Daniel Andrews’ last major announcement before resigning as Premier of Victoria was to release his government’s Housing Statement for the next decade. It is a plan that is designed to tackle Victoria’s housing supply crisis and it could have a significant impact on long-term property prices in Victoria.
Key features of the Housing Statement
The key features of the Housing Statement include:
- A projection that Victoria will overtake New South Wales as Australia’s largest State in terms of population by the end of the decade, and a forecast that Victoria’s population will grow to 10.3 million by 2051. Victoria’s population was 6.5 million at the 2021 Census.
- A forecast that 80,000 homes (including multi-residential complexes) will need to be built every year for the next decade to cope with Victoria’s population growth and ease the current supply problems.
- A government commitment to reform Victoria’s planning system and to clear the backlog of building permit approvals faster.
- A commitment to fast-track the building of 60,000 homes and associated infrastructure (such as the Suburban Rail Loop and the Metro Tunnel) in 10 designated activity centres across Melbourne: Broadmeadows, Camberwell Junction, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood.
- The provision of $5.3 billion for the Big Housing Build program to help build more than 12,000 social and affordable homes across Victoria, including 1,300 designated for regional Victoria.
- A government commitment to buy homes ‘off-the-plan’ to encourage developers to boost social housing stock.
- A government commitment to make it easier to obtain planning approvals to build a granny flat on your Victorian property.
- Government approval for the conversion of approximately 80 underused high-rise commercial office buildings in Melbourne to a forecast 10,000 to 12,000 multi-residential properties.
- The unlocking and rezoning of government land in established suburbs closer to where many people work to minimise urban sprawl and associated traffic congestion.
- Boosting the Victorian Homebuyer Fund to help up to 3,000 more Victorians each year to buy a home under a shared equity model with the State government.
- Introducing a Short Stay Levy of 7.5% on short stay accommodation revenue generated by listing properties on sites like Airbnb.
- The restriction of rent increases for successive fixed-term agreements so that if a landlord evicts a tenant at the end of their first fixed term, they must charge the same rental rate to their next tenant/s.
- An extension of the notice period required for rent increases and notices to vacateto 90 days (up from 60 days).
- A continuation of the ban on rental bidding, where it is illegal for landlords or real estate agents to encourage potential tenants to offer higher amounts than the advertised rent on a property in order to secure it.
What does it mean for Victorian property prices?
Property prices are always based on supply and demand. Currently, demand far exceeds supply in most Victorian property markets, which has resulted in dramatically rising prices over the past few years. This plan could help to ease that pressure, but it will take time to redress the current balance, particularly with Victoria’s strong long-term population growth trend.
What does it mean for Victorian landlords?
Victorian landlords need to pay close attention to the changes announced in the Housing Statement to ensure their ongoing compliance with Victoria’s rental property legislation.
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