million
  • Housing supply: 300,000 (2.6 percent) / 11 million

Unflattering facts about Victoria


  • Australia’s highest state government debt:
    • $239 billion (2026 projection).
    • Several years of poor management has placed state government finances under enormous strain which it is likely to take a decade or more to rectify. The significant consequences of that poor management are now rearing its head.
  • The state’s spiralling debt mean that Victorian taxpayers are now strapped to a $12 billion annual interest bill.
  • The state’s ability to fund essential infrastructure, to support job creation initiatives, and to fund much-needed housing will be significantly curtailed for a decade or more. Early examples include the global embarrassment of abandoning a commitment to host the 2026 Commonwealth Games (creating a $600+ million bill as a legacy), scrapping the vitally important Melbourne Airport Rail Link project, along with kicking the can down the road for various other infrastructure projects.
    • A suite of new taxes (aka ‘disincentives for corporate and private investment) have also recently been introduced.
  • $1.3 billion East-West tunnel (government cancelled the project, triggering contract liability costs of $1 billion)
  • $5 billion West Gate tunnel (nearly $5 billion over budget and 8-years late)
  • $1 billion Melbourne Metro tunnel (original budget of $11 billion already exceeded, project is still under construction)
  • $1 billion cost blowouts on an assortment of other smaller projects for health and transport, collectively adding to the state’s bulging debt and Victorian taxpayers unsustainable interest bill
  • Australia’s second worst economic outlook (5 to 10-years):
    • behind only Northern Territory.
  • Below average employment:
    • 9 percent increase in the size of Melbourne’s workforce over 3YE July 2023 is well below the 8.9 percent national average.
  • CBD office occupancy concerns:
    • Melbourne’s CBD office vacancy rate in July 2023 was 15 percent.
    • In its latest report, Property Council of Australia expressed concern that Melbourne has Australia’s lowest pre-commitment rate, with only 17 percent of existing office tenancies currently committed for the next 3-years.
  • Population decline:
    • Victorian residents continue to relocate in droves.
    • The state produced a net population decline from internal migration over 3YE June 2022 of 108,000 (Melbourne = 74,600, regional VIC = 33,300).
    • With the current backdrop, it is very difficult to imagine any growth from internal migration any time soon.
  • Insufficient government contribution to rental supply:
    • the Victorian government has only contributed 7 percent of the supply of the state’s total rental pool.
    • Those who supply 93 percent of the rental pool have been increasingly discouraged for several years and now a groundswell of existing rental suppliers are bailing out of the market. As a result, the accelerated rate of tenants forced into makeshift accommodation and the rising price of rents across the state occurs because tenants are competing in a rental pool which is not deep enough.
    • For perspective, Melbourne’s rental market this time 10-years ago was ‘balanced’ with 11,800 properties advertised for rent and a 2.7 percent vacancy rate. Today, with a 740,000 bigger population, there are just 6,500 rental properties The only solution is to support rental suppliers.
  • Australia’s worst rental yields:
    • the state’s capital city and regional townships offer inferior rental income returns to every other state.
    • The removal of free-market conditions means a Victorian asset owner’s ability to maximise their income return on investment is the most restricted in Australia.
    • Given the abhorrent attitude of this state government towards investors, one can’t rule out the possibility of them introducing a blanket ‘freeze’ on rent prices across the state.
  • Australia’s highest land tax expense:
    • From 1 January 2024, almost every owner of Victorian investment real estate will be slugged with a new annual land tax of $975 per property (assuming a land value of $100,000 to $300,000)
    • Total annual state land tax increased from $3.5 billion in 2019FY to $4.2 billion in 2022 FY and is now likely to exceed $10 billion in 2025 FY.
  • Australia’s second highest stamp duty expense:
    • The state currently charges $48,000 to purchase a median value house. This is roughly double the fee to purchase a median value house in 6 of the other 7 capital cities.
    • Total annual state stamp duty tax increased from $6.2 billion in 2019FY to $10.7 billion in 2022 FY, meaning the state government charged real estate buyers $29 million per day.
  • Vacancy tax is blatant theft:
    • From mid-2024, vacant land and properties throughout Victoria which have been unoccupied for 6-months or more will be taxed at the rate of 1 percent of the property value.
  • Short-stay property tax is more theft:
    • Victorian property owners who supply short-stay accommodation for the incredibly important holiday and corporate market will soon lose 7.5 percent of their hard-earned income. In addition to this financial blow to property owners, the state economy will be damaged through the knock-on impact to the state’s tourism sector (AirBNB supports an estimated $2.5 billion VIC tourism spending and VIC 20,000 jobs).
  • City council rates:
    • Total annual city council rates / tax increased from $5.37 billion in 2019FY to $6 billion in 2022 FY.
  • Australia’s most onerous rental legislation: fundamental asset ownership controls, landlord compliance costs and rent price controls are major deterrents to suppliers of Victorian rental accommodation. Victorian rental legislation changes in recent times include:
  • removal of free-market conditions by placing a ban on rent bidding, rent increases capped to once per year, and a tenant can contest rent increases with VCAT. The provision of all other goods and services have no such impositions.
  • asset owners now must have a licensed professional carry out (separate) annual inspections of all gas appliances, electricity and smoke alarms, yet owner-occupied properties do not have this requirement. In addition to the extra cost of circa $550 for the annual inspections, there are reports regarding a lot of rogue inspectors concocting a laundry list of so-called ‘essential upgrades’, which can cost thousands of dollars.
  • when an asset owner decides to sell a rented property, they must provide their tenant with 7-days’ notice for each inspection / open-home and the tenant is eligible to receive $30 per inspection from the owner.
  • while the decision to sell a property does not give the asset owner an option to terminate an existing lease, the tenant may terminate by giving 14-days’ notice. This one-sided scenario can become very costly if the eventual sale / settlement takes several months to finalise and the asset owner is left without rental income.
  • if the tenant does terminate and move out and the owner subsequently takes the property off the market (eg. they can’t sell it for the price they are chasing), the asset owner is not permitted to re-advertise the property for rent for 6-months (who does that benefit?).
  • Victoria also stands alone with state legislation that does not afford the asset owner the fundamental right of refusing to offer a tenant a new lease at the end of the term (the only exceptions are if the owner is selling the property, moving into the property themselves, or conducting a major renovation). In essence, Victoria has fabricated their own definition of “rent/hire”: implying that possession equates to ‘tenant ownership’ without them having all of the associated costs.
  • it’s now near impossible for asset owners to refuse pets living in their property.

Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.

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