Investors with national property portfolios need to understand the recent housing policy released in Victoria.
State-based changes always have a fundamental impact on investors’ thinking. Most recently, we have seen concerns with Queensland policy proposals that its state government eventually stepped away from.
However, that reversal didn’t happen before many landlords started putting their Queensland properties on the market, detrimentally affecting the rental stock.
Victoria’s changes to housing have been called the “biggest changes in a generation”.
Here are the fundamentals of the Victorian policy:
- Its Housing Statement, called The Decade Ahead 2024-2034, promises to build 800,000 homes in the next decade.
- The State predicts its population will rise from 6.8 million to 10.3 million by 2051.
- A 7.5% levy will apply to revenue from platforms such as Airbnb and Stayz from January 1, 2025.
- Rent increases will be restricted when renewing fixed-term leases with a tenant. In other words, you can’t simply put up the rent because the lease is being renewed.
- Landlord notice periods have been extended to a minimum of 90 days.
- Rent bidding by tenants will be the subject of new rules.
- The planning system will be reformed to clear the backlog of planning permit requests. A “pathway” will be created to resolve issues when approval deadlines are missed, helping builders, buyers and renovators alike.
- New design standards for minimum living space, natural light, and energy efficiency will be implemented in high-density city areas.
- Height limits will be increased for developers.
- Supported by several housing associations and industry bodies, the Victorian government policy still has its detractors. Many claimed it needed to go further.
NOTE: The information in this article is general in nature and provided as a market overview only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.